Langley v. Devlin

163 P. 395, 95 Wash. 171, 4 A.L.R. 32, 1917 Wash. LEXIS 775
CourtWashington Supreme Court
DecidedMarch 2, 1917
DocketNo. 13434
StatusPublished
Cited by31 cases

This text of 163 P. 395 (Langley v. Devlin) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Langley v. Devlin, 163 P. 395, 95 Wash. 171, 4 A.L.R. 32, 1917 Wash. LEXIS 775 (Wash. 1917).

Opinion

Chadwick, J. —

Appellants brought this action to recover their proportionate share of an one-tenth interest in certain coal mining property which respondents, Page and Devlin, had retained and, as it is alleged, fraudulently concealed from plaintiffs and others interested in the property, when they passed the title to the Corbin Coal & Coke Company, the present owner. It is not denied that there was originally a mutuality of interest in the property, but defendants contend that they took an option upon the several interests of their co-owners at a price that was satisfactory to them, and thereafter sold the property in due course of business to Mr. Corbin.

Appellants insist, that the property was sold under the option plan upon the false representation made by respond[173]*173ents to the other parties that Mr. Corbin was interested in the property; that he would pay no more than $125,000 for the property, being $25,000 to each of the appellants and respondents and $25,000 for the other interests; that Mr. Corbin would not deal, with any of the several partners other than respondent Page; that, at the time, it was actually understood between Page and Devlin and one Roberts, an employee of Mr. Corbin who had the matter in charge, that Mr. Corbin would take the property at a price in money and a retained interest, aggregating a ■ value greatly in excess of the sum represented as the extreme price he would pay. The money paid to the several partners by Page and Devlin was the money paid by Mr. Corbin to them. The Corbin Coal & Coke Company was organized, and one-tenth of the stock was issued to Page and Devlin.

The case was made up on the issues of fraud and the statute of limitations. After a trial on the merits, the court below found with the appellants, and made findings and conclusions upon the issue of fraudulent concealment. A motion for a new trial was made and allowed by the court upon the theory that others interested would not be bound by any judgment that might be entered. A new trial was ordered with directions to bring in new parties. Disclaimers were obtained from all of the other parties, save one or two who had been witnesses upon the trial. Appellants then began an original proceeding in this court, praying for a writ of certiorari, seeking to compel the entry of a judgment in accordance with the finding of the court. This court held against their contention. State ex rel. Langley v. Superior Court, 73 Wash. 110, 131 Pac. 482. It was afterwards held that the testimony taken upon the so-called new trial should be supplemental only to the testimony that had already been taken (Langley v. Devlin, 87 Wash. 592, 151 Pac. 1134), so that the trial really proceeded as if the order granting a new trial had been to reopen the case for additional testimony. When the case again came on for hearing, the question [174]*174whether appellants knew of the retention of the stock more than three years before the action was begun became the paramount issue. The statute is:

“An action for relief upon the ground of fraud, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.” Rem. Code, § 159, subd. 4.

At the conclusion of the trial, the court adhered to its finding that there had been a fraudulent concealment of the fact that the respondent partners had retained an one-tenth interest in fraud of the rights of the appellants, but found, as a fact, that appellants had knowledge of the fraud more than three years before the action was begun. Judgment of dismissal was accordingly entered in favor of respondents.

The case comes to us upon the whole record. For present purposes, the statement of the facts in the case of Galbraith v. Devlin, 85 Wash. 482, 148 Pac. 589, is sufficient. We are satisfied the finding of the trial judge in this case (essentially the same facts were found by another trial judge in the Galbraith case), that respondents were guilty of a fraud upon those who had mutual interests in the property, is sustained by a preponderance of the testimony. The only issue, then, is whether appellants were barred by the statute of limitations.

Appellants contend that they did not know that respondents had retained a stock interest until about December 20, 1911. The action was begun January 8, 1912. They admit that they knew that Page and Devlin were interested in the property, but insist that Page and Devlin, by conduct and actual representation, fostered the understanding that Mr. Corbin was hard up at the time the sale was made, and that they, having confidence in the property, had put $47,000 back into the property and had become interested as purchasers of the stock. One fact is prominent, that Page and Devlin said nothing to either of the appellants that would suggest an ownership other than as might have been acquired [175]*175by purchase, or which could be construed as even an indirect disclosure of the fact that they had retained an one-tenth of the property, although, up to the time this action was begun, the parties met frequently and were on good terms, and at least one of the appellants was interested in other investments with them.

Appellants testify that their first knowledge of the fact came from one J. J. O’Neill, theretofore a friend of all parties, but who admits that, in revenge against Page and Devlin, who he claims had beaten him out of $7,500 in another deal, and to “get even” with them, he went to W. J. Langley and told him that Page and Devlin had defrauded the other partners by secretly retaining an one-tenth interest in the property, and that they had a cause of action against them; that the action should be begun at once, as the company would have a meeting soon and the stock might be put beyond the reach of a judgment. O’Neill now denies that he furnished original information, or told appellants what they did not know, but the fact remains that, immediately after he had suggested a lawsuit, appellants went to a lawyer in Los Angeles, in or in the vicinity of which city the parties all lived, and submitted the facts to him. The attorney told them he thought they had a case, and advised them to go to Spokane to begin their suit. Spokane was the home of the corporation.' O’Neill gave W. J. Langley a letter of introduction to Mr. Cannon, then and now a practicing lawyer in Spokane. After a consultation, Mr. Cannon inquired directly of Mr. Corbin or the officers in charge of the company, and finding the fact to be that Devlin and Page had retained an one-tenth interest, began suit without further delay.

After the motion for a new trial had been granted and pending the second hearing, O’Neill fell out with appellants because, as he contends, they had not given him, or because they refused to sign an agreement to give him, twenty shares of the stock they hoped to recover. In the meantime, and [176]*176before the writing of a letter to W. J. Langley charging him with refusing to abide his contract, Page and Devlin paid O’Neill the $7,500 which they had theretofore repudiated. Moved, apparently, by the double motive of a new love for Page and Devlin and a newly hatched hatred for appellants, O’Neill seems to have given way to his admitted disposition to “get even” with appellants and became a partisan and a witness for the respondents. The court below rejected his oral testimony, but did give credence to the letter which he had written to W. J.

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Bluebook (online)
163 P. 395, 95 Wash. 171, 4 A.L.R. 32, 1917 Wash. LEXIS 775, Counsel Stack Legal Research, https://law.counselstack.com/opinion/langley-v-devlin-wash-1917.