Hagerman v. Bates

Mr. Justice Campbell delivered the opinion of the court. From the foregoing statement it will at once be seen that the main issue in the case (the nature and scope of the contract of settlement) was determined neither by the district court nor by the court of appeals, and this is one of the grievances which the plaintiffs urge here. The general rule undoubtedly is, as appellees assert, that the reasons given by a court for its decision are not material, so long as its conclusion is right. As otherwise expressed, very poor reasons are sometimes given for a correct decision. But where the facts upon which the decision is based are insufficient to support the conclusion, then not faulty reasoning but the unwarrantable effect given to the facts, constitutes the prejudice. After a most diligent examination of the entire record in tins case, including all the evidence, we are satisfied that the judgment against the plaintiffs ought not to stand, and that the grounds given by both courts are not tenable. The learned judge of the district court held that the employment of Moody by the owners of the Bonnybel as their attorney in the ejectment action did not, as an incident, carry with it the power to compromise the suit or to agree to a conveyance of real estate. Upon this as a legal proposition the authorities are conflicting, and possibly the ruling is right. However that may be, we do not find it necessary to express our views upon it. Previous to the making of the contract which is the subject of the controversy here, Daniel was living in the state of Texas. He knew that an application for a patent had been made by his colocators in their own and in his behalf, was conversant with the different steps in relation thereto, and cognizant of the obstacles thrown in their way by the owners of the Little Giant claim. The three locators were desirous of securing a patent at the earliest date possible, and, as is manifest from the correspondence passing between them, thought that it might be facilitated by applying for a patent during the inclement season of the year when the — 77 — deep snows and the stormy weather would probably render opposition less effective. Daniel had written to Moore, and the correspondence is in the record, and had authorized him, as his co-owner, to act for him in securing the patent, to employ counsel to represent them in actions that might be brought, and, to quote the exact language, wrote: “ I request you to attend to my interests jointly with your own to protect the property and I will pay my part of the cost.” Moore unquestionably construed this as giving him full authority, so acted, and, among other things, employed Moody as attorney for him and Daniel, while Bracken had separate counsel for himself. Moody and Moore were both present at Aspen, and participated in the negotiations that led up to the settlement, whatever it was. Bracken was present in person, while Daniel was absent. In the negotiations the owners of the Little Giant certainly supposed that Moore was representing not only himself but Daniel also; and it is not reasonable to suppose that the owners of the Little Giant would make any agreement of compromise and dismiss the suits unless they supposed, and Moore had so represented, that he had authority to act for Daniel and that Moody, as their attorney, acted for them both. After the settlement was made and the actions dismissed on July 28, 1882, Moore wrote from Leadville to Daniel in Texas in the following August, stating that the differences between the owners of the two claims were adjusted, that the various actions were dismissed, and all obstacles to the securing of a patent removed, and asking Daniel to remit his share of the costs and expenses incurred in the litigation. He stated that, as one result of the compromise, the owners of the Bonnybel after receiving a patent were required to convey for surface purposes only to the owners of the Little Giant a certain described parcel of the conflicting ground. In the letter Moore also stated that he had signed the agreement of settlement for Daniel, as well as for himself. In reply to this letter Daniel objected to the item of costs, but did not refer to the settlement, either by way of objec — 78 — tion or approval, though advised by Moore that an agreement in his behalf had been made whereby an easement in the property was to be conveyed after the patent was issued. Nowwe think that the facts just mentioned, especially when taken in connection with the circumstances of this case which our examination of the record has revealed, are sufficient, unexplained and uncontroverted by Daniel, to constitute Moore his agent with power to make the contract, if any such was made, which plaintiffs set up in their complaint. It is true Moore denies that such power was conferred, and while .at first denying any previous authority from Daniel to represent him, when confronted with this correspondence he admitted the receipt of Daniel’s letters, and writing to him, as above set forth, and these admissions overcome his naked denial. There is not a word in Daniel’s letters questioning such authority. His testimony is not in the record; and when his son George M. Daniel—who throughout this litigation in our judgment is to be considered the same as J. M. Daniel, his father, and who seems to have had an equitable interest in the original location of the Bonnybel, and to whom the father transferred his entire record title before this action was begun—filed his answer, there was no plea or averment therein of the lack of authority in Moore to make the contract, but only that no such contract as alleged was, in fact, made. But if we should be mistaken in our conclusion as to Moore having originally been given such authority, we are of opinion that Daniel ratified the agreement, or at least subsequently recognized that Moore had authority to make such an agreement as is declared upon. But, say appellees, and so said the trial court, Daniel could not ratify a contract of which he never heard until this action was instituted, and there is no evidence that previously he ever knew of plaintiffs’ claim. It is true that in his letter of August, 1882, Moore informed Daniel that the contract contemplated a conveyance for surface purposes only. He was advised that a contract had been made in his behalf that called for a con — 79 — veyance of an easement. By Ms silence and. acquiescence, he acknowledged that authority existed therefor. In accepting the fruits wMch the contract of settlement gave, which secured the dismissal of two actions, and enabled the owners to get a patent for the Bonnybel without further opposition from their antagonists, it would be Mequitable to permit Daniel to retaM its benefits and repudiate its burdens in whole or in part. So long as he retains the advantages, he should be held, also, to those provisions of the contract favorable to his opponents which secured for him the correspondmg benefits. The other alternative would be for him to restore, or offer to restore, the status quo, and put the owners of the Little Giant with respect to the litigation in the same position they were hi before the settlement was made. But, as the record discloses, this cannot now be done, and no such offer has been made, and it is in accordance with good conscience to hold Daniel to the contract as made. There is still another reason for so holding. Unquestionably, Daniel clothed Moore with apparent authority to represent him m this litigation, and M this settlement. Previous to the application for a patent, and M the doing of assessment work, and in the various steps preliminary to making application for a patent of' the Bonnybel, Moore seems to have acted for Daniel with the latter’s full authority and acquiescence, and to the knowledge of the owners of the Little Giant. When, therefore, Moore was acting within the scope of his apparent authority as Daniel’s agent, and made a contract for his prmcipal, relymg upon which others gave up valuable rights, and Moore thereafter misinformed Daniel as to the true nature of the contract, Daniel, rather than Mnocent tlrird parties, should suffer. Epecially is this principle applicable in this case, where Daniel retains the fruits of the contract, and when suit is brought, and he is directly acquainted with plaintiffs’ claim, makes no offer to restore them to the condition they were in before the contract was made. Mechem on Agency, §§ 153 et seq. 298, 311; Story on Agency, chap. 6. — 80 — Coming now to the decision of - the court of appeals, we find it predicated upon the plaintiffs’ laches in the prosecution of the suit. As a matter of law and practice, we think the court was right in holding that laches may consist not only in negligently instituting a suit, but also in negligently prosecuting it after it has been begun. The authorities referred to by the court of appeals sustaining this proposition are: Sullivan v. Portland & Kennebec R. Co., 94 U. S. 806; Johnston v. Standard Mining Co., 148 U. S. 360. It seems to be in accordance with the better practice, also, that laches need not be specially pleaded as a defense, but may be raised by counsel at the trial, or taken cognizance of by the court of its own motion at any stage. In tins case no defense of the kind was pleaded, and it seems not to have been suggested or considered as in issue by the trial court or by counsel until after the case reached the court of appeals, and then for the first time in the brief of counsel for defendants. When the defendants were putting in their testimony, an objection to a question was interposed by counsel for plaintiffs upon the ground, inter alia, that the particular testimony sought to be elicited was not proper because it related to the question of laches. The learned district judge remarked that no question of that kind was in the case, whereupon one of the counsel for defendants replied that no question of that kind arises. While, as we have stated, the defense of laches need not be specially pleaded by the defendant, still, when not pleaded, unless it clearly and satisfactorily appears to the court from the evidence that there has been an unreasonable delay in prosecuting the suit, the court of its own motion should aerot rest its decision upon that ground. -Applying this, principle to the case at bar, especially in the light of what occurred upon the trial in the district court concerning laches to which we have just referred, we think that defense was not satisfactorily made out. We must not be understood as intimating that counsel for defendants purposely misled the plaintiffs; but what we do say is that the statement madp in the trial — 81 — court was calculated to mislead, and probably, in accordance with tbe contention of plaintiffs’ counsel, did mislead, them into supposing that no such defense was to be relied upon. While this declaration of defendants’ counsel might not preclude the court from resting its decision upon the ground of laches, still it would naturally be interpreted by plaintiffs as relieving them of the necessity of introducing evidence to explain any apparent laches; and the decisions are to the effect that this may be explained, and certainly the party against whom any such defense is suggested ought to have full and ample opportunity to make the necessary explanation. In the opinion of the court of appeals is found a marshaling of the facts as plausible, and an argument as strong, to sustain this defense as can possibly be presented. _ There are certain other facts, however, apparent in this record which, though they may not have been overlooked by the learned court, were probably not deemed of sufficient consequence to merit notice; but which, to our minds, place plaintiffs’ conduct of the suit in a light quite different from that in which the opinion views it. Laches is not dependant upon the statute of limitations. Mere lapse of time and staleness of the claim are material questions that enter into the definition of the term, but of themselves are not conclusive. This suit was begun in 1884, and notice of Us pendens duly filed in the recorder’s office. Not much progress was made therein until 1889. It should be said, as appears from the testimony of plaintiffs’ witnesses, that the so-called Bell contract, if made, has either been lost or mislaid. Taylor, the attorney, states that the day after it was executed he took it into court, and after dismissing the action left it with the clerk to be filed in the records of the case; and, so far as the testimony in this case is concerned, the contract has not from that time been seen by any witness who has testified. During the early history of the case it seems that both parties made more or less diligent efforts to ascertain the — 82 — whereabouts of this contract, and whether or not it was made. A number of states of the Union were visited by representatives of these parties with a view to securing testimony in the case, and more or less ample preparations were made for the trial. Various intermediate questions were disposed of, continuances had from term to term, some by agreement of the parties, and apparently no continuances were granted against the opposition of’ either side, and all evidently by mutual consent. While it may be true that negligence of the defendants does not excuse lack of diligence upon the part of plaintiffs, yet it is a circumstance proper to be taken into consideration that in this ease the defendants themselves took no active steps to bring the case to trial. They were in default in the filing of their answers,—at least would have been without an extension of time secured from the plaintiffs, or by order of the court. The present plaintiffs bought into the Little Giant in 1885, the present defendants into the Bonnybel in 1887, charged with notice of plaintiffs’ equities. Defendants’ purchase was made after it was ascertained that the property in conflict was of value. That fact was ascertained and ore discovered not by expenditures of the defendants upon the Bonnybel claim, but by certain development work done upon other property under order of the court in litigation pending between what is known as the “ apex and side line ” interests in the somewhat famous litigation of that character in this state before and during the pendency of tins action. Hagerman, one of the plaintiffs herein, acted with the defendants, and others of the side line parties to that litigation, and his money, in proportion to the interest he had, was employed in the development work which led to the discovery of the value of the Bonnybel property. The defendant Moore in August, 1889 was dismissed from this action, and, so far as appears, the plaintiffs, in entire good faith, appealed from that order of dismissal to the court of appeals, where at the April, 1892, term of the court — 83 — the appeal was dismissed upon, the ground that the order was not in the nature of a final judgment: 2 Colo. App. 83. This accounts for more than two years of delay. After that appeal was dismissed, there seems to have been no lack of diligence shown by the plaintiffs in prosecuting the suit. A part of-the delay is to be accounted for, also, in the fact that the plaintiffs at one time sent their attorney to Aspen who conferred with one of the attorneys for the defendants, and after such conference reported to his clients his opinion as to their inability to prove the contract relied upon, and one of the plaintiffs then Avrote to the defendants’ attorney that he had concluded to take no further steps in the litigation. Afterwards, however, the plaintiffs, as they state, becoming satisfied that their attorney had been deceived, determined, and so informed the defendants, that thereafter they would push the case, and this was done. There are other facts and circumstances apparent in the record which might be noted tending to explain the apparent laches of the plaintiffs, but we do not think it necessary further to notice them. If the contract, as plaintiffs set it up, was made, it was the duty of the defendants to make conveyance after the patent was issued. While it is true that the patent was issued four days after the settlement, it was delivered to Moore by the register of the land office some time in September, 1882, and was not put upon the records of Pitkin county by Moore until April, 1884, and the plaintiffs’ testimony is to the effect (and there is no proof to the contrary) that information of the issuance of the patent was not acquired by the owners of the Little Giant until a very short time before this suit was begun in August, 1884. There was no negligence, therefore, in instituting this action, for it would be inequitable to impute to plaintiffs negligence in not sooner learning of the issuance of patent when defendants themselves for nearly two years withheld the same from the record, the recording being the usual — 84 — means of imparting notice of title. Considering the facts to which we have adverted as tending to explain the alleged lack of diligence in prosecuting the suit after it was begun, and considering what was the natural effect of the statement of defendants’ counsel that laches was not considered in the case which obviated the necessity for introducing testimony explaining any negligence of this character that might be imputed to them, we are satisfied that the decision should not be placed upon that ground. If as matter of fact, the contract as set up by plaintiffs was made, they are entitled to recover, and their equities should not be defeated, either upon the ground of alleged lack of authority from Daniel, or that plaintiffs themselves have been guilty of laches in prosecuting the suit. In other words, there should be a decision of this case upon its merits, which, up to the present time, has not been had, and the- plaintiffs have a right to a determination as to the main issue in the case. Upon this record we are clearly of the opinion that Moore had authority to bind Daniel by a contract such as is set up by plaintiffs, and are further of the opinion that plaintiffs are not chargeable with laches in beginning or prosecuting the action. The testimony upon the only other issue left to be determined is so irreconcilable, and in the nature of things must necessarily so largely depend upon the credibility to be given to the witnesses who give oral testimony, that we do not feel called upon to determine it from the record before us. It is peculiarly a case where such a decision should be made by a judge, or jury, who sees the witnesses as they testify, and observes their manner and appearance upon the witness .stand. The rulings of the trial court upon Moore’s application for a dismissal of the action as to him, were somewhat unstable. At the first, it was denied, and finally granted. After he sold his interest in the Bonnybel claim, his grantees in some way, and for some reason not disclosed by the record, were made parties defendants, whether because of the conveyance of Moore, and as substituted for him, it is impossi — 85 — ble to determine, for tíre same persons were grantees also of Bracken and Daniel. A review of this ruling is not pressed upon us, and possibly no exception was taken to it. If it should be considered that Moore’s grantees had been substituted for him, possibly the question is no longer material. We mention it now merely to suggest that, in case of another trial, if the parties so desire and it is considered important, they may get a ruling of the trial court to determine whether the present defendants are in court as purchasers of, and as substitutes in the suit for, Moore, Bracken and Daniel, or only one or more of them. The judgment of the court of appeals is therefore reversed, and the cause remanded with instructions to direct the district court, if any further steps are taken in the action, to proceed in accordance with the views expressed in this opinion and to grant a new trial upon the following issue of fact only: What was the contract of settlement made between the owners of these two claims, or their agents and representatives, when the action in the district court of Pitkin county was dismissed ? Reversed.