Bacon v. Neill

283 F. 717, 1922 U.S. App. LEXIS 2275
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 2, 1922
DocketNo. 3773
StatusPublished

This text of 283 F. 717 (Bacon v. Neill) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bacon v. Neill, 283 F. 717, 1922 U.S. App. LEXIS 2275 (9th Cir. 1922).

Opinion

MORROW, Circuit Judge.

The appellant in this case, Maurice W. Bacon, was plaintiff in the court below in an action against the defendant, R. K. Neill, to recover on one-half interest in certain mining properties located in the mining district of Stewart, in British Columbia, and for an accounting.

Plaintiff alleges, in his amended complaint, that he is a mining engineer, engaged in promoting, financing, and- management of mining [718]*718properties in United States and Canada; that the defendant is, and has been, an expert' and skilled prospector and mining promoter in the same territory; that on or about the 1st day of November, 1915, at Spokane, Wash., plaintiff and defendant made an agreement whereby it was orally agreed that they would engage together, in the United States and the Dominion of Canada, in the business of prospecting for locating and discovering mining properties, which it was so agreed they should handle and own together, share and share alike, and by the terms of this agreement the defendant agreed to. investigate mining prospects and properties in United States and the Dominion of Canada, and report the result of his investigation in detail to the plaintiff. If there appeared merit in the properties, they were, hy said agreement, to be acquired by location or purchase, and. later financed, operated, controlled, or sold, as might appear to the mutual benefit of plaintiff and defendant, each in an undivided one-half part or share or interest therein, and the proceeds, if later operated or disposed of; that under this agreement defendant prospected and examined several properties from time to time; that in June, 1916, plaintiff learned from one Pat Daly, then in Spokane, of the mining district in British Columbia near Stewart; that plaintiff and defendant agreed that defendant should go, without delay, and investigate said district; that such investigation should be made for the benefit of plaintiff and defendant, and reported to the plaintiff, and, if favorable as to the prospect of mine, the control and ownership of such property or mine should be obtained for the mutual advantage of both; that the defendant desired money to be used in his investigation, and thereupon plaintiff advanced him $3,-000; that defendant went to said mining district and investigated the Daly property, and also another property, known as the Bush property; that defendant discovered that the Bush property was of great value, and could he purchased reasonably for a small sum of money; that, contrary to his duty to plaintiff, defendant concealed from plaintiff the true character and value of the property, and made untrue oral representations to plaintiff as to the character and value of said property ; that the ore in the mine was low grade and of little value; that it was so inaccessible as to make the mining thereof extremely expensive; that such statements were made to plaintiff for the purpose of misleading him; that plaintiff relied upon such statements, and believed that said property was of no value; that thereafter, during the existence of the agreement, the defendant secured an option, lease, and bond upon said property, and proceeded, with associates, in the development, management, and control of said property, and he, with others, secured said property for their benefit; plaintiff is informed and believes that said property is of the value of $10,000,000, and that the defendant has obtained at least one-quarter of the same; that at no time has defendant advised plaintiff of his transactions whereby he has secured title to said property, or the purchase and development of the same; that plaintiff was in total ignorance of all of said facts until the 1st of October, 1919, when he learned thereof through the public press; that plaintiff has,at all times been ready and willing to furnish, defendant with the necessary funds to carry on the said joint enter[719]*719prise; that defendant has failed to report or account for the funds furnished, as stated in the complaint; on the contrary, he has proceeded secretly, fraudulently, and unlawfully with the expenditure of the moneys so furnished on his own account, and not upon the mutual account of plaintiff and defendant. Plaintiff demands an accounting from the defendant for a full one-half interest in said property and conveyance of same to the plaintiff, and such other and further relief as may be deemed just and equitable.

The defendant, in his amended answer, denies the general terms of the agreement as alleged in plaintiff’s complaint, but admits that both plaintiff and defendant learned of the Daly property, in the mining district of Stewart, in British Columbia, and that there was ah oral agreement that defendant should visit that property and investigate its merits, and, if defendant reported favorably, the property should be acquired for the benefit of plaintiff and defendant upon the terms alleged in the complaint. Defendant admits that he visited the Daly property in British Columbia, and that he made an examination of that property, and also another property contiguous thereto; that he discovered and believed that the said last-named property was a valuable prospect, and well worth acquiring with a view of developing, and that the same could probably be acquired for a reasonable sum of money, and he so reported to the plaintiff. Although he had not examined the said property under any contract between himself and plaintiff, and was under no obligation or duty to plaintiff with reference thereto, defendant admits that he advised the plaintiff that he considered the property a valuable one and well worth acquiring, and asked the plaintiff to join him in acquiring same on the terms agreed on with reference to the Daly property; that plaintiff then and there declined and refused to join the defendant in acquiring the said property, alleging that the climatic conditions were unfavorable to mining, that the grade of the ore as disclosed by assays of the samples was too low, and that the camp was an abandoned camp, and had been turned down by all reputable and competent mining engineers who had examined same; that plaintiff persisted in his refusal to* join the defendant in acquiring the other property, although repeatedly urged by defendant to do so. Plaintiff did not rely alone on the information furnished by the defendant, but had in his possession the report of an agent of his own, Mr. R. R. Ronnsavell, concerning said property, who had accompanied the defendant on his visit, and who participated in the examination of the property, which report was in substantial accord with that made by the defendant; that, upon refusal of the plaintiff to join him in the acquisition of said property, defendant, who was a man of small means, and unable, by reason thereof, to purchase said property on his own individual account, reluctantly gave up the project of acquiring said property with the plaintiff for the joint benefit of both of them, and it was not until nine months thereafter, and until defendant had been able to interest other people in said property, that the defendant took a contract from the owners of the property for the purchase of the same for the consideration of $100,000, the interest of the defendant therein being one-quarter interest, while the other parties that defendant had [720]*720been able to interest in the deal reserved to themselves a three-quarters interest.

Defendant admits that at a later period, to wit, in the month of March, 1917, defendant received an option, lease, and bond upon the said property.

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Related

Johnston v. Standard Mining Co.
148 U.S. 360 (Supreme Court, 1893)

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Bluebook (online)
283 F. 717, 1922 U.S. App. LEXIS 2275, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bacon-v-neill-ca9-1922.