Charter Oak Life Ins. Co. v. Gisborne

• Decision Date: 17 October 1887
• Citation: 15 P. 253,5 Utah 319
• Court: Utah Supreme Court
• Parties: CHARTER OAK LIFE INSURANCE COMPANY, RESPONDENT, v. MATTHEW T. GISBORNE, APPELLANT

15 P. 253

5 Utah 319

CHARTER OAK LIFE INSURANCE COMPANY, RESPONDENT, v. MATTHEW T. GISBORNE, APPELLANT

Supreme Court of Utah

October 17, 1887

APPEAL from a judgment of the district court of the third district and from an order refusing a new trial. The facts sufficiently appear from the opinion.

Affirmed.

Mr Arthur Brown, for appellant.

Messrs Marshall & Royle, for respondent.

BOREMAN, J. ZANE, C. J., and HENDERSON, J., concurred.

OPINION

BOREMAN, J.:

This is an appeal from a judgment. In the spring of 1874, the appellant Matthew T. Gisborne, was the owner of one third interest in the Mono mine, situated in the Ophir mining district, Tooele county, in this territory. He obtained a bond upon the other two-thirds from his co-owners, Embody, Miller, and Heaton, and then went to New York to sell this two-thirds. Failing in this, he borrowed $ 100,000 with which to buy the interest of Embody, one of his co-owners, which was four-eighteenths of the mine. The money was furnished through defendant Stephens, trustee, and paid to Embody; and Embody made the deed of his interest to Gisborne. In return for the money thus advanced by Stephens, trustee, the appellant conveyed to him, by deed absolute on its face, all of its original interest, and all of the interest he had obtained from Embody, which two interests together amounted to ten-eighteenths of the mine. The money thus furnished came from Allen, Stephens & Co., of which firm Stephens was a member. Stephens, likewise, afterwards furnished $ 300,000 more, to enable Gisborne to buy the residue of the two-thirds of the mine; the same being the interests of Miller and Heaton, his co-owners in the mine. This money, according to agreement with Gisborne, was paid to his said co-owners in the mine, and the deed made to Gisborne; and then Gisborne, by deed absolute on its face, conveyed the same over to Stephens, trustee. Thus Stephens, trustee, held the title to the whole of the mine. Thereupon Stephens, in accordance with the wishes of Gisborne, made a declaration of trust, showing that the two deeds above mentioned, of Gisborne to Stephens, trustee, were not in fact absolute deeds, although on their faces they appeared to be such, but were made upon trusts, and that Stephens held the property in trust to receive the "rents, issues, and profits" of the mine, and to pay therefrom the expenses of operating the mine; then to pay back the $ 400,000 obtained through Stephens, trustee; then to pay Gisborne a percentage on a third of the rents, issues, and profits; and to pay Gisborne $ 275,000. After theses everal amounts should be paid, then the trustee, Stephens, was to cancel the two deeds referred to on the record; thus, according to the declaration of trust, leaving the title to the whole property finally in Gisborne. He, by a subsequent contract with Hussey, agreed to convey half of the mine to Hussey for money and services rendered; and afterwards, Hussey transferred said half interest to Stephens individually. The trustee entered upon the discharge of his duties in carrying out the trust; but the amount of ore that could be obtained from the mine decreased so rapidly that the whole output of the mine after the trustee took hold of it, only netted some $ 20,000, and thereafter failed completely, the vein being lost. The work on the mine was done, under the trustee, by two managing agents specified in the declaration of trust--the one being chosen by Gisborne, the other by the trustee. In a fruitless endeavor to find the ore vein there were heavy expenditures, amounting to nearly $ 52,000 beyond the ability of the trustee to pay. The debts thus incurred were not paid by the trustee, but were taken up by the respondent, to whom they were assigned. Allen, Stephens & Co. assigned their claims, also, to the respondent, including the claim of $ 400,000 above referred to, and advanced through Stephens, trustee. The present action was brought to subject the mining property itself to the payment of the whole indebtedness, and that the same might be declared to be charges and liens thereon. Gisborne, one of the defendants, contests the right of respondent to this. The judgment of the district court being in favor of the respondent, the appellant, Gisborne, has brought the case to this court by appeal from that judgment. The appellant contends that the claims set up as the basis of the complaint are not debts against him of the mine, and have never existed as such; that the $ 400,000 never were a debt at all, but were purchase money. He urges that, if such claims ever existed as debts, it was against the "rents, issues, and profits" of the mine, and that the "rents, issues, and profits" do not include the property itself, or the sale thereof. No personal judgment is sought against the appellant. Whether, therefore, the claims ever existed as debts against him personally, is, in this action, not material.

The first question, then, for our consideration, is whether the $ 400,000 were purchase money or not. The appellant claims that the whole transaction showed that a purchase of the property, or of two-thirds thereof, by Stephens, trustee, was the aim and object of the parties, and that Gisborne was only security in the matter, and helping Stephens to make his purchase. Gisborne went to New York, it appears, among strangers, if this theory be true, to help a stranger to buy two-thirds of the mine from his co-owners. Gisborne, however, in his testimony, says that when he went to New York he first talked of making the sale of the two-thirds upon which he held a bond, but that he failed to make the sale. He then borrowed $ 100,000, and afterwards $ 300,000 more were advanced through the same channel. If a sale to Stephens, trustee, was the intention, we are unable to see why the whole of the mine was conveyed to Stephens, trustee, when he was only buying two-thirds. Nor do we see that there was any necessity for the declaration of trust. An absolute deed of two-thirds of the mine by Gisborne to Stephens, trustee, would have answered every purpose. But it would seem that the question whether the $ 400,000 were a loan or purchase money is settled by the requirement set forth in the declaration of trust; that this $ 400,000 was to be paid back to the party who advanced it; and that Stephens, trustee, was not to hold the mine after the sums of money specified in the declaration of trust had been paid, but the title to the whole mine was to revert to Gisborne. The parties who furnished the money through Stephens, trustee, were to have nothing further to do with the property after they should get back the money which they had advanced. If the title of the mine was to revert to Gisborne, it could not have been a sale to Stephens, nor to Allen, Stephens & Co. The provision in the declaration of trust, that Gisborne was to have title to the property after the payment of the sums of money thereinafter specified, wholly precludes the idea that at that time the parties contemplated a purchase of the property, or of two-thirds of it by Stephens, or by Stephens, trustee, or by Allen, Stephens & Co. The idea of a sale, and that the purchaser was not to get the title, are not consistent.

But it is said that we should consider what was to take place after these sums were paid off, and the title placed in Gisborne and that, if this were done, a sale would appear to have been the ultimate object of the whole transaction. The evidence tends to show that subsequent to the payment of the sums referred to, and subsequent to the title being placed in Gisborne, a conveyance was to be made by Gisborne to Hussey of one-half of the mine, and that thereafter Hussey was to convey such half interest to Stephens individually. We do not think that we are authorized to consider these matters which were to occur after the payment of the sums referred to, and after the title should be placed in Gisborne, unless they were parts of the contract or transaction of which the declaration of trust was the "final act;" for it does not appear, nor is it claimed, that after the execution of the declaration of trust there was any new contract between Gisborne and Stephens, or any alteration in the old contract. The two deeds by Gisborne to Stephens, trustee, and the declaration of trust which followed, embodied the terms of the contract between the parties. We can, perhaps, consider the oral statements prior to and contemporaneous with these written contracts, in order to arrive at a correct interpretation of them wherever the meaning is doubtful; but when the proof shows, and it is admitted, that the declaration of trust was the final act, it is not competent for us to allow that, by any oral evidence, the plain letter of the written contract can be contradicted or changed; nor can we consider what may have occurred after the execution of the declaration of trust. But if the $ 400,000 be treated as purchase money, and the whole transaction treated as a conveyance to Stephens of the one-half of the mine, or of thirteen-eighteenths of it, yet such purchase could not result in a transfer of the title for any interest to Stephens until the purchase money had been paid back to him, or to those who furnished it through him. The buyer, according to the theory of appellant, was to have no title until all the purchase money which he had paid should be returned to him. That would be an anomalous proceeding, yet exactly what would have occurred if the transaction were a sale of the property to Stephens, and not a loan of money by him, or those acting through him; and, if the purchaser was to have to title until the purchase money was paid back to him, we are at a loss to see what was to be, or could be, the consideration for the transfer...