The owners of a mining claim in New Mexico transferred their
interests to one of their number as trustee, who was to retransfer
to each one contributing his share of development expenses for a
year, a one-eighth interest. Plaintiff, one of the parties,
contributed his share and demanded a deed which the trustee refused
to give. Plaintiff made no further demand and did not contribute
any more to the expenses, but the trustee and some of the other
owners continued to develop the claim, and finally succeeded in
finding a valuable body of ore. Eight years after the former
demand, plaintiff commenced an action in equity to enforce the
original trust. There is a statute in New Mexico to the effect that
no action for the recovery of lands shall be commenced after a
lapse of ten years, etc.
Held:
That persons having claims to mining property in the course of
development are bound to the utmost diligence in enforcing them,
and in such cases the doctrine of laches is relentlessly
enforced.
That, while in actions at law, courts are bound by the
literalism of statutes, in equity, the question of unreasonable
delay within the statutory limitation is still open, and that, even
where a statute of limitations exists and has been made applicable
in general terms to suits in equity, defendant may avail of the
laches of complainant notwithstanding the time fixed by the statute
has not expired.
That the refusal by a trustee of a demand to execute a deed in
alleged pursuance of a trust agreement is a repudiation of the
trust, and opens the door to the defense of laches.
That a delay of eight years during which large sums of money
have been spent in developing a mining property is inexcusable
laches.
Appellants C. Ewing Patterson, a resident of New Jersey, and
Henry J. Patterson, a resident of New Mexico, on April 29,
Page 195 U. S. 310
1903, filed their bill of complaint in the district court for
Lincoln County, Territory of New Mexico, against John Y. Hewitt,
William Watson, Mathew Hoyle, and Harvey B. Fergusson, residents of
New Mexico, and the Old Abe Company, a corporation of the same
territory, to enforce a trust which is alleged to have existed
between the appellants and the defendant Hewitt, and by virtue of
which they sought to recover a one-fourth interest in two mining
locations, made in the name of John Y. Hewitt, on the second day of
May 1884. The bill prayed for an accounting of proceeds of ores
taken from the mines, and a lien on the property, for an
injunction, and the appointment of a receiver.
The facts in the case as found by the district court and adopted
by the supreme court are substantially as follows:
In 1881, the property in controversy was claimed by the
appellants and by Watson, one of the defendants, under locations
previously made by them. Between 1881 and 1883, appellants, in
conjunction with the defendant Watson, did a large amount of work
upon the claims, and were asserting their rights under the mining
laws of the United States. During this time, the same ground was
also claimed by other parties, among whom was the defendant Hewitt.
In August, 1883, a dispute arose in regard to this property between
appellants and the defendant Watson, on one side, and the other
parties, upon the other side.
The parties interested held a meeting in August or September,
1883, for the purpose of adjusting the differences then existing
between them, and to endeavor, if possible, to arrive at an
agreement whereby the interests of all would be protected. The two
appellants, the defendant Watson and the defendant Hewitt, with
several others who were interested, attended this meeting. The
result was an agreement between them that all the old locations
then existing, whether made by the appellants or any of the
defendants, or conflicting claimants, should be from that date
abandoned, surrendered, and given up by all of the parties, and
that the ground should be
Page 195 U. S. 311
put in possession of Hewitt, as trustee, to hold in his own name
for the benefit of all the parties then interested. It was also
agreed that Hewitt, as such trustee, should make a deed to such of
the said parties holding interests therein as should contribute
their part to the work, labor, and expenses necessary to obtain a
patent to the land; but there was no agreement as to what should
become of the interests of any one who failed to contribute his
share of the expenses. It was also agreed that each of the
appellants contributing his share of the expenses should receive a
one-eighth interest in the location, and that the said Watson and
Hewitt should each receive a one-eighth interest, part on account
of their services and part on account of their interests in the
ground, and that the remaining shares should go to other parties
who were interested therein.
In pursuance of this agreement, Hewitt took charge of the
property, and together with the defendant Watson and one of the
appellants Patterson, superintended and directed the work upon said
mine during the year 1883 and part of the year 1884. In order to
raise money for the working of the mine, it was agreed that a
one-sixth interest should be sold to H.B. Fergusson for $500.
During 1884 and 1885, a sufficient amount of work was done upon
the property to obtain a patent, and to discover mineral thereon.
The appellants contributed their share of the work, which enabled
the trustee to obtain a patent, and so far carried out their part
of the agreement as to entitle them to a deed from the trustee for
their one-eighth interest each, according to said agreement.
In April, 1885, the appellant Henry J. Patterson, in person and
by his agent, demanded a deed from Hewitt, trustee, of the
one-eighth interest to which he claimed to be entitled; but the
defendant Hewitt at that time refused to make the said deed, and
has ever since refused to execute the same, and has disputed his
right thereto.
No demand for a deed appears to have been made by C.
Page 195 U. S. 312
Ewing Patterson until just before the commencement of this suit,
when it was also refused.
In 1883, the complainant C. Ewing Patterson left New Mexico,
and, up to the time of the bringing of this suit, had never
returned there. The appellant Henry J. Patterson left in 1885, and
from that time until the fall of 1892 was a nonresident of New
Mexico.
From 1885 to 1890, the defendants performed a large amount of
work and expended a good deal of money on the mine in addition to
the annual assessment required by the government of the United
States thereon; but neither of the appellants ever contributed or
offered to contribute any part of the expenses of said work, or
perform any labor.
In November, 1890, the defendants discovered a large body of
rich ore in the mine, and since that date have taken out therefrom
gold amounting to several hundred thousand dollars. In 1892, a
corporation known as the Old Abe Mining Company was organized by
the defendants Hewitt, Fergusson, Watson, and others, and the
ground in controversy, known as the Old Abe ground, including the
interests claimed by the appellants, was turned over to the new
corporation by the trustee, Hewitt, and this corporation is now
holding title thereto.
The appellant Henry J. Patterson, through his agent, Henry
Burgess, had knowledge from April, 1885, that Hewitt had refused to
carry out said agreement, and execute the deed to him and his
co-complainant, and both of the appellants were again informed
after April, 1885, that Hewitt had refused to make the said deeds
or to carry out the trust agreement.
Upon this state of facts the district court dismissed the bill
upon the ground of laches. The supreme court of the territory
affirmed its action, 66 P. 553, and complainants appealed to this
Court.
Page 195 U. S. 317
MR. JUSTICE BROWN delivered the opinion of the Court.
The defense of laches, which prompted the dismissal of the bill
in this case, has so often been made the subject of discussion in
this Court that a citation of cases is quite unnecessary. Some
degree of diligence in bringing suit is required under all systems
of jurisprudence. In actions at law, the question of diligence is
determined by the words of the statute. If an action be brought the
day before the statutory time expires, it will be sustained; if the
day after, it will be defeated. In suits in equity, the question is
determined by the circumstances of each particular case. The
statute of limitations consorts with the rigid principles of the
common law, but is ill adapted to the flexible remedies of a court
of equity. The statute frequently works great practical injustice
-- the doctrine of laches, never. True, lapse of time is one of the
chief ingredients, but there are others of almost equal importance.
Change in the value of the property between the time the cause of
action arose and the time the bill was filed, complainant's
knowledge or ignorance of the facts constituting the cause of
action, as well as his diligence in availing himself of the
means
Page 195 U. S. 318
of knowledge within his control -- are all material to be
considered upon the question whether the suit was brought without
unreasonable delay.
1. In the case under consideration, the appellants claim the
benefit of § 2938 of the Compiled Laws of New Mexico, to the
following effect:
"No person or persons, nor their children or heirs, shall have,
sue, or maintain any action or suit, either in law or equity, for
any lands, tenements, or hereditaments, but within ten years next
after his, her, or their right to commence, have, or maintain such
suit shall have come, fallen, or accrued."
etc.
If this were an action of ejectment at law, there seems to be no
question but what it could be maintained, since it was brought
within ten years from the time the cause of action accrued; but
where the statute is in terms applicable to suits in equity, as
well as at law, it is ordinarily construed, in cases demanding
equitable relief, as fixing a time beyond which the suit will not,
under any circumstances, lie, but not as precluding the defense of
laches, provided there has been unreasonable delay within the time
limited by the statute. In an action at law, courts are bound by
the literalism of the statute; but, in equity, the question of
unreasonable delay within the statutory limitation is still open.
Alsop v. Riker, 155 U. S. 448,
155 U. S.
460.
If this were not so, it would seem to follow that in the code
states, where there is but one form of action applicable both to
proceedings of a legal and equitable nature, a statute of
limitations, general in its terms, would apply to suits of both
descriptions, and the doctrine of the laches become practically
obsolete. This, however, is far from being the case, as questions
of laches are as often arising and being discussed in the code
states as in the others. In a few cases where the statute of
limitations is made applicable in terms to suits in equity, it has
been construed as allowing a suit to be begun at any time within
the period limited by the statute, notwithstanding the intermediate
laches of the complainant, although in those
Page 195 U. S. 319
cases it will usually be found that the language of the statute
is explicit and imperative.
Hill v. Nash, 73 Miss. 849;
Washington v. Soria, 73 Miss. 665.
But the weight of authority is the other way, and we consider
the better rule to be that, even if the statute of limitations be
made applicable, in general terms to suits in equity, and not to
any particular defense, the defendant may avail himself of the
laches of the complainant, notwithstanding the time fixed by the
statute has not expired. This has been expressly held in
Alabama,
Scruggs v. Decatur Mineral & Land Co., 86 Ala.
173, in Missouri,
Bliss v. Prichard, 67 Mo. 181;
Kline
v. Vogel, 90 Mo. 239, and in New York,
Calhoun v.
Millard, 121 N.Y. 69. In the last case, the question is
discussed at considerable length by Chief Judge Andrews, and the
conclusion reached that
"the period of limitation of equitable actions fixed by the
statute is not, where a purely equitable remedy is invoked,
equivalent to a legislative direction that no period short of that
time shall be a bar to relief in any case, or precludes the court
from denying relief in accordance with equitable principles for
unreasonable delay, although the full period of ten years has not
elapsed since the cause of action accrued."
Indeed, in some cases, the diligence required is measured by
months, rather than by years.
Pollard v. Clayton, 1 Kay
& Johnson 462;
Attwood v. Small, 6 Clark & Finelly
356.
And in others a delay of two, three, or four years has been held
fatal.
Twin-Lick Oil Co. v. Marbury, 91 U. S.
587;
Hayward v. National Bank, 96 U. S.
611;
Holgate v. Eaton, 116 U. S.
33;
Hagerman v. Bates, 5 Colo.App. 391;
Graff v. Portland Co., 12 Colo.App. 106.
2. The facts in this case, so far as they concern the
applicability of the defense of laches, are that all prior
locations made by the claimants to this land were abandoned in
August, 1883, when an oral agreement was entered into that Hewitt
should be appointed trustee for all concerned; that, upon the
performance of certain conditions by the parties interested, he
Page 195 U. S. 320
should make a deed to each of such parties as should contribute
his part to the work and expense necessary to obtain a patent; that
each of the appellants contributed his share of the work in the
years 1883 and 1884 -- enough to entitle each of them to a deed of
his interest under the agreement; that April, 1885, Henry J.
Patterson demanded a deed of Hewitt, which was refused, but that C.
Ewing Patterson did not demand his deed until just before the
institution of this suit; that the defendants and their associates,
from the year 1885 to 1890, performed a large amount of work in
developing the mine, to which neither of the appellants contributed
any part; that in November, 1890, a large body of rich ore was
discovered, and since that time, gold to the amount of several
hundred thousand dollars has been taken out. Both of the appellants
left the Territory of New Mexico during the year 1885, and resided
abroad up to the time of the beginning of this suit. Both were
aware that Hewitt had refused to deed them their interest in the
mine and in the patent which he, in the meantime, had obtained to
the property.
It thus appears that the right of action accrued to the
appellants in April, 1885, and that this suit was not begun until
eight years thereafter -- in 1893. Whether the refusal of Hewitt to
make the deeds was right or wrong is not material here. There is no
doubt from the findings that appellants had no share in the
subsequent development of the mine or the discovery of ore in 1890,
and that it was through the efforts and perseverance of the
defendants, and the aid they received from Fergusson, that they
were put in possession of this valuable property. If appellants had
expected a share in this property they should either have brought a
bill promptly to enforce their rights, or at least contributed
their proportionate share to the subsequent work and labor, and the
expenses then incurred. To award them now a deed to their original
interest in the property would be grossly unjust to the defendants,
through whose exertions the value of the property was discovered
and the mine put upon a paying basis. While
Page 195 U. S. 321
it is true the court might impose upon the appellants the
payment of their proportionate share of labor and expenses as a
condition of relief, it could not compensate the defendants for the
risk assumed by them that their exertions would come to nought.
There is no class of property more subject to sudden and violent
fluctuations of value than mining lands. A location which today may
have no salable value may in a month become worth its millions.
Years may be spent in working such property, apparently to no
purpose, when suddenly a mass of rich ore may be discovered, from
which an immense fortune is realized. Under such circumstances,
persons having claims to such property are bound to the utmost
diligence in enforcing them, and there is no class of cases in
which the doctrine of laches has been more relentlessly
enforced.
3. But little need be said in reply to appellants' argument that
a trust relation was established between these parties by the oral
agreement of 1883, under which Hewitt was to take possession, hold
the property for the benefit of all concerned, and ultimately to
convey to each his proportionate share. In this connection, it is
sought to apply the familiar rule that neither laches nor the
statute of limitations is applicable against an express trust, so
long as that trust continues. Conceding all that can be claimed as
to the existence of an express parol trust in this case, the
refusal of Hewitt to execute the deed to H. J. Patterson of his
interest in the property, of which both appellants had notice, was
a distinct repudiation of such trust, which entitled the
complainants to immediate relief, and opened the door to the
defense of laches.
Speidel v. Henrici, 120 U.
S. 377,
120 U. S. 386;
Riddle v. Whitehill, 135 U. S. 621,
135 U. S.
634.
The supreme court of the territory also found that the case was
within § 2916 of the Compiled Laws of the territory, requiring
that all actions founded upon "unwritten contracts . . . or for
relief upon the ground of fraud, and all other actions not herein
otherwise provided for and specified," shall be brought within four
years, and that this defense was not
Page 195 U. S. 322
answered by § 2930, declaring that
"none of the provisions of this act shall run against causes of
action originating in or arising out of trusts, when the defendant
has fraudulently concealed the cause of action, or the existence
thereof, from the party entitled or having the right thereto."
As there was no evidence that the defendants had fraudulently
concealed the facts from the appellants, and abundant proof that
the facts were known to them, the latter section was held not to
apply. While the case does not necessarily involve it, we see no
reason to question the correctness of the court's conclusion on
this point.
We are clearly of the opinion that the delay of eight years in
this case was inexcusable, and the decree of the court below must
therefore be
Affirmed.
