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Lucia Mining Co. v. Evans

Supreme Court of New York, Appellate Division

October 6, 1911

LUCIA MINING COMPANY, Appellant,
v.
GUILLERMO I. EVANS and HARRY B. EVANS, Respondents.

Page 417

APPEAL by the plaintiff, the Lucia Mining Company, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Kings on the 22d day of September, 1910, upon the decision of the court, rendered after a trial at the Kings County Special Term, dismissing the complaint.

COUNSEL

Charles M. Demond [Marshall Snyder with him on the brief], for the appellant.

Paul E. Mead, for the respondents.

JENKS, P. J.:

In 1901 Andy Evans took the title to the Castellano mines in the Republic of Mexico from Hartmann. He then resided in Mexico and was the president, general manager and legal representative of the plaintiff, a corporation of West Virginia, authorized to acquire mines and to carry on business in that country. He also appears as an investor in mining properties in Mexico and as the owner of several mines there. The plaintiff complains that the Castellano mines were thus purchased by it from Hartmann, and that the title was taken by Evans in trust for its sole benefit. In January, 1902, Evans conveyed an undivided half interest in the Castellano mines to Logan, who in November, 1902, conveyed that interest to the plaintiff. Evans died in the city of New York in March, 1903, intestate, leaving a widow and these two infant defendants as his only heirs at law and next to kin. In March, 1910, the widow,

Page 418

'recognizing the plaintiff's title' (according to the complaint), conveyed an undivided fourth part of the Castellano mines to the plaintiff, who now seeks a decree that that property is that of the plaintiff, that Evans took title thereto and held it only in trust, that upon his death an undivided fourth part vested in the defendants, and that they execute a deed of conveyance thereof to the plaintiff. At the close of the evidence the learned Special Term dismissed the plaintiff, who now appeals from the judgment thereupon entered.

Logan was a lawyer residing in the city of New York, was a director and counsel for the plaintiff, and was president of the San Luis Mining Company, also a corporation created under the laws of West Virginia. The principal actors in the transaction of purchase were Evans and Logan. Logan is dead. The plaintiff read in evidence much correspondence between Logan and Evans on the subject of this purchase. The learned Special Term was moved to dismissal largely by its conclusion that the 'letters are equally consistent with the claim of the defendants that the mines in question were purchased not for the company, but for account of Mr. Evans and Mr. Logan, one-half each.' I think that the learned court correctly judged the correspondence as to the intention of Evans and of Logan in making the purchase. It is true that some weeks thereafter Logan suggested as a policy, not as right, that the mine should be turned into the corporations, but, although Evans acceded, he insisted that there must be compensation to him and Logan. I do not find that Logan then protested, as if the plaintiff or the San Luis Company had been the real purchaser, but on the contrary he treated the contention of Evans as natural, just to themselves and essential to any scheme of absorption.

But I think that what Evans or Evans and Logan intended to do, or what they did in formal way, or what they thought they had done about this purchase or attempted to do thereafter, is of little moment and quite aside from a controlling feature of this case. For Logan's relation to the plaintiff was fiduciary in its character. ( Hoyle v. Plattsburgh & Montreal R. R. Co., 54 N.Y. 314, 328. See, too, Reeves Real Prop. 363; Perry Trusts [6th ed.], § § 202, 207; Story Eq. Juris. [13th ed.] 310, 311.) And the evidence indicates a case of a

Page 419

constructive trust in favor of the plaintiff. In his first letter to Logan relative to this mine, Evans informs him that the price is $20,000--$5,000 cash, $5,000 in 30 days and $10,000 in 60 days, both from September 26, 1901. And he also wrote that for the first $5,000 he had time until Logan, after the receipt of that letter, could telegraph that Evans might draw on him for that sum; and he added: 'The 2 drafts I give one for five thousand and thirty days and the other for ten thousand and sixty days, signed Andy Evans, Mgr. San L. M. Co. This I had to do but with the agreement that should you object the drafts will be destroyed. You understand I do not want this property (The Castellano) for the San Luis Co. I bought it for you and me to put into our new company or as we may agree on later on. But if you should want nothing to do with this, can you help me out? Let me draw on you for the first five thousand and afterwards endorse the two drafts. You can take my San Luis stock as security.' Logan's answer, so far as it appears, was a telegram: 'Approve your purchase, but make first draft ten days.' A sight draft, dated October 8, 1901, for $5,000, drawn by Evans on Logan, 27 William street, New York city, was accepted by Logan on October 14, 1901, and paid on October 24, 1901, by check drawn by Logan, attorney. A draft for $5,000, drawn on September 26, 1901, by Hartmann, the seller of the mine, on Andy Evans, manager of the San Luis Mining Company, to be paid at 27 William street, New York, was accepted by Evans, was accepted on October 28, 1901, by the San Luis Mining Company, by Logan, president, and was paid on that day by check drawn by Logan, attorney. A draft for $10,000, drawn on September 26, 1901, by the said Hartmann on Andy Evans, manager of the San Luis mine, to be paid at 27 William street, New York city, was accepted by Evans, was accepted on October 21, 1901, by the San Luis Mining Company, by Logan, president, and was paid on November 25, 1901, by check drawn by Logan, attorney. The testimony of Martin, secretary and treasurer, and a director of plaintiff, who was entirely familiar with its affairs, is that the San Luis Mining Company owned all the stock of the plaintiff; that when the plaintiff wished moneys in 1901 it drew upon the treasurer of the San Luis Company; that

Page 420

the offices of the two companies and that of Logan were at 27 William street; that the San Luis Mining Company kept its moneys in a special bank account of Logan, attorney, and that when checks were drawn by Logan, attorney, to meet these ...


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