23 S.D. 449 | S.D. | 1909
This is an action by the plaintiff against the defendants, which was tried to the court without a jury, and a judgment and decree rendered in favor of the plaintiff, from which the defendants have appealed'.
It is alleged in' the complaint; “That the defendant the Pitts-burg Mining Company is a corporation duly .organized and existing under and by virtue of the laws of the state of South Dakota. That during the year 1902 the plaintiff and the defendant Henry Mittnacht entered into a contract at the county of Pennington in the state of South Dakota, wherein and whereby the plaintiff and said defendant entered into a contract for the sale and negotiation of a sale of the Ducky Boy and other claims lying in the vicinity of Tigerville, southerly from Redfern in Pennington county, S. D. That the plaintiff prospected the ground, and' made a report for said purpose, and took the defendant Henry Mittnacht to the property, and said Mittnacht was to secure the parties to purchase the ground. That negotiations upon the property were made from time to time by the parties hereto, and finally the defendant Henry Mittnacht did perfect a deal for the sale and purchase of said property, organizing the defendant the Pittsburg Mining Company under the laws of the state of South Dakota for such purpose. That in the sale and negotiation of said property the said defendant' Henry Mittnacht has received, or is about to receive, a large amount of money, the exact amount of it to the plaintiff unknown,
The defendant in his answer admits that his codefendant is a corporation, and that the defendant has failed and refused to deliver to the plaintiff any money or stocks arising from the deal, and also refuses to recognize any right in the plaintiff by reason of said transaction. For a second defense the defendant Mitt-nacht alleges that on or about the 7th day of August, 1903, this defendant was instrumental in causing a contract to be made an4 entered into between one Revi W. Kimball and the said Pittsburg
The court further finds: ‘'That under the terms of sale to'the parties purchasing said property, the defendant Mittnacht was to receive as part of the purchase price of said property, in addition to the contract price to Kimball, a certain amount of the capital stock of the Pittsburg Mining Company; that the same is now held by said corporation and not issued, but that when all arrangements and details of the company’s organization shall have been
On the 10th day of January, 1905, the court proceeded to make
There was a large mass of evidence introduced, both orally and by way of depositions, but the only question necessarily iiti-
It is contended by the appellant that the contract found by the court and referee, as entered into by the plaintiff and defendant Mittnacht, was contrary to section 8, art. 17; of the state Constitution, and to sections 1271 and 1272 of the Revised Civil Code, and to good morals, and is fraudulent, unlawful, and void. The section of the Constitution reads as follows: “No corporation shall issue stock or bonds except for money, labor done, or money or property actually received; and all fictitious increase of stock or indebtedness shall be void.”
Sections 1271 and 1272 read as follows: .
“Sec. 1271. That is not lawful which is: (1) Contrary to an express provision of law; (2) contrary to the policy of express law, though not expressly prohibited; or (3) otherwise contrary to good morals.
“Sec. 1272. All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.”
A large number of authorities are cited in support of the proposition of counsel; but, in the view we take of the case, the contract, as alleged and proven and found by the court, does not come within the inhibition of the Constitution, or in any manner violate
It will be observed that the plaintiff and Mittnacht were not employed by Kimball as his agents to sell the properties at the best price obtainable for hito, but that they had an option contract, with him for the purchase of the property at a fixed sum. While it is true that neither the plaintiff nor Mittnacht had sufficient funds of his own -to pay for the property-contracted to be purchased of Kimball,' they had an option upon the property which they had a perfect right to dispose of at.an advance, and thereby
It is admitted by Mittnacht that he entered into the agreement as stated by the plaintiff, but that some time in February, 1903, he became discouraged, and gave up his efforts to dispose of the property íin connection with the plaintiff. So far as the record discloses, the plaintiff never abandoned the enterprise, or consented that the same should be abandoned, and that up to the time of tlie completion of the sale by the purchase of the properties /from Kim-ball, and the organization of the mining company, the plaintiff was constantly using efforts in connection with the defendant Mittnacht to carry out the original transaction, and that when he was informed that Mittnacht had succeeded in making a disposition of the .property, and organized the mining company, he demanded of him his half of the profits of the venture, and was informed by Mittnacht that he was not connected with the deal, and had no interests in the profits. Clearly Mittnacht could not, without the consent of the plaintiff, dissolve the. partnership, and transact the business in connection with the mining claims purchased of Kimball in his own name, and disregard the rights of the plaintiff lo share in the profits of the transaction. Such was the view of this court in a similar partnership transaction, in which one of the partners sought to end the partnership on his own motion, and proceeded to transact the business of the partnership individually. Goodfellow v. Kelsey, 21 S. D. 241, 111 N. W. 555. This court in that case says: “He [the plaintiff], having entered into the venture jointly with the other parties for the sale of‘ both tracts, it was not competent for the defendants to exclude him without his consent from participating in the transaction resulting in the sale of
It is further contended by the appellants that the judgment against the mining company is not warranted or supported by the complaint. Clearly there is no merit in this contention, as the only claim made against the defendant company is that they be decreed to hold the 70,000 of the 75,000 shares of stock as trustee for the plaintiff, and that company is simply required to turn over to the plaintiff the said 70,000 shares of stock; and, when it shall do so, he has no further claim against the company. ' At the time the complaint was drawn all the facts subsequently disclosed by the evidence were not known to the plaintiff, and hence his allegations were necessarily somewhat indefinite, as the defendant Mitt-nacht had refused to communicate with him, as he should have done as a partner, the nature of the transaction between himself and the mining .company. There is sufficient, however, in our opinion, in the complaint to warrant the court in its findings and judgment, as against the defendant company.
It is alleged in the complaint “that in the sale and negotiation of said property the said defendant Henry Mittnacht has received, or is about to receive, a large amount of money, the exact amount of it to Ith-e plaintiff unknown, but upon information and belief plaintiff alleges that he is to receive, or has received, the sum of $10,000 as commissions on said deal. And further plaintiff alleges that the defendant Henry 'Mittnacht is to receive, or has received, as commissions upon the sale and negotiations upon said
It is further contended by the appellants that the court erred in modifying the report of the referee. Also that the report of the referee went beyond the referee’s jurisdiction, and beyond the case made by the complaint, and embraced within the issue in the action. But these contentions are clearly untenable. An interlocutory decree was entered by the court, finding the facts in favor of the plaintiff, and stating its conclusions of law thereon, and the court, having found it necessary, for the purpose of a final decree, that an accounting should be had between the plaintiff and the defendant Mittnacht, and the relation sustained by Mittnacht to the mining company, and the mining company to him, referred the case to the referee to take an account. The duty of- the referee was therefore to ascertain the state and nature of the accounts between defendant Mittnacht and the mining company, in order that the court might determine what decree should be made as against those parties. The reference, therefore, as contended for by the appellant was not the ordinary reference under the statute of a case where the referee finds the facts, and states his .conclusions of law and reports a judgment, but was simply a reference for the pur
It it also contended that there -is no evidence that the defendant Mittnacht ever received, or by any contract or understanding was to have or receive 20,000 shares of the 25,000 shares of stock issued to, and delivered to, Levi Kimball, or any part thereof, or any interest therein, but there was evidence as to this stock, submitted to both the referee and the court, and we cannot say that there was a preponderance of evidence against the finding. The contention, therefore, that there was no evidence upon this issue, or upon the issue as to Mittnacht receiving 120 shares of the stock, or is to receive it, is not sustained by the record. We shall not attempt to review the evidence in this opinion, as such a review would serve no useful purpose. We are satisfied, however, after a careful review of the evidence, that the findings of the court upon this question were sustained by the evidence.
It is further contended that the report of the referee went beyond its jurisdiction, and beyond the case made by the complaint, but. as before stated, the referee was simply acting in aid of the court in stating the account between the parties, in order to enable the court to make proper findings and judgment at the final trial of the case.
It is further contended that the court erred in modifying the report of the referee; but, as we have before stated, this reference was not made under the statute, but was made by the authority of the court as chancellor, and the court, as a court of chancery, was not absolutely bound by the findings of the referee. The rules applicable to referees under the statute have no application to referees appointed by the court merely for the purpose of taking an accounting between the parties to enable the court to enter and prepare a decree.
Finding no error in the record, the judgment of the circuit court and order denying a new trial are affirmed.