Continental Divide Mining Investment Co. v. Bliley

Chief Justice Hayt delivered the opinion of the court. There are thirteen assignments of error in the record. Following the order of the argument of counsel, we shall first [164] consider the last assignment of error, to wit, that the amended complaint does not state facts sufficient to constitute a cause of action. The particular defect pointed out is the omission of an allegation to the effect that plaintiff offered to pay his one fiftieth part of the purchase price fixed by the bond for the transfer of the property to defendant. It appears to have been, at one time, necessary in a suit for an accounting between partners to state in the bill an offer on the part of the plaintiff to do equity, in the nature of an averment of his willingness to pay any balance that might be found due the defendant from him; but under our practice, a bill is not defective because such an averment is omitted. Craig v. Chandler, 6 Colo. 543. The first, second and third assignments of error are next argued by counsel. These assignments of error bring up for review the ruling of the district court in rejecting certain evidence offered for the purpose of showing that the new lease and bond were made with The Continental Divide Mining Investment Company upon an independent consideration. The offer embraced proof that the lessors had claimed a forfeiture of the prior lease and bond by reason of an alleged failure of the lessee and his assigns to comply with the terms and conditions of such instruments. The evidence shows that the plaintiff and defendant occupied the relation of mining partners to each other. They had together operated the lease, appellee contributing from time to time his proportion of the expense of the same. The principle which requires mining partners to exercise the utmost good faith in their dealings inter sese must be applied to the surrender of the old lease, and the execution of the new one. The old lease had not expired at the time the new lease was executed. In these circumstances, the law regards the new lease as a continuation of, or as “ grafted on,” the old lease; and we think the district court correctly decided that appellee’s interests continued under the new lease,/ Meagher v. Reed, 14 Colo. 335; 2 Pom. Eq. Juris., sec. 1050; [165] Clegg v. Fishwick, 1 McNaughton & Gordon, 298; Mitchell v. Reed, 61 N. Y. 129; 1 Bates on Partnerships, sec. 305. The defendant offered to prove at the trial that for a period of about three months the plaintiff failed to pay his proportion of the expenses of working the lease. This offer was made for the purpose of showing a forfeiture of his interests in the lease ; but we know of no principle of law that would visit such a result upon a copartner. It is not claimed that any proceedings were taken to have a forfeiture declared, and certainly the fact that plaintiff failed to pay for a period of ninety days his proportion of the expenses did not work a forfeiture of his interest in the copartnership. Meagher v. Reed, supra. The referee found that the expenses of operating the mine under the lease, with salary of officers, etc., balanced the receipts, leaving a new profit to the partnership of the shares of Bushwhacker stock as the net consideration for the sale to that company. One fiftieth part of this was found to belong to appellee. Objection is made to the nature of the evidence by which the value of the stock is shown, and also to the time fixed as the date of the conversion, this being the time to which the evidence of value is directed. There is some conflict in. the evidence as to the value of this stock, but it is not contended that we should review the evidence for the purpose of substituting the judgment of this court for that of the referee and of the district court upon the weight of such evidence. To establish the value of this stock, plaintiff introduced a number of stockbrokers, who were actively engaged in that business at the town of Aspen in the month of April, 1891, this place being the nearest business place to the mines. These stockbrokers were allowed to introduce their books, showing sales made by them during the month of April, 1891. With one firm the sales recorded were four in number, and with the other, twenty-one. These sales were made in the open market, at various times during the month, the price of the stock varying from 34 to 36 cents per share. This evi [166] denee was not only competent, but the best evidence of value that could be obtained. The sales were made in blocks of from 100 to 5,000 shares, in the ordinary course of business, and furnish competent evidence of the value of the stock. It was directed to the value of the stock in April, 1891, upon the theory that the conversion was made at that time. The following rules as to the measure of value of stock unlawfully converted have been announced from time to time in different jurisdictions: 1. The market value of the stock upon the day of the conversion, to wit, the time when the owner, being entitled to immediate possession of the stock, demands the same, and is refused. 2. In England and in some American states, the correct measure of damages has been declared to be the value of the stock at the time of the trial. 3. The rule in a few jurisdictions has been held to be the highest market value of the stock between the date of the conversion and the time of the trial. Each of these several rules finds support in the opinions of courts of last resort under varying circumstances; but the tendency of modern decisions has been in support of the rule fixing the measure of damages at the value of the stock at the time of the conversion, with legal interest added. Cook on the Law of Stock and Stockholders, sec. 581, et seq. Perhaps exceptions to the rule should be allowed in some cases, but in this instance the rule adopted is as favorable to the appellant as the law will warrant. It is not only supported by the weight of authority, but is founded upon sound reason. When a demand is made for stock, the party holding it is given notice of the claim, and he is presumably aware of the value of the stock at that time, and knows the extent of his liability in case his refusal to deliver the stock is unwarranted. In this case suit was commenced.and summons served in the month of April, 1891. There being no other demand for this stock, and'no unreasonable delay in [167] bringing suit, the commencement of the action was properly-taken as the time of the conversion. Finding no error in the record, the judgment of the district court will be affirmed. Affirmed.