Placeres de Oro Co. v. Carpender

102 P.2d 407, 38 Cal. App. 2d 650, 1940 Cal. App. LEXIS 704
CourtCalifornia Court of Appeal
DecidedApril 30, 1940
DocketCiv. No. 6239
StatusPublished

This text of 102 P.2d 407 (Placeres de Oro Co. v. Carpender) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Placeres de Oro Co. v. Carpender, 102 P.2d 407, 38 Cal. App. 2d 650, 1940 Cal. App. LEXIS 704 (Cal. Ct. App. 1940).

Opinion

THOMPSON, J.

The plaintiff has appealed from a judgment which was rendered against it in a suit for damages for alleged fraud exercised by the defendant in the sale of a placer gold mine near Plaeerville in El Dorado County.

The defendant had owned the Carpender Placer Mine since 1904. He obtained it from his father, who had previously operated it to some extent. It consisted of a claim upon which there was a shaft three or four hundred feet in depth, at the bottom of which a tunnel extended easterly 2,200 feet to the property line. The tunnel also ran westerly from the shaft a distance of several hundred feet. The mine contained other lateral channels, gangways, crosscuts and drifts, from which, in addition to some breasted areas, the soil and gravel were conveyed to the surface and washed out in sluice boxes to extract its gold content. The mine followed the course of an ancient subterranean river channel called the “Blue Lead”. The pay dirt was located several hundred feet beneath the surface of the earth. Above this ancient river bed there was overlaid substrata of gold-bearing gravel and soil which, by the action of water and volcanic upheavals in past ages, were deposited in and mingled with the soil of the Blue Lead Channel. That entire region had been extensively mined from early days. The extent to which Bert Carpender’s father developed that mine does not appear. Por a period of thirty-five years the defendant either personally operated the mine or he worked in and about it while it was leased to half a dozen other men.

The defendant dug an incline shaft to a depth of 400 feet and ran a cross-tunnel for exploration purposes, several hundred feet in length, hoisting the gravel therefrom and extracting the gold by washing it out in sluice boxes. He obtained only a comparatively small quantity of gold from his personal operations. In 1907 he leased the property to a miner by the name of Pearce, who worked it for about a year, extending the main tunnel and running three short crosscut channels from which he obtained a quantity of gold. In 1909 it was leased to Dodge Burtt, who made a survey and prepared maps of the mine. He took numerous samples from the tunnels and tested them for their gold content. He did [652]*652not extend the gangways nor conduct any real mining operations. In 1911 the property was leased to G. H. Hayes, who operated it actively for fifteen months. He sank another shaft to a depth of over a hundred feet and extended a tunnel 75 feet easterly therefrom, and another one westerly a similar distance. He also ran an irregular tunnel along the course of the Blue Lead vein a distance of over 900 feet, striking a gray-pay-gravel bench from which he extracted $40,000 in gold. The defendant worked in the mine with Mr. Hayes throughout the entire term for which it was leased, with the exception of two and a half months. In 1912 the mine was leased to a man by the name of Taylor. He operated it for about a year, exploring and extending somewhat the tunnels which had been previously opened by Hayes. The defendant also worked with him every day that the lessee conducted the mine. For several years the mine was not operated, during which periods of time it remained filled with water. In 1934 Mr. Carpender leased the mine to a stock company, which explored the tunnels, testing the soil and working therein for about six months. The defendant also worked in the mine with that stock company. He was familiar with all of the gangways, crosscuts and breasting of areas which were developed. In 1929 the mine was leased to The Burke Company, which opened a drift and crosscut from the incline shaft, breasting out certain small areas. Mr. Carpender worked in and about the mine for that company throughout its term of lease and knew all about the development under its management.

All of the foregoing information was related to the purchasers by the defendant.

The defendant was born in the vicinity of the mine in question, and, during his entire lifetime he lived at the mine or in Plaeerville, near by, where he was known and highly regarded by the entire community. Many miners in that vicinity also worked in the Carpender mine and were perfectly familiar with its operations, including all of the tunnels, drifts and cross-channels. Fred Stancil had worked in the mine for Mr. Carpender as superintendent and otherwise, for several years. He knew all about the history of the Blue Lead and the development and operations of that mine.

In the spring of 1936, Malcolm W. Moss, W. D. O’Brien and J. K. Gold interviewed the defendant on several occasions [653]*653about purchasing the mining property. Mr. O’Brien was a skilled and experienced mining engineer. Mr. Carpender testified that he fully and fairly explained to them in detail the history and development of the mine, referring to a map thereof in his possession, which he informed them did not depict all of the crosscuts and tunnels which had been developed. He told them of the various leases of the mine heretofore referred to and of the works which each one completed. He spoke of the driftings and breastings of certain areas. He told of the cessation of operations and of the floodings of the mine during several periods. He said to the proposed purchasers he would send Fred Stancil, a reliable mining employee of the defendant, through the mine with them for exploration purposes, and that he would permit them to make a thorough examination and take samples of soil for testing and assaying to determine its gold content. He told them they would find “most of these drifts open”. Clearly that remark inferred they would find some of the tunnels filled ■with fallen earth and gravel. He told them “Fred could explain all about them”. Mr. Carpender was sixty years of age. He was in the habit of running the hoist. He told the purchasers that since he was the only one who could operate the hoist, he would let Stancil go down into the mine with them for the reason that he knew “just as much about it”. At least two of them, Messrs. Moss and O’Brien, visited the mine several times. Stancil accompanied them in a thorough examination of the entire underground works. No objections were offered to the character or extent of the information with which they were furnished. No criticism of the conditions observed in the mine was made. No further inquiry regarding blocked gangways or fallen dumps of gravel was made of Mr. Carpender. Apparently they were perfectly satisfied with the conditions and with the prospect of a successful operation of the mine.

May 14, 1936, the defendant gave the three men above mentioned an option to purchase the mine, together with a considerable quantity of machinery and equipment for the sum of $35,000, to be exercised on or before June 1, 1936. In the meantime they continued to examine and inquire regarding the mine, with the apparent result of entire satisfaction. The condition of the mine and the details of the transaction were discussed with the defendant several times. On June 1st, [654]*654they exercised the option and purchased the mine and machinery, paying Mr. Carpender therefor the sum of $35,000. The three purchasers conducted active operations of the enterprise as a mining partnership (secs. 2511-2513, Civ. Code), until February 20, 1937, at which date they organized a Nevada corporation to which they then transferred title to the property.

The mining operations were actively continued without substantial success until March 1, 1937. The plaintiff expended some $30,000, developing the mine.

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Bluebook (online)
102 P.2d 407, 38 Cal. App. 2d 650, 1940 Cal. App. LEXIS 704, Counsel Stack Legal Research, https://law.counselstack.com/opinion/placeres-de-oro-co-v-carpender-calctapp-1940.