Guthiel v. Gilmer

76 P. 628, 27 Utah 496, 1904 Utah LEXIS 42

• Court: Utah Supreme Court
• Decided: April 22, 1904
• Docket: No. 1496
• Status: Published

Opinion

McCARTY, J.,

after stating the facts, delivered the opinion of the court.

1 The first question presented by this appeal is that of res adjudicaba. Appellant contends that this action can not be maintained for the reason that the questions involved have been litigated and adjudicated in a former action. The judgment relied upon as an es-toppel in this case was a judgment of nonsuit, and not as contended by appellant, a judgment on the merits. Section 3181 of the Revised Statutes of 1898 provides, so far as material here, as follows: “An action may be dismissed, or a judgment of nonsuit entered in the following cases: . . . (5) By the court upon- motion of the defendant, when upon the trial the plaintiff fails to prove a sufficient case for the jury.” Section 3182, Rev. St. 1898, provides as follows: “In every case, other than those mentioned in the last section, judgment must be rendered on the merits.” Section 3189, Rev. St. 1898, provides as follows: “A final judgment dismissing the complaint, either before or after trial, does not prevent a new action for the same cause of action, unless.it expressly declares,- or it appears by the judgment roll, that it is rendered upon the merits'. ’ ’ It will be observed that section 3182, Rev. St. 1898, in effect, provides that a judgment of nonsuit entered on motion of defendant when “the plaintiff fails to prove a sufficient case for the jury” is not- a judgment on the merits. The rule thus declared by our statutes is in harmony with the overwhelming weight of authority.’ 1 Freeman on Judgments, section 261. Mr. Black, in his work on Judgments (2 Ed.), section 699, says: “It is a settled and inflexible rule that a judgment of nonsuit is not a judgment upon the merits, and therefore is no bar to another suit upon the same cause of action.” And again, in section 703, he says: “ A judgment of disr missal may also he asked for on the trial at the conclusion of the plaintiff’s evidence in chief. And the granting of such a motion can have no greater effect upon the cause of action than an involuntary nonsuit entered at the same stage. Hence the cases hold that the dismissal by the court of an action at law, while the same is on trial, and before its final submission, upon the ground that plaintiff has failed to establish his cause of action; is not a final determination on the merits, and therefore not pleadable against another action for the same cause.” In A. & E. Ency. Law (2 Ed.), 801, this same rule is stated as follows: “It is well settled in the United States that a judgment of nonsuit, or in the nature of a nonsuit, is not an adjudication upon the merits, but leaves the parties in the same condition, so far as the cause of action is concerned, as though no action had ever been instituted, and hence can npt constitute res adjudicata.” The doctrine thus announced in the text is supported by a long list of authorities cited in the footnote, which we deem it unnecessary to reproduce here. In the case of Couch v. Welsh, 24 Utah 36, 66 Pac. 600, this court held that an instruction at the close of the plaintiff’s testimony directing a verdict for the defendant on the ground of failure of proof is in effect a nonsuit. McCay v. Ry. Co. (Mont.), 31 Pac. 999. Mr. Spelling, in his work on New Trial & App. Proc., section 352, vol. 1, says: “Whether plaintiff takes voluntary nonsuit, or be nonsuited on motion of defendant, the judgment should be of nonsuit and dismissal, and. not on the merits.” When plaintiff at the former trial concluded and rested her case, two courses were open, cither of which defendant could have pursued if he was confident of his position that plaintiff had failed to prove a sufficient ease for the jury. One was a submission of the case on the merits for final determination, and thereby obtain a judgment that would be a bar to another action for the same cause; and the other was by motion for judgment of nonsuit, which, if granted, would leave the parties in the same situation in relation to the matter in controversy as they were before the action was commenced. The defendant having pursued the latter course, and having-obtained a judgment of nonsuit, nothing was concluded against the plaintiff, except to stop the further progress of that particular action, and the way was left open for plaintiff to commence another suit for the same cause. Wood v. Ra-mond, 42 Cal. 643. In the case of Gummer v. Trustees, etc., 50 Wis. 247, 6 N. W. 885, it is said that a defendant “ should not he allowed to experiment with a motion for a nonsuit, and obtain the opinion of the court of the plaintiff’s case, and, if he fails in his motion, then go to a full trial on the merits without also allowing the plaintiff, if he is the losing party on the hearing of the motion, to sue over. If the defendant is not bound and concluded by the decision of the motion, the plaintiff should not be; and, if the rule is adopted that a nonsuit granted upon the motion of the defendant is bar to another action, then the correlative rule should be adopted that a decision against the motion operates as a judgment for the plaintiff.” The rule that a judgment- or nonsuit is not a judgment on the merits is so well settled that a further discussion or citation of authorities would seem unnecessary.

3

The next contention of appellant is that the action is barred by the statute of limitations. The cause of action accrued April 20, 1894, the date on which the defendant, O. J. Salisbury, conveyed his interest in the Peabody mine to the' Stewart Mining Com-, pany. The statutes of this State (then Territory) in force at that time provided that an action founded upon an instrument in writing could be commenced any time within four years from the time the cause of action accrued. Section 3143, 2 Comp. Laws Utah 1888. Before the limitation period fixed by said section 3143 had expired on the contract under consideration, the Legislature, by an act, approved March 20, 1897, extended the limitation period on actions of this character to six years, which gave plaintiff until April 20, 1900, in which to commence her action. Section 2484, Rev. St. 1898. This action was commenced originally October 13, 1899, which was within the limitation period. A judgment of nonsuit was rendered against plaintiff July 17, 1900, which judgment was affirmed by this court, January 3, 1901. Plaintiff, under section 2893, Rev. St. 1898, had one year from the time the judgment was affirmed in which to commence a new action on the same cause of action. The record shows that this action was commenced February 9,1901, which was within, a month and seven days after the former case was disposed of by this court. It will therefore be seen that the statute of limitation can not be invoked as a defense in this case.

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The next contention of appellant is that the evidence is insufficient to support the verdict, in this: that, there is no testimony whatever showing or tending to show that J. T. Gilmer had authority, either express or. implied, to bind the firm of Gilmer, Salisbury & Co., or the defendant O. J. Salisbury, individually, in signing the contract set out in the complaint, or that the Pea-, body mine ever became a partnership asset. This action is brought against the individual members of the firm of Gilmer, Salisbury & Co., and not as sug-. gested by counsel for appellant in their brief, against the partnership in its firm name. In the caption of the complaint the defendants are named and described as. .J. T. Gilmer, Monroe Salisbury, and O. J. Salisbury, copartners, doing business under the firm name and style of Gilmer, Salisbury & Co., and it is alleged in the body of tbe complaint that defendants at all times therein mentioned were copartners. It was not only necessary to allege this, but it was incumbent upon plaintiff to prove a partnership, in order to show authority in Monroe Salisbury and J. T. Gilmer to bind O. J. Salisbury in the transactions under consideration. However, the action is brought against the defendants as individuals, and not as a partnership. 15 Ency. Pl. & Pr., 850. Davidson v. Knox (Cal.), 7 Pac. 413; Feder v. Epstein (Cal.), 10 Pac. 785; Parsons on Partnership, sections 249, 250. Therefore, if the evidence shows that the defendants were partners, and that the agreement under consideration-was entered into for and on behalf of the partnership, and O. J. Salisbury afterwards ratified and adopted what had been done in the premises, he would be bound thereby, even though the transaction was entirely outside of the scope of the business of the partnership, and Gilmer, in the first instance, had no authority to bind the firm by signing the contract. Parsons on Partnership, section 148; 22 A. & E. Ency. Law, 136; Guthiel v. Gilmer et al., 23 Utah 84, 63 Pac. 817; Dudley v. Littlefield, 21 Me. 418. And it is not imperative that such ratification be established by direct proof, but it may be inferred from the general course of dealing between the members of the firm in relation to. buying ’and developing of mining properties prior to and since the mating of the contract referred to, and also from subsequent transactions in relation to the handling and disposition of this particular piece of property, to which defendant O. J. Salisbury was a party. 1 Bates on Partnership, sections 363, 366; Wheeler v. Rice, 8 Cush. (Mass.) 205; Wilcox v. Dodge, 12 Ill. App. 517. The record in this case shows that the members of the firm of Gilmer, Salisbury & Co. dealt extensively in mines in this and adjoining States, and nearly all deals of this character were made on the credit of the partnership, and in many of them the three partners had a joint and equal interest in the properties purchased. On this point O. J. Salisbury testified, in part, as follows: “In 1878 and' 1879 I was not giving nracb personal attention to mining enterprises at Bingham. Mr. Gilmer was giving the Bingham properties attention, and daring those years I was giving attention to mining enterprises at Deadwood. About that time I was buying mining properties in the vicinity of Deadwood for myself, Mr. Gilmer, and Monroe Salisbury, and was paying for the properties by drafts on Gilmer, Salisbury & Co. . . . The drafts which I have testified to, that were drawn by me to pay for interests in mines which were acquired by me in the Dakotas — Deadwood—were drawn upon the firm at Salt Lake City; and drafts for like purposes were drawn by me upon J. B. Haggin, San Francisco, to pay for interests thus acquired by myself and J. T. Gilmer and Monroe Salisbury. ’ ’ And again referring to their properties in the Dakotas, he says: “I knew quite a number of these claims stood in my name, and whether they stood in my brother’s or Mr. Gilmer’s name I don’t know. If they stood in my brother’s name, I had an interest in them, and those that stood in my name, my brother and Mr. Gilmer had an interest in, and, so far as we three were concerned at that time, it was an equal interest. We held the property for all parties interested, of course. So far as the rights of myself, my brother, and Mr. Gilmer were concerned, we each had an equal share in it. They were purchased and paid for with a common' fund. It was the common indebtedness of all three.” And further he says: “The members of the firm drew upon Gilmer, Salisbury & Co., as a concern, for a great many other things besides matters pertaining to staging or a purchase of individual interests in mines — for our living expenses, and for any ventures that, as individuals, we might have gone into — with the condition that the financial condition of the company would justify it. We never' did malee any division of the profits otherwise than in that way.” It thus appears that, while O. J. Salisbury was looking after the. ¿lining interests in the Dakotas; J. T. Gilmer was oper-, ating and dealing in mines in Bingham mining district, this State. Defendant O. J. Salisbury testified that ■ j* there was no difference in the matter of any authority to buy any mines either in Bingham or at Deadwood”. (Dakota). He testified that he “didn’t have any individual interest in any mines at Bingham through the-copartnership or otherwise.- No interest other than my stock in the Stewart Mining Company.” When the' Stewart Mining Company was incorporated, the Stewart-mine and mill, in which the three members of the' partnership owned a large interest, together with the Constitution mine, all of which they owned, were ac-: cepted as full payment of the capital stock of the corporation. J. T. Gilmer, without any special authority, so far as shown by the record, transacted the business connected with the promotion of this enterprise for Mon-, roe and O. J. Salisbury. He signed their names to the articles of incorporation, and- later on entered into the agreement under consideration for the .Peabody mine, which had previously been deeded to Monroe Salisbury by Williams, who was one of the parties to the agreement under consideration. During their mining oper--ations in Bingham, both before and after the making of the contract in question, J. T. Gilmer and Monroe Salisbury purchased about 20 mining claims, and in each case Gilmer and the two Salisburys were named as. grantees in the deeds of conveyance received for the-property purchased. Most of these deals were made by Gilmer, and without any special authority j so far as shown by the record, from his associates, Monroe and O; J. Salisbury. The mines so purchased were after-, wards conveyed, for a nominal consideration, to the Stewart Mining Company; O. J.. Salisbury joining in the different conveyances as one of the grantors. These-transactions to which O.. J- Salisbury was a party not. only tend.to show that he ratified all that Gilmer did in making the numerous deals for mining properties referred to, including the . deal for the Peabody; mine, but when considered in connection with the fact that it is admitted that the transactions referred to were practically all made on the credit of the partnership, and that an overdraft of more than $190,000, that had been incurred in a mining enterprise, was paid' by the three members of the partnership, because it was extended on the credit of the firm, is strong proof that dimer had authority, in the first instance, to bind the members of the firm by these transactions. Even though it be conceded that Gilmer had no authority to act for and in the name of the firm, or the members thereof, in making the deal for the Peabody mine, and defendant O. J. Salisbury desired to escape the responsibilities of the transaction, it was incumbent upon him, under the circumstances, to repudiate the deal when notice was brought home to him of what had been done; but instead of doing this, he joins as a lessor in a lease of the property to the Bingham Mining Company, and later on he joins with Monroe Salisbury and Mary E. Gilmer, widow of J. T. Gilmer, in a conveyance of the same property to the Stewart Mining Company, a company in which he and his associates held 43,000 of the 60,000 shares of the capital stock of the corporation. He also joined in paying an overdraft of this company which had been incurred on the credit of the partner-' ship, and accepted the notes of the company therefor, and when the notes were sued on, and merged in a judgment, and the property of the company, under execution, was advertised for sale, bought it in, and then deeded a one-third interest thereof to Mary E. Gilmer. He can not thus knowingly ratify and accept the benefits of the transaction, and at the same time repudiate and escape thé responsibilies incurred thereby. Porter v. Curry, 50 Ill. 319, 99 Am. Dec. 520.

9 Appellant further insists that, as the record shows that the Peabody mine was conveyed to the Stewart Mining Company for a nominal consideration only, a recovery cán not be had, as the contract provides that the balance of the purchase therein mentioned shall be paid out of the proceeds of any sale that may be made of the property. The record shows that no attempt was made, whatever, to dispose of this mine, except to the Stewart Mining Company, which company commenced working the mine about the time the contract was entered into, and was one of the principal mines worked and developed by that company, and later on the mine was conveyed to the company, as here-inbefore stated. By thus conveying the mine to the Stewart Mining Company, defendant Salisbury, by his own intentional and deliberate act, made the performance of the contract with Williams impossible on his part. And the rule is- well settled that when a party intentionally makes the performance of a contract on his part, to which he is a party, impossible, the other party may at once bring an action against him for a breach. Butrick v. Holden, 8 Cush. 233; Heard v. Bowers, 23 Pick. 455; Reusens v. Mex. Nat. Const. Co. (C. C.), 22 Fed. 522. In Wolf v. Marsh, 54 Cal. 288, the action was upon a contract in many respects similar to the one under consideration. The first part of the contract was in the form of a promissory note, with the following condition: ‘ ‘ This note is made with the express understanding that if the coal mines in Marsh Ranch yield no profits to me, this note is not to be paid and the obligation herein expressed shall be null and void.” Marsh sold the coal mines in the Marsh Ranch before they yielded him any profits, whereupon Wolf, the payee, sued to recover the amount due under the contract. Marsh defended upon the theory that the conditions of the contract had not been fulfilled, in that the mines had not yielded any profits. The court, in the course of the opinion, says: “Before the mines had .yielded any profits to the defendant, he sold and conveyed his interest in them to a stranger. By so doing he voluntarily put it out of his power ever to realize any profits from the mines. However great the yield of profits from them might be after that they could yield none to him. And the principle is elementary, if one voluntarily puts it out of his power to do what he has agreed to do, he breaks his contract, and is immediately liable to be supd therefor, without demand, even though the time specified for performance has not expired.” This same principle is declared in the case of Dill v. Pope, 29 Kan. 289. In that case Dill sold to Pope one-twelfth interest in the Colorado gold mine for a certain sum, one-half of which was paid down, and the balance was to he paid in mineral to be taken out of the mine. Before any minerals were extracted from the mine defendant Pope sold and conveyed to a third party all of the interest in the mine he had purchased from Dill. Dill brought suit for the unpaid balance of the purchase pi ice. Pope' defended under the claim that he had taken- no minerals out of the mines, and hence was relieved from the payment of the balance of the purchase price. The trial court ruled with the contention of the defendant, and the jury found the issues in his favor,, and judgment was rendered in accordance with the verdict. In passing on the question, the Supreme Court, speaking through Mr. Justice Brewer, says: “In this the court erred. By selling the interest he had purchased, he [Pope], holding no other interest in the mine, and having no. control or right to work it, disabled himself from ever complying with this condition. The moment he did this his conditional liability on the contract for the unpaid balance money became presently due. This is upon the well-settled principle that a party to a contract, who by his own act prevents the happening of a condition, is estopped thereafter to say that such a condition has not happened. No party to a contract can interfere to prevent the performance of any condition, and then claim any benefit or escape any liability from the failure of such performance.” The facts in this case make a much more conclusive case for the plaintiff than the facts in either of the cases cited. O. J. Salisbury and his partners in business acquired the legal title to, and got possession of, the property under the agreement, and the deed therein mentioned, and, for a nominal consideration, disposed of the mine to a corporation- of which they were in control, and owned most of the capital stock, O. J. Salisbury taking the initiative and leading part in the transaction, with the understanding that he would subsequently purchase the entire property of the Stewart Mining Company, including the Peabody mine, at execution sale in his own name for himself, Monroe Salisbury, and Mary E. Gilmer, which he subsequently did. Afterwards these parties joined in a deed, and disposed of the property thus acquired, including the Peabody mine, for the sum of $100,000. Therefore it will be seen that the property was eventually sold for a valuable consideration by these parties, and they, having accepted the benefits of the contract, can not escape the liabilities imposed by its terms. In other words, they could not by a circuitous method of dealing, which the record shows was, in effect, between themselves, appropriate and dispose of the property as their own, and by the same series of transactions release themselves from the liability to pay the balance of the purchase price.

"We find no reversible error in the record, and the judgment is therefore affirmed, with costs.

BASKIN, C. J., concurs. BARTCH, J., dissents.