165 F. 398 | 8th Cir. | 1908
In July, 1902, the defendant below, the New York & St. Eouis Alining & Manufacturing Company, was a corporation, and the defendant, M. B. Coburn, was its treasurer and general manager. The corporation bought 8,187 acres of laud in the state of Tennessee, for which it agreed to pay $87,000. The laud was conveyed to it by a deed dated July 10, 1902, and recorded Jidy 28, 1902. After this deed was recorded the mining company issued bonds to the amount of $500,000, and secured them by a mortgage upon this land and other property. In December, 1907, the complainant below, John E. Alartin, exhibited his bill against the mining company and Co-burn to recover four-fifteenths of this land and of tlie profits of the corporation, upon the ground that without his consent Coburn had used on July 28. 1902, $4,000 oí his money to pay some of the necessary expenses of the corporation in acquiring the laud and to pay a part of its purchase price. The defendants denied that any of the complainant’s money had been used for these purposes, and Coburn alleged that on July 28, 1902, lie borrowed $1,000 of the complainant, that this •$4,000 was thereafter his money and not that of the complainant, anti that lie had subsequently paid back to him and he had received $4,000 and interest on account of this loan. The court below found the issues for the defendants and dismissed the bill, and the complainant has appealed.
The theory of ihe bill is that Coburn used $4,000 of the complainant’s money without his consent to obtain the land which was deeded to the corporation, that this $4.090 was four-fifteenths of the entire amount used to obtain this land, and that four-fifteenths of the land and of the profits made by the mining company by the use of it were charged by these facts with a resulting trust in favor of Martin. Conceding that if these facts were established by the proof the complainant would have been entitled to relief, it was indispensable to the maintenance of the bill that the complainant should prove that the $4,000 was his money and not Coburn’s at the time when Coburn used it, and that he should establish this fact by clear and convincing evidence, for a resulting trust in the title to land vested by writings and record in another may be established only by strong and persuasive proof. Shaw v. Shaw, 86 Mo. 594, 598; Laughlin v. Mitchell (C. C.) 14 Fed. 382, 388; Id., 121 U. S. 411, 7 Sup. Ct. 923, 30 L. Ed. 987. Did the evidence in this case thus establish the averment that Martin was the owner of the $1,000 when it was used by Coburn? The complainant testified that on July 28, 1902, Coburn told him that be had control of some property in Tennessee upon which the mining company had to make a payment in order to hold it, and that he would like to have $4,000 or $5,000 for a few days; that Martin replied that he would let him have it, but that he wanted it hack within 10 days; that Coburn then said that the payment had to be made, that a loan on the property had been arranged, and that Martin could be absolutely sure of the money in 10 days; that Alartin then said to Coburn: “Now
“Yonr message and letter were received the same day. Was away for some time. Regarding the money: Be sure to have it here (lipis) Sept. 20. Did not write when I got hack thinking that if you had a dead sure thing with big money in sight you would use it anyway.”
On the other hand Coburn testified that he told Martin about July 28, 1902, that he wanted $4,000 or $5,000, that the mining company was issuing bonds, that he was to have $05,000 of them, that a party had agreed to loan him $27,000 on $30,000 of them as soon as they were printed and signed, that he could get the money in that way to pay $4,000 back in 10 days, that Martin then loaned him the $4,000 and took his promissory note for it and an agreement from him to give Martin 40 shares of the stock of the mining company. He testified that nothing was ever said about placing the money with a trust company in escrow, that if it had been so placed he could not have used it, and that he never heard that Martin claimed any interest in the property of the company on account of the $4,000 until after the bill in this suit was filed.
The evidence was uncontradicted that Coburn used the money between July 29, 1902, and August 13, 1902. If the testimony of Martin, was true, the money was then his, and Coburn converted it to the use of his mining company; if Coburn told the truth, Martin then had no title to the money, and the relation between them was that of debtor and creditor. The court below found this issue in favor of Coburn. Its finding may not be reversed unless it clearly appears that it fell into some error of law or made some mistake of fact in reaching its conclusion. There is no substantial evidence in the record except the testimony of Martin, which is inconsistent with its finding. Its conclusion is supported by the facts that on July 28, 1902, when Martin gave> Coburn the $4,000, the latter executed and delivered .to him his promissory note for that amount and for interest at 10 per cent, per annum after maturity, payable to the order of Martin on August 10, 1902, and a written agreement “to give J. E. Martin forty shares New York and St Eouis Mining and Manufacturing Company stock in consideration of loan and other promotion benefits”; that Martin repeatedly asked Coburn, by letters in evidence, to pay the $4,000 and interest to him, and Coburn did pay it before this suit was commenced; and that Martin never claimed or demanded any interest in the prop
The decree below must be affirmed, and it is so ordered.
NOTE. — The following is the opinion of Dyer, District Judge, filed in tlie. court below:
This is a proceeding in equity in which the complainant (a citizen of Minnesota) seeks ro recover an interest in property now owned by the defendant company in tlie state of Alabama. The defendant company is a corporation created prior to the 28th of July, 1902, and organized for the purpose of buying and selling mineral lands, mines, and quarries in the states of Tennessee and Arkansas, and for the purpose, also, of building, equipping, and operating mills and reduction works, and for manufacturing and selling fertilizers, and for other purposes.
The bill sets forth: That in 1902 Arthur R. Jone.s was president, Evans R. Darlington vice president, Harry R. Danner secretary, and the defendant Melville i>. Coburn treasurer, of the corporation. That Coburn was appointed manager of the company, and while so acting procured to be made fo said company a deed for 8,187 acres of land in Hickman county, Term., dated July 10, 1002. That the consideration for said lands was $87,000, to be ¡laid as follows: $5,000 cash; $1.0,000 on or before the 25th of July, 1902; $50,000 on or before the 5th day of October, 1902; $15,000 on or before the 0th of October, 1902; and $7,000 on or before the 5th of January, 1908. That the deferred, payments were evidenced by notes bearing G per cent, interest and secured by lien on the property conveyed. It was further provided- that, the note for $50,-000, given as aforesaid, might be satisfied by first mortgage bonds of the company, thereafter to he issued, and 850,000 of its common slock, also to be thereafter issued. It is alleged in the bill that the note for $50,000 was, in the manner provided, discharged. It is further alleged in the hill that the corporation did not have moans sufficient to meet its said obligations as they respectively became due and to carry on the business for which it was organized, and that on tlie 28th of July, 1902, the defendant Coburn had in his possession the sum of $-1,000 belonging to complainant, and that afterwards at the request of the defendant corporation this sum of money was used in part for the purpose of meeting said notes, .and partly for purchasing material for the prosecution of the business of the cor]¡oration, etc., and that it was so used without the knowledge or consent of complainant. It is further alleged that the defendant company in August, 1902, issued bonds in the sum of $500,000, due in 20 years, aud that those bonds wore secured by a deed of trust on all of the property of the defendant corporation. It is further alleged that the said $4,-000, paid as aforesaid, amounts to four-fifteenths of the cash paid-for said
The answer of the defendant corporation is in effect a specific denial of all of the material allegations made in the bill. The defendant Coburn makes answer in substance the same as his codefendant, but further says that the $4.-000 alleged to have been the money of complainant was in fact money that he had borrowed from complainant, and for which he had executed his note on the 28th of July, 1902; that from lime to time he made payments on the note, so that the whole amount thereof, with 10 per cent, interest thereon, was fully paid before the commencement of the present action.
The complainant claims that under the allegations contained in the bill, and the evidence taken in support thereof, a “resulting trust” has been accrued in his favor, and that in equity he is entitled to an interest in the property of the defendant corporation equal to four-fifteenths of its property. The defendant corporation disputes this contention. The defendant Coburn not only disputes the contention of the complainant, hut claims that the $4,000 was loaned to him by the complainant, and that the sum was paid back, with interest, before the suit was brought.
The evidence in the ease is quite voluminous, and counsel in the case have been diligent and painstaking in the preparation of briefs and in the oral presentation of the case. The evidence shows that the defendant Coburn was a moving spirit in the organization of the defendant company, and that he had much to do with procuring the conveyance of the property from Meeks and others to the company. The evidence further shows that the “cash” payment; of $5,000 was made by Jones on the 10th day of July, 1002, and the payment of 810,000 due Only 25, 1002, was also made by Evans. The evidence, seemingly undisputed, shows that the cash payment made by Jones was In the form of a New York draft, drawn by the National Bank of the Republic of Chicago, to his order. This was indorsed by Jones and delivered to Hamilton Parks, attorney for the company, who turned the same over to the grantors in the deed. The $10,000 payment due July 23, 1002, was paid by one Evans, who took up a draft for that amount at the Corn Exchange National Bank; the note being attached to the draft.
The evidence shows that Coburn was greatly interested in carrying successfully through what he calls “the deal.” He had hut little ready money at the time, and was anxious to raise $4,000 or $5,000 for the purpose of furthering the consummation of the project, to acquire the property foi the, company, and to enable the company to issue and float its bonds and issue its stock. This done would, as Coburn claimed, give him many of the bonds and much of the stock of the company, from which he claimed he could realize a large sum of money. Binding himself short of money, he went in July, 1902, to Minneapolis, the residence of complainant, for the purpose of raising the sum needed, through the assistance of complainant It appears that the complainant and Coburn were well acquainted with each other, and had been engaged together in business ventures in Wisconsin and in Joplin, Mo. After reaching Minneapolis it appears that Coburn explained quite fully to complainant his condition and wishes, and, sought to get coinplainant to become interested in the business of defendant company. This complainant declined on the ground that he had interests in Canada that required all of his capital. It was suggested by complainant to Coburn that he (Coburn) might be able to make a loan for a short time at a bank in Minneapolis. The two went together to the hank, where negotiations for the proposed loan were unsuccessful. Complainant then said to Cobum, in effect, that if he (Coburn) would return the money ($4,000) in ten days he would let him have the amount. Coburn assured him that this would be done. Thereupon Coburn executed and delivered to complainant a note, a copy of which' is as follows:
“$4,000. July 28, 1902.
“August 10th, after date, without grace, for value received, promise to pay to the order of J. E. Martin, four thousand (4,000) dollars in United States gold coin, or its equivalent, with interest at the rate of ten per cent, per annum from date until paid, payable at the Northwestern National Bank. Interest on this note to maturity has been paid in advance.
“[Signed] Melville B. Coburn.”
The complainant claims that the $4,000 was not a loan, but was to be deposited with the Colonial Trust Company in iSt. Louis, to the end that the trust company might register the bonds of tiie company and agree to act, as its financial agent, etc. If the $4.000 was a loan (and so understood by the parties at the time the same was made), to he paid back, with interest, them the complainant’s contention that there is in him a “resulting trust,” which entitles him to an interest in the property equal to four-fifteenths cannot be maintained.
I have examined as carefully as I could the evidence in the case, and have readied the conclusion that it does not, sustain complainant’s contention. In my judgment; the transaction on the 28th of July, 1002 (when tho note was given for the $4,000), was simply and purely a loan. Martin lot Coburn have the money on the assurance that it would be paid back in a certain number of days. This was not done. The letters of Martin to Coburn (covering a long period after the note was matured) convince me that Martin always regarded the money he let Coburn have as a loan, and the fact, if it be a fact, that Co-burn at various times promised to compensate Martin for the losses he claims to have sustained in Canada by the failure of Coburn to return the money at the time promised,'does not in my judgment militate in the least against the contention of Coburn that the transaction on the 28th of July, 3902, was “simply and purely a loan.” It is unnecessary, in my view of the evidence, to enter into a discussion of what is and what; is not a “resulting trust” ; for it is practically conceded by counsel for complainant, as I understand him, that, if the $4,000 transaction was a loan, then no trust resulted to complainant.
It follows, therefore, that the complainant’s bill must he dismissed; and it is so ordered. The samo order will be made in regard to tho defendant Coburn’s cross-bill.
