Arapahoe Cattle & Land Co. v. Stevens

• Decision Date: 06 December 1889
• Citation: 13 Colo. 534,22 P. 823
• Parties: ARAPAHOE CATTLE & LAND CO. v. STEVENS.
• Court: Colorado Supreme Court

22 P. 823

13 Colo. 534

ARAPAHOE CATTLE & LAND CO. v. STEVENS.

Supreme Court of Colorado

December 6, 1889

Appeal from superior court of Denver.

Appellee as plaintiff, filed his complaint in the superior court alleging: (1) The corporate existence of defendant, the present appellant. (2) That in February, A. D. 1884, the said defendant, desiring to borrow the sum of $15,000, then and there agreed with the plaintiff, in consideration of his procuring for said defendant company a loan of such or a less sum of money, to pay to him, for procuring the same, 33 1/3 per cent. of any such sum so as aforesaid by him procured to be loaned to it, to be paid to the plaintiff in shares of the capital stock of the said the Arapahoe Cattle & Land Company of equal amount; that then and there plaintiff procured to be loaned to said defendant the sum of $5,000, which said defendant then and there received from the plaintiff, and applied to the uses and purposes of said company. It is also alleged that before bringing suit plaintiff frequently requested the defendant to deliver to him the shares of stock so as aforesaid promised, but that the defendant failed and refused to deliver said stock, or any part thereof, to his great damage, etc. The prayer of the complaint is (1) that the defendant be decreed to assign and deliver to the plaintiff shares of the capital stock of said defendant company equal in value to the sum of $1,666.66; (2) that the defendant be decreed to account with plaintiff for any and all dividends due on the shares of the capital stock of said company, equal in value to the sum of $1,666.66, since the said 1st day of February, A. D. 1884, and to pay the same to plaintiff; (3) that the defendant be decreed to pay to the plaintiff the sum of $1,666.66, together with legal interest thereon from the 1st day of February, A. D. 1884, and damages for detaining the same; (4) that the plaintiff have his costs of his suit, and such other and further relief as the court may decree just and equitable. To this complaint the defendant answered, specifically denying each and every allegation thereof except the first. Upon these pleadings the cause was tried to the court, without the intervention of a jury. Upon such trial the issues were found for the plaintiff, and judgment in his favor accordingly entered for the sum of $2,066.66. To reverse this judgment the case is brought here by appeal.pay plaintiff, in its capital stock 33 1/3 per cent. of any sum he could procure to be loaned to it.

L. P. Marsh, for appellant.

T. D. W. Youley, for appellee.

HAYT J. ( after stating the facts as above.)

The points relied upon by appellants for a reversal of the judgment may be briefly stated as follows: (1) Insufficiency of the evidence to establish the alleged agreement. (2) Failure of the proof to show the performance by plaintiff of the conditions imposed upon him by the terms of the alleged agreement. (3) That said agreement is ultra vires, and cannot be enforced against the company if proven.

The uncontroverted evidence discloses that the defendant company was organized by E. F. Lamb, A. V. Scherrer, and J. Jay Joslin, on or about the 2d day of January, 1884, with a capital stock of $300,000. The purposes of the organization were set forth in the articles of incorporation as follows: 'Buying and selling of cattle sheep, horses, and mules, and the breeding of the same; also buying and selling lands; also all other business incidental to stock-raising; also buying and selling of real estate in the territories of Wyoming and New Mexico, and in the state of Colorado.' And by said articles of incorporation it was further provided that the management of the corporate business should be by a board of three trustees, and that the aforementioned corporators should constitute such board for the first year. At a meeting of the board of trustees, held upon the same day, the offices of president, general manager, secretary, and treasurer were created and filled by the election of A. V. Scherrer as both president and general manager; E. F. Lamb, secretary; and J. Jay Joslin, treasurer. Although but a small portion of the capital stock of the company had been subscribed for at this time, and the company had but little, if any, money in its treasury, by resolution the president and secretary were duly authorized to purchase for the company from Henry Gebhardt certain ranches, together with a large stock of horses and cattle, and to pay therefor a sum not to exceed $250,000. How this money was to be raised is not disclosed. The purchase was, however, made in accordance with said resolution, $250,000 being the consideration agreed upon. When all this money was to become due by the terms of the contract does not appear. It is sufficient, however, for the purposes of this case, to say that the company became obligated to pay Mr. Gebhardt $48,000 upon said purchase on or before the 29th day of February, 1884. If it was anticipated that this amount could be realized before that date from the sale of certificates of stock in the corporation, it soon became evident that such anticipation would not be realized; and, as the time approached for making the payment, the officers of the company evidently became much alarmed for fear that the company would make default. About the time this payment fell due an arrangement was effected whereby Mr. Gebhardt agreed to receive Mr. Joslin's individual note for $5,000, and $10,000 of the capital stock of the company, in lieu of an equal amount of cash. These items, with $18,000 in cash in the treasury, made a total of $33,000 available in discharge of the payment of $48,000, leaving a balance of $15,000 to be provided for. In this emergency, the plaintiff, who had become familiar with the company's affairs, having acted as its attorney in some matters, was applied to for assistance in securing this balance. The negotiations on the part of the company were conducted by Mr. Scherrer, Dr. Smythe, and Mr. Lamb, acting together, the former being president and general manager at the time, and the latter its secretary, while Dr. Smythe, who was a stockholder in the company, had in some way also become a trustee. In reference to the negotiations, Dr. Smythe says: 'The substance of the proposition to Mr. Stevens was like this: that, if he could procure for the company $15,000, the company would give him $5,000 in stock, or, for a less amount, a proportionate amount of stock.' And in this statement the witness is corroborated, not only by the plaintiff and Mr. Lamb, but also, in the main, by Mr. Scherrer; although the latter states that he and Mr. Lamb were to furnish the stock, and not the company. Under this evidence, the trial court could...