83 P. 833 | Utah | 1906
Lead Opinion
1. This was an action brought by plaintiffs and respondents against the defendant and appellant to obtain a decree adjudging that the defendant held in trust for them one-third of the capital stock possessed by him of the Annie Laurie Mining Company, and to compel him to account for his receipts and expenditures in connection therewith. The substance of the complaint, so far as material, is: That on or about August 11, 1898, Butan, an experienced mining engineer, and Huck, a capitalist, entered into an agreement wherein it was agreed that they would jointly engage in the business of looking for, examining, and purchasing mining properties, bonds on said properties, and options to purchase the same, and other interests therein; that Huck was to advance the necessary purchase moneys, and Butan to devote his time, labor, skill, and experience in examining, passing, and reporting upon the values of prospective or contemplated purchases, and when such properties or interests were purchased the .title thereof was to be taken in the name of Huck,
The court found all the allegations of the complaint to be' true, and made findings accordingly. As conclusions the court held that plaintiffs became the owners of one-third of the 5,000 shares of the capital stock of said Annie Laurie Mining Company, subject to the payment to said Huek out of said common property of the moneys advanced and paid by him with interest thereon, and that plaintiffs were entitled to an accounting. On the matter of the accounting the court found that the defendant’s expenditures, after allowing him interest, exceed his receipts, $51,630.26; that the receipts were made up from dividends received, and proceeds from the sale of 500 shares of $100 per share. While the defendant claimed to have sold an additional 1,000 shares to his wife for the sum of $25 per share, and also debited himself with that amount, the court found that such price was inadequate, and, on plaintiffs’ objection thereto, such debit item was not allowed, but the defendant was charged with said 1,000 shares of stock and with the dividends paid thereon. Accordingly the court reached the conclusion that the defendant was chargeable with 4,500 shares, and not 3,500, as contended for by him; and that, subject to the said unpaid expenditure of $51,630.26, he should be required to deliver to plaintiffs 1,500 shares, the one-third of 4,500. Plaintiffs offered in court to pay to the defendant the said remaining indebtedness, upon his delivering to them 516.3 shares of said capital stock and also delivering to them one-third of the stock remaining. This offer not being accepted, plaintiffs then offered in court to pay $17,210.09 (one-third of said indebtedness) upon his delivering to them the said 1,500 shares. This offer also was rejected by the defendant. A decree was thereupon entered requiring the defendant to deliver to plaintiffs
The defendant appeals attacking the findings for want of evidence, and also claiming that the court in adjudicating the accounting should have charged him with the debit item of $25,000, the proceeds of sale of the 1,000 shares to his wife, instead of charging him with the said 1,000 shares and with the dividends thereon.
2. The abstract of the record contains about 700 printed pages of evidence, and space will not permit us to detail all the evidence tending to support the findings. We can only call attention to some of 1he more prominent features. Both Rutan and Huck admit the making of an oral contract in 1897, substantially as alleged in the complaint. The only material difference between the parties as to the terms of the oral contract is whether Rutan was to have a one-third or a one-fourth interest. On this, Rutan is corroborated by four or five witnesses, who testified that Huck admitted to them that Rutan’s interest was one-third. They differ also as to the payment of expenses; Huck claiming he was to and did pay all traveling expenses; Rutan, that he was to pay his own and had paid out about $3,000 traveling and other expenses. It is, in effect, admitted by both parties, that, in pursuance of the foregoing contract, they visited, between the spring of 18.97 and 1898, in four or five western states, many different mining properties, some of which were examined and ex-perted by Rutan, and that they traveled 8,000 or 10,000 miles in search of a property, but so far none had proven to be desirable. In 1898, they acquired an interest in a process, called the Greenewalt-Robinson process, for the treatment of refractory ores. The purchase price of this was $3,000, of which Huck paid $2,000, and Rutan $1,000; and thereupon, according to Rutan’s testimony, Huck said: “This is now our first purchase, and I think we ought to define it by contract.” And, according to _ Huck’s testimony, Rutan said: “Had we not better have our contract drawn defining our in
“This agreement, made and entered into tbis lltb day of August, A. D. 1898, by and between Louis C. Iluck, party of tbe first part, and Frank C. Rutan, party of tbe second part, both of Chicago, Illinois, witnesseth:
“That whereas tbe parties hereto have by an agreement dated tbe 8th day of August, 18'98, between John E. Greene-walt ánd William Robinson, parties of tbe first part, both of Denver, Colorado, and themselves, as parties of tbe second part, purchased a certain process for tbe treatment of metalli-ferous ores; and
“Whereas it is contemplated by tbe parties hereto that a certain mine or mines may be purchased for tbe purpose of putting such process into effect; and
“Whereas it is desired by tbe parties hereto to define their respective interests in tbe process and the property and machinery to be purchased in connection therewith:
“Therefore this agreement witnesseth: that the parties hereto are the owners of said process and license under the agreement above referred to in the proportion of two-thirds to the party of the first part and one-third to the party of the second part;
“And it is further understood and agreed that in the event any mine or mines shall be purchased and machinery erected for the purpose of putting said.process into effect, the party of the first part hereto shall be paid out of the earnings or proceeds of the property, before any division shall take place, the cost of such mines and machinery and all advances made on account of such joint enterprise, and that thereafter the parties shall be interested in the said mines and said system in the same proportion, to wit: two-thirds shall be owned by Louis 0. Suck and one-third by Frank O. Rutan.”
• After the making of this contract the parties began experimenting with the process, testing its usefulness, continued their search for a desirable property, looked at properties having refractory ores, and at some not connected with the process. Other methods of treating ores and different min
Rutan remained at Salt Lake, and he and Snyder, on the 11th day of September, 1899, in the name of Kimberly, procured an option for the purchase of the Annie Laurie and the Snyder Improvement Company properties upon the terms above stated. These terms were much more favorable to the purchasers than under the Cannon option. Rutan immediately wired Huck that the option had been obtained in the name of Kimberly, and also wrote Huck to see Kimberly and arrange for an interest in the option. In the meantime, Aid-rich, who originally was with Weimer representing the sellers in the Cannon option, but at the same time also contended
After the option was procured, Eutan returned to Chicago and explained all the matters connected therewith to Huck. Eutan then saw Kimberly and also Aldrich with reference to Huck’s acquiring an interest in the option, and, on Kimberly’s request, a meeting was arranged between Kimberly, Huck and Aldrich in Chicago on the 3d day of October, 1899, when Kimberly, in writing, transferred to Huck a one-fourth, and to Aldrich a one-fourth interest in and to the option on the Annie Laurie mine upon the same conditions and terms as in Kimberly’s option. Huck could have had an interest in the Snyder improvement properties also, but he did not desire it; consequently he purchased an interest only in the Annie Laurie. There is much conflict in the evidence as to what was said between Huck and Eutan just before the making of this contract wherein Huck acquired his one-fourth interest. According to Huck the following was said by him to Eutan: “I am called here today by Kimberly and Aldrich to decide whether or not I will joiu them in the bond with Kimberly, and I have got to decide that this morning. I don’t want to take an interest in this bond for the reason that it is too large a deal for me; I want to find a small property that we could work together, and I own alone.” That Eutan kept on urg
Later a corporation was organized, called tbe Annie Laurie Mining Company, of which Huck was made tbe manager. Work was immediately commenced developing tbe properties. Eutan and Huek thereafter officed together in the company’s office in Chicago, and, according to Eutan’s testimony, they bad various discussions as to tbe method of treat
3. It is urged by appellant that the contract declared on in the complaint was the written contract of August 11, 1898; that the said written contract pertains alone to the Greenewalt-Robinson process and to mines purchased in connection therewith; and that the interest which Huck purchased in the Annie Laurie properties was wholly separate and apart from that process. As already shown, according to Rutan’s testimony, there is evidence tending to show that the said interest of Huck was purchased in view of treating the ores of the Annie Laurie properties with the Greenewalt-Robinson process, and in addition thereto Rutan testified that some of the said ores could be treated by that process. Conceding, however, that such purchase was not made with reference to or because of the said process, the terms of the contract, as stated in the complaint, are sufficiently broad to include the oral contract as testified to by both parties. It is true the date of the contract alleged in the complaint (on or about the 11th day of August, 1898) is the date of the written contract, while the evidence shows the oral contract was made in April, 1897. But the identity of the contract stated in the complaint is not alone determined by the date, but more from the allegations of the terms and conditions of the contract. If the written contract only defined
It is further claimed that Huck’s purchase was not made in pursuance of either the oral or written contract existing between, the parties. It is apparent from the evidence that Huck entered into the oral contract with Rutan because of the latter’s ability and experience as a mining engineer in passing judgment on mining properties and in ascertaining their values. The record shows that, in their travels for a property, Huck desired to, and would at several different times hqve, purchased properties at great cost that later proved to be valueless had it not been for Rutan’s emphatic advice against it. Rutan, at considerable expense of time; labor, and money made a most thorough examination and inspection of the Annie Laurie properties, and, as well as could be done without further exploration and development, tested its value, demonstrated its worth, and made a most complete and exhaustive report thereon. Huck had the benefit of all this.' In addition to this, Huck had the benefit of making a personal inspection of the properties with Rutan and the benefit of Rutan’s knowledge and experience in pointing out matters and things about the property, showing its worth. Notwith
4. After the signing of the contract whereby Huck acquired his one-fourth interest, Huck drew his check for $1,000, inclosed it with a letter, which was first penciled by Aldrich and then copied by Huck, in a sealed envelope, and handed it to Rutan later in the day at an hotel. The letter, signed by Huck, was: “I am instructed by the gentlemen associated in the bond of the Annie Laurie to hand you the inclosed check for $1,000 as a slight recognition of our appreciation of your services in connection with the transaction. I am also requested to say to you that, notwithstanding the fact that you have declared that you have no claim against the proposed purchasers under said bond, the gentlemen interested intend, in the event that the development justifies your report, to add to the remuneration here made in a substantial manner.” Huck testified that, after Rutan read the letter and saw the check, he told him to draw a new check for $500, and to credit the other $500 on a note held by Huck against him.
5. It is also claimed that the assignment made by Rutan to Snyder of the one-half interest in his contract with and claim against Huck was without consideration. So far as Huck is concerned, it matters not whether he discharges his obligation to Rutan alone or to Rutan and Snyder, so long as the discharge when made fully satisfies, as it does, the obligation, and bars all further claim against him with respect to it. It is argued that the $10,000 paid by Snyder to Rutan was not paid as a consideration for the assignment, but was paid to Rutan by Snyder as commission for the sale of the Snyder Improvement properties, from which it is also claimed that Rutan was not true to the best interests of Huck. Rutan and Snyder testified that it was paid for the assignment, and denied that it was for commissions. There is no direct evidence that it paid for commissions. True, in a letter written by Weimer to Aldrich he states that Rutan received $10,000 by way of commissions for the sale of the Snyder Improvement properties; in a letter written by Filer to Kimberly he stated that Rutan asked commissions. Neither Weimer nor Filer in any manner represented Rutan. Their statements, as to Rutan, were mere hearsay. Rut it is claimed that, because Rutan and Snyder worked together in procuring the option in the name of Kimberly, Rutan was untrue to Huck, and that the just inference is that the said money was paid for commissions. The fácts and circumstances surrounding the procuring of the option have been heretofore al-
With such modification the judgment of the court below is affirmed. Neither party is given costs on this appeal.
Our attention having been called to the death of the appellant since the submission of the case to us, the judgment of affirmance is entered as of the 1st day of December, 1905, nunc pro tunc, a time prior to his death.
Dissenting Opinion
I dissent; am of the opinion that the judgment should be reversed and a new trial granted.