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for appellants. This judgment was reversed by the court of appeals in 18 Colo. App. 353, 71 Pac. 885. The cause was again tried and the trial court directed a verdict in favor of plaintiffs. At the close of the testimony, the defendants asked to amend their answer by adding the following: "That the plaintiff company are estopped from claiming any title to the property levied upon by the defendant Craig for the reason that they held themselves out as being the absolute owners of the said property and by said open and public representation led people, and particularly the defendants herein, to give them the credit which they received, because of such open and public administration of ownership, to wit: John A. Leschen, Henry Leschen, Isaac O. Sutphine, and J. B. Bell." The court denied this application, and its action was assigned as error. Defendants then offered to prove that John Leschen, Henry Leschen, Isaac O. Sutphine, and J. B. Bell held themselves out to the world as being the owners of the property upon which defendants made the levy. This offer was refused, and error is assigned to the court's action in this respect. The court did not err in either particular.

It was determined by the court of appeals that testimony offered for the purpose of showing that the plaintiff corporation was estopped-and such was the object of the proof offered in this case-could not be admitted in the absence of a plea. Defendants, of course, knew of the ruling of the court of appeals before this second trial and if they desired to interpose such a plea, application should have been made to amend the answer previous to the trial and not at the close of the testimony.

At the time this action was commenced the law provided that foreign corporations shall not be "permitted to do any business in this state" until the fee for filing the articles of Encorporation shall have been paid. Session Laws 1897, p. 157, c. 51. Plaintiff was a Missouri corporation. It had not paid the fee, and objection was made to the introduction of the articles of incorporation because it had failed to comply with the statute. This matter was not raised by the pleadings, Defendant's answer did not aver that the corporation had failed to comply with the law. There is no proof that the corporation did any business in this state other than the purchase of the mining machinery involved in this action. The Supreme Court of the United States in Cooper Mfg. Co. v. Ferguson, 113 U. S. 734, 5 Sup. Ct. 741, 28 L. Ed. 1137, in construing a similar statute says: "Reasonably construed, the Constitution and statute of Colorado prohibit, not the doing of a single act of business in the state, but the carrying on of business by foreign corporations without filing a certificate and the appointment of an agent as required by the statute." We held in Colorado Iron Works Co. v. Sierra

Grande M. Co., 15 Colo. 499, 25 Pac. 325, 22 Am. St. Rep. 433: "The sale of one lot of mining machinery is not doing business within the state." The statute of 1877, being section 499, Mills' Ann. St., provides that: “Foreign corporations shall before they are au thorized or permitted to do any business in this state, make and file a certificate," etc. The law of 1897 provides that "no such corporations * shall have or exercise

any corporate powers or be permitted to do business in this state until the said fee shall have been paid." It has been repeatedly held that the statute of 1897 did not prohibit a corporation from suing to protect its property or other rights. Utley et al. v. Clark-Gardner Lode M. Co., 4 Colo. 369; Gates Iron Works Co. v. Cohen, 7 Colo. App. 341, 43 Pac. 667. See, also: N. W. Mutual Life Ins. Co. v. Overholt, 4 Dill. (U. S.) 287, Fed. Cas. No. 10,338; Cooper Mfg. Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137; Fritts v. Palmer, 132 U. S. 282, 10 Sup. Ct. 93, 33 L. Ed. 317. There is nothing in the act which prohibits foreign corporations from acquiring personal property in the state. Having acquired it, they have the right to protect it from unlawful interference. If this were not true, evil disposed persons might appropriate such property to their own use without fear of punishment.

The court refused to permit defendants to prove the price for which the property was sold at the constable's sale, and instructed the jury that the value of the property in controversy was $2,500. This is assigned as error. Evidence introduced as to the value of the property is overwhelming to the effect that it was in excess of $2,500. The allegation in the complaint is that the property was of the value of $2,500. This allegation was not denied in the answer. No person testified that the property was worth less than $2,500. Defendants having failed to deny that the property was worth less than $2,500, and the proof showing that it was worth more than that, the court was justified in instructing the jury as to its value. Defendants cannot be heard to complain of not being permitted to prove that which they did not allege, or to disprove that which by their silence they admitted. It is said by defendants that, while under the pleadings the question of value was not at issue, yet the parties had treated it as one of the issues to be tried, and to have submitted evidence upon it without objection, and have thereby waived all objections to the form of the answer. Because plaintiffs introduced testimony as to the value which was not in issue, without objection upon the part of defendants, this would not give the right to defendants to introduce immaterial or incompetent evidence.

This disposes of the alleged errors argued by defendants in their brief, and in our opinion the contentions of defendants are not meritorious. We are unable to see wherein

the court erred in the trial or in its instructions to the jury.

The judgment will therefore be affirmed. Affirmed.



38 Colo. 325)

TORBERT v. MONTAGUE. (Supreme Court of Colorado. Dec. 3, 1906.) 1. EVIDENCE-PAROL EVIDENCE.

The legal effect of a blank indorsement on a note cannot be varied by parol.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 20, Evidence, §§ 1807-1812.]


Under Acts 1897, pp. 227, 232, c. 64, §§ 82, 109, in relation to negotiable instruments, providing that presentment for payment and notice of dishonor may be expressly or impliedly waived, they may be waived by acts and declarations of the indorser calculated to mislead the holder, or to induce him to forbear taking necessary steps to charge the indorser.

[Ed. Note. For cases in point, see Cent. Dig. vol. 7, Bills and Notes, § 1203.]

Appeal from District Court, Arapahoe County; Booth M. Malone, Judge.

Action by Edna Montague against W. R. Torbert. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

Henry Howard, Jr., for appellant. Lucius W. Hoyt and C. F. Miller, for appellee.

MAXWELL, J. A trial to the court below, without a jury, resulted in a judgment against appellant as indorser upon three promissory notes. It is conceded that there was no presentment of the notes for payment, as required by section 70, p. 225, and no notice of dishonor, as required by section 89, c. 64, p. 228, of the Acts of 1897, "Negotiable Instruments" (3 Mills' Ann. St. Rev. Supp. §§ 245m, 247d). But it is claimed that there was a waiver of presentment and notice of dishonor under sections 82 and 109 of the above statute, which are as follows:

"Sec. 82. Presentment for payment is dispensed with: *** (3) (3) By waiver of presentment express or implied."

"Sec. 109. Notice of dishonor may be waived, either before the time of giving notice has arrived, or after the omission to give due notice, and the waiver may be express or implied."

Over defendant's objection plaintiff's husband, who was acting as her agent in the matter, was allowed to testify, in substance, that at the time the notes were indorsed and delivered to witness by Mr. Fowler, of the firm of Torbert & Fowler, of which firm appellant was a member, Mr. Fowler said, quoting from the abstract of the record: "That they [meaning Torbert & Fowler] would be responsible for the interest and the principal when it becomes due; that I would have nothing to do whatever with the

collection of the note, or the principal of it; that they would look after the collection of the note when it became due and pay me the interest when it became due"; and that the same statement was substantially repeated several times thereafter prior to the maturity of the notes. A motion to strike out all of this testimony interposed by defendant's counsel was overruled, and an exception saved.

There is evidence in the record to the effect that Torbert & Fowler were conducting a chattel loan and business chance business in the city of Denver; that the notes upon which this suit was brought were indorsed by Mr. Fowler in the name of Torbert & Fowler at the time they were delivered to appellee's agent; that the firm of Torbert & Fowler managed and conducted the entire business for appellee, collecting and paying over to her the installments of interest as they fell due and a portion of the principal of one of the notes, which seems to have been realized from the foreclosure of a chattel mortgage given to secure the note upon which a partial payment was made. In short, the evidence tends to prove that Torbert & Fowler were acting as the agents of appellee in the matter. Appellant did not introduce any evidence. The judgment of the court, set forth in full in the abstract, conclusively shows that it was based, in part at least, upon the testimony of the witness as to a parol agreement made contemporaneously with the indorsement of the notes to appellee. It is settled in this state that the legal effect of a blank indorsement, which was the indorsement upon the notes sued upon in this action, cannot be varied by parol. Martin v. Cole, 3 Colo. 113; Dunn v. Ghost, 5 Colo. 134; Doom v. Sherwin, 20 Colo. 234, 38 Pac. 56. This being the rule, all testimony as to a parol agreement between the indorser and the indorsee contemporaneous with the indorsement of the note sued upon was incompetent, and should have been rejected.

It is insisted by appellee that there is sufficient evidence in the record, exclusive of the incompetent testimony above referred to, to support the finding of the court to the effect that there was a waiver of presentment for payment and notice of dishonor. As seen above, by sections 82 and 109 of the negotiable instrument statute presentment for payment and notice of dishonor may be waived, and the waiver may be express or implied.

Appellant concedes this to be the law, but insists that the testimony relied upon, which is quoted from the abstract, supra, does not prove a waiver. The findings of the court were as follows: "I am compelled to find, from the evidence in the case, that the evidence discloses the fact that the conduct and promises and manner of transacting the business by the firm, on the part of Mr. Fowler, at that time misled and caused the plaintiff

Court, according to the headnote, held: "Whether certain declarations by the indorser of a note amounted to a waiver of demand on the maker and notice to the defendant, or to a new promise in consideration of forbearance, are questions of fact for the jury, under instructions from the court, not mere questions of law." Declarations intermixed with acts and conduct, as in this case, seem to us to raise a question of fact to be determined by the court or jury. So the rule is stated by Daniel, § 1103, and Randolph, § 1383, quoted above. The court below found this fact against the appellant, and we do not feel at liberty to disturb it.

to rely upon those promises and upon that | 8 L. Ed. C87, the United States Supreme course of conduct, to the extent that she left the matter entirely to the firm of Torbert & Fowler to attend to the collection and take charge of the matter, and that the evidence discloses they got their pay for it and got their commission on this matter, and undertook the responsibility of doing it, and that was the cause, under the evidence at least, for the failure on the part of the plaintiff to present these notes and give any further notice of dishonor." The authorities The authorities are: "Any act, course of conduct, or language of the drawer or indorser calculated to induce the holder not to make demand or protest or give notice, or to put him off his guard, or any agreement by the parties to that effect, will dispense with the necessity of taking these steps, as against any party so dealing with the holder." Daniel on Negotiable Instruments, § 1103. "Waiver may

be implied from the actions of the drawer or indorser; it being a question of fact for the jury whether such acts amount to a waiver. Any act which puts the holder off his guard and so induces him to neglect proper demand or notice is a waiver." Randolph on Commercial Paper, § 1383. In Bryant v. Wilcox, 49 Cal. 47, it is said: "But the court finds that immediately before the maturity of the note the defendant told the plaintiff 'to give himself no uneasiness in regard to the payment of the note: that it would be paid at maturity; that he was collecting money for defendant, Wilcox [the maker of the note], and that he, Feder, would see that the note was paid.' This promise amounted to a waiver of demand and notice." Parsons states the law on this subject thus: "Demand and notice may be waived by an act of the indorser or drawer calculated to put the holder off his guard, and prevent him from treating the note as he would otherwise have done." 1 Parsons on Notes & Bills, 582. On this subject Edwards says (section 848): "And any conduct on the part of the drawer or indorser calculated to, and actually inducing the holder to, omit serving him with a regular notice, will have the same effect." That is, the same effect as an agreement made by the drawer and indorser waiving notice. See, also, Boyd v. Bank of Toledo, 32 Ohio St. 526, 30 Am. Rep. 624; Marshall v. Mitchell, 35 Me. 21, 58 Am. Dec. 697; Bruce v. Lytle, 13 Barb. (N. Y.) 163.

The question to be determined is whether, upon a fair construction of the language used by Fowler, his conduct in relation to the matters in controversy, and his acts as agent of appellee, was calculated to mislead appellee, to put her off her guard, and to induce her to forbear taking the necessary steps to charge appellant as indorser. Union Bank v. Magruder, 7 Pet. (U. S.) 287,

In view of all the circumstances surrounding this case, as disclosed by the transcript of the evidence, which has been read with great care, the judgment will be affirmed. Affirmed.

GABBERT, C. J., and GUNTER, J., con


(38 Colo. 148)

LAMPMAN et al. v. BUMP et al. (Supreme Court of Colorado. Dec. 3, 1906.) APPEAL-DISMISSAL-DEFECTS IN ABSTRACT OF


Where an appellant failed to comply with the rules in the preparation of the abstract of the record, and on a motion to dismiss appellant was given time to amend the errors, which he failed to do, the appeal will be dismissed.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 3, Appeal and Error, § 3126.]

Appeal from District Court, Teller County; Chas. C. Holbrook, Judge.

Action between Oscar Lampman and others and H. A. Bump and others, and from the judgment the former appealed. Dismissed.

Frank J. Hangs, for appellants. James J. McFeeley, for appellees.

STEELE, J. Judgment was rendered against the appellants in the district court of Teller county. They appealed to the court of appeals. In that court appellees moved to dismiss the appeal, upon the ground that the appellants, in the preparation of the abstract of record, had not complied with the rules of that court. The court of appeals denied the motion to dismiss, and at the same time ordered "that appellants have leave to amend the errors in the printed abstract within thirty days." The 30 days having expired, and the appellants having failed to correct the abstract of record, the appeal must be dismissed.



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Where the lease of a mine for royalties bound the lessee to work and develop the premises in a miner-like fashion, and in a manner conformable to good and economical mining, and so as to take out the greatest amount of ore possible, and to do a certain amount of work in each month, with the provision that failure to do so would be a violation of the covenants of the lease, it was not optional whether he would comply with the requirements as to working and developing, so that his failure to comply merely entitled the lessor to avail himself of the opportunity to forfeit the lease, but it imposed on the lessee the obligation to work the mine in the manner specified, or to respond in damages for failure to do so.


The amount of recovery under such lease, if any, would depend on the amount of ore that could have been mined if reasonable diligence had been exercised.


In an action against the lessor of a mine, answer stated that by the lease plaintiff agreed to work the mine in a manner conformable to economical mining, and so as to take out the greatest amount of ore possible; that he would work steadily and continuously, and do a certain amount each month; that he agreed on a certain date to pay a graded royalty, based on the value of the ore extracted; that plaintiff was the general manager of an adjoining mine, from which drifts and tunnels extended into the leased mine; that he had the right to use the shafts and tunnels of said mine in extracting ores from the leased mine, and could have, by performance of his covenants, extracted from said leased mine great quantities of said ore of great value, to wit, of the value of $75,000. Held, that the averments were sufficient to admit evidence in support of the counterclaim.

Appeal from District Court, Fremont County; M. S. Bailey, Judge.

Action by Harry W. Trowbridge, administrator of the estate of Charles W. Ellis, deceased, against Augustus Macon and another. From a judgment for plaintiff, defendants appeal. Reversed.

This is an action brought to foreclose a trust deed given by appellants to secure a promissory note for $500, payable to Charles W. Ellis, dated November 25, 1896. Appellants admit the execution of the note and trust deed, but plead as a counterclaim, and as an offset to plaintiff's cause of action, damages sustained by them for the failure of Ellis to perform the covenants contained in a certain bond and lease, and to comply with the terms of a written agreement made with reference to the note sued on. Briefly stated, the facts averred are as follows: On April 1, 1899, Augustus Macon executed an agreement to sell and lease to Ellis an undivided one-twelfth interest in the Augusta lode mining claim. The bond and lease was for the term of two years. The lease contained, inter alia, the following: "Second. Said Charles W. Ellis agrees that in the working and development of the said premises

he will conduct all his work in miner-like fashion, and in a manner conformable to good and economical mining, and so as to take out the greatest amount of ore possible, but always with due regard to the fu ture development and preservation of the mine as a workable mine, and the special covenants hereinafter reserved. Third. Said Charles W. Ellis shall work, develop, and mine the said premises steadily and continuously from the date of this lease, and any failure on his part to do at least ten shifts of work in each calendar month, underground, in and for the development of the said premises, will be a violation of this covenant. * Eighth. The said Charles W. Ellis covenants and agrees to pay, on or before the 15th day of each calendar month, as royalty on all ores extracted form the said premises during the preceding calendar month, as follows" (a graded royalty based upon the value of the ore extracted). It is further averred that Ellis was the general manager of the Bassick Gold Mining Company, the then owners of the Maine mine, which adjoined the Augusta mine, and from which drifts and tunnels extended into the Augusta mine, and was a large stockholder therein, and that he had the right and authority to use the shafts, drifts, and tunnels and appliances of the Maine mine for the working, mining, and developing and extracting ores found on the said Augusta mine, and that by reason of the said facilities so granted he (Ellis) was enabled to, and could have, by the faithful and honest performance of his covenants and agreements contained in the said lease, mined and "extracted from the said Augusta lode great quantities of said ore, of great value, to wit, of the full value of $75,000, and that the sum which would then and there have been due and payable to the said defendant Augustus Macon in that behalf would reasonably have amounted to the full sum of $5,000." It is further averred that at the time of the execution of said lease and agreement to sell said premises, and as a consideration for and an inducement to the said Augustus Macon to execute the said lease, the said Ellis then and there executed and delivered to the said Augustus Macon an agreement which, after referring to the note sued on and the deed of trust upon one-twelfth of the Augusta lode mining claim securing the same, and after reciting the execution and delivery of the bond and lease, contains the following: "And whereas, by the said agreements, the parties hereto have agreed that payment of said promissory note is hereby extended for the period of two years in consideration of the premises aforesaid, and it is hereby agreed that the royalties which may be due and payable to the party of the second part by the party of. the first part, under the terms and conditions of the lease aforesaid, of the said interest in said Augusta lode, shall be applied to the

payment of the said promissory note until the principal and interest due thereon is fully paid: provided, the sum due for said royalty shall be equal or exceed the said sum due said party of the first part by party of the second part, as aforesaid, and that all royalties so due shall be applied to the discharge of said sum so owing by the party of the second part, so, as aforesaid, as fast as the same are payable, in pursuance of the terms of the lease hereinbefore mentioned, and that after the payment of said promissory note, together with the interest thereon, then the party of the first part promises to surrender and deliver the said promissory note to the party of the second part." The court below excluded the evidence offered in support of this counterclaim, thereby ruling that the answer and cross-complaint did not state facts sufficient to constitute a cause of action, and rendered judgment for the amount of the note and interest and a decree foreclosing the trust deed. From this judgment and decree, appellants bring the case here for review.

Thomas Macon, for appellants. H. L. McNair, for appellee.

GODDARD, J. (after stating the facts). The only question presented for our consideration is whether the court erred in excluding evidence in support of the cross-complaint, upon the ground that it did not state facts sufficient to constitute a cause of action. It is contended by counsel for appellee that, under the lease, it was optional for appellee whether he would comply with its requirements as to working and developing the property, and that for his failure to comply with these provisions the only remedy the lessor was entitled to avail himself of was to forfeit the lease; in other words, that these requirements were merely conditions, which, if complied with, gave Ellis the right to possession of the premises, and imposed upon him the duty only to pay the royalty agreed upon in case he mined and shipped ore therefrom.

We do not so understand the law applicable to leases of this character, but rather that these requirements impose upon the lessee the obligation to work the mine in the manner specified, so long, at least, as he retains possession under the lease. In Koch's

Appeal, 93 Pa. 434, the rule is thus stated: "Where a right to mine iron ore or other minerals is granted in considertion of the reservation of a certain proportion of the product to the grantor, the law implies a covenant on the part of the grantee to work the mine in a proper manner and with reasonable diligence, so that the grantor may receive the compensation or income which both parties must have had in contemplation when the agreement was entered into." In construing a lease, as in construing any other contract, the first question to determine is what the parties thereto understood and intended, as determined by the words employed; and as an aid to the ascertainment of this intent, the situation of the parties, the subject-matter of the contract, and the purpose to be accomplished should be taken into consideration. Applying this rule to the lease under consideration, it was very clearly within the intendment of the parties that this interest covered by the lease should be worked for the purpose of benefiting both the lessee and the lessor, and with the expectation that the royalties reserved would at least satisfy the note, as provided in the written agreement, and that the expectation or anticipation of receiving such benefit was a strong inducement for the appellee to grant the lease in question. The failure, therefore, of the lessee to work and develop the property, as provided, rendered him liable for such damages as the appellants could show they suffered by reason of such failure. The amount of such recovery, if any, would depend upon the amount of ore that could have been mined if reasonable diligence had been exercised, and its value; in other words, whether there was ore that could have been mined, and the leased premises operated at such profit, after deducting the stipulated royalties, as would be regarded fair and reasonable for ventures of this kind. C. F. & I. Co. v. Pryor, 25 Colo. 540, 57 Pac. 51. The averments of the answer were sufficient to admit of proof of this character. We think, therefore, the court erred in excluding evidence thereunder.

The judgment is reversed, and the cause remanded for a new trial. Reversed and remanded.

GABBERT, C. J., and BAILEY, J., concur.

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