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Tom Reed Gold Mines Co. v. United Eastern Mining Co.

Supreme Court of Arizona

February 23, 1932

TOM REED GOLD MINES COMPANY, a Corporation, Appellant,
v.
UNITED EASTERN MINING COMPANY, a Corporation, Appellee

APPEAL from a judgment of the Superior Court of the County of Mohave. Ross H. Blakely, Judge. Judgment affirmed.

Messrs. McAdoo, Neblett & Clagett, Mr. E. H. Mitchell, Mr. Frank G. Swain and Mr. Louis L. Wallace, for Appellant.

Mr. R. L. Alderman and Mr. Elmo Bollinger, for Appellee.

OPINION

[39 Ariz. 534] LOCKWOOD, J.

United Eastern Mining Company, a corporation, hereinafter called plaintiff, brought suit against Tom Reed Gold Mines Company, hereinafter called defendant, to recover damages for the alleged removal by defendant of certain ore from the mine of plaintiff. The case was tried to a jury, which returned a verdict in favor of plaintiff in the sum of $20,000, and the matter is before us for review.

The assignments of error in effect present only the question of whether the statute of limitations was properly applied. It is the contention of plaintiff that the action is governed by paragraph 711, subdivision 3, Revised Statutes of Arizona, 1913, Civil Code, while defendant insists that paragraph 710, subdivision 2, of that Code is applicable. These subsections read respectively as follows:

"711. There shall be commenced and prosecuted within three years after the cause of action shall have accrued. . . .

"(3.) Actions for relief on the ground of fraud or mistake. The cause of action in such case not to be deemed to have accrued until the discovery, by the [39 Ariz. 535] aggrieved party, of the facts constituting the fraud or mistake."

Page 450

" 710. There shall be commenced and prosecuted within two years after the cause of action shall have accrued. . . .

"(2.) Actions of trespass for injury done to the estate or the property of another."

The first matter we consider is, When does a statute of limitations begin to run in case the facts which give rise to the cause of action are unknown to the plaintiff? It is the general rule that knowledge of the plaintiff is immaterial -- the statute runs from the time the cause of action accrues. Stockmen's State Bank v. Merchants' etc. Bank, 22 Ariz. 354, 197 P. 888; 37 C.J. 969. Courts of equity, however early began to apply a different rule in cases where the defendant had by his fraudulent conduct concealed from the plaintiff the existence of the facts which gave rise to the cause of action, and held that under such circumstance the statute did not begin to run until after the plaintiff knew, or reasonably should have known, of the existence of such facts. Blair v. Bromley, 5 Hare 542, 67 Eng. Reprint 1026; Lieberman v. First National Bank, 8 Del. Ch. 519, 82 Am. St. Rep. 414, 48 L.R.A. 514, 45 A. 901; Moses v. St. Paul, 67 Ala. 168. The earlier cases, however, held that in an action at law such conduct on the part of the defendant did not prevent the running of the statute. Allen v. Mille, 17 Wend. (N.Y.) 202; Callis v. Waddy, 2 Munf. (Va.) 511; Million v. Medaris, 6 Baxt. (Tenn.) 132. But the later and better decisions are not to the effect that in law as well as in equity a defendant who, by his conduct, has prevented a plaintiff from knowing of the existence of the facts upon which an action is based, is estopped from setting up as against such plaintiff the bar of the statute of limitations until after the plaintiff knows, or reasonably should have known, of the existence of such facts. Bailey [39 Ariz. 536] v. Glover, 21 Wall. (88 U.S.) 342, 22 L.Ed. 636; Kane v. Cook, 8 Cal. 449; First Mass. T. Corp. v. Field, 3 Mass. 201, 3 Am. Dec. 124; American Tobacco Co. v. People's Tobacco Co., (C.C.A.) 204 F. 58; Oklahoma Farm Mort. Co. v. Jordan, 67 Okl. 69, 168 P. 1029. This rule is obviously based on the theory that no man may profit by his own wrong, and in our opinion is both just and logical.

The question has been raised both in England and in the United States, in cases involving underground trespass and removal of ore, coal and similar substances. The earlier English decisions, and at least one of the American decisions, hold that the action was invariably and necessarily in trespass, and that the statute commenced running from the time of the trespass, regardless of the knowledge of the plaintiff of its existence. Imperial Gas Light & Coke Co. v. London Gas Light Co., 156 Eng. Reprint 346, 10 Ex. 39; Golden Eagle M. Co. v. Imperator-Quilp Co., 93 Wash. 692, L.R.A. 1917C 113, 161 P. 848. The later English cases, however, have modified the rule, holding that, when the trespass was wilful, the statute did not begin to run until the facts were known to plaintiff, but that, if the trespass was inadvertent, it ran from the time of the actual trespass. Bulli Coal M. Co. v. Osborne, 1899 A.C. 351; Trotter v. Maclean, 1877, 13 Ch. Div. 574; Dean v. Thwaite, 21 Beav. 621, 52 Eng. Reprint 1000. A number of American states have explicitly provided a special statute of limitations for cases of underground trespass, while Arizona has no such statute. We think, however, the reasoning of the cases which hold generally that the statute does not begin to run when a defendant conceals from a plaintiff the existence of a cause of action is sound when applied to underground trespass cases, both international and inadvertent, also, and we therefore hold that no statute of limitations begins to run in any underground trespass [39 Ariz. 537] case until the plaintiff either knows, or has reasonable cause to know, the facts which constitute the trespass.

This rule is not questioned, indeed by the defendant, but its contention is that, although the cause of action is not deemed to have accrued until the plaintiff had knowledge, or reasonable ground to know, of the trespass, yet the action which then accrues is still necessarily and always one of trespass, and not an action in fraud or deceit, ...


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