Clark v. Ducheneau

• Decision Date: 29 April 1903
• Docket Number: 1421
• Citation: 72 P. 331,26 Utah 97
• Court: Utah Supreme Court
• Parties: WILLIAM A. CLARK, Appellant, v. CAJETAIN DUCHENEAU and JOHN J. CORTEZ, Respondents

72 P. 331

26 Utah 97

WILLIAM A. CLARK, Appellant, v. CAJETAIN DUCHENEAU and JOHN J. CORTEZ, Respondents

No. 1421

Supreme Court of Utah

April 29, 1903

Appeal from the Second District Court, Weber County.--Hon. H. H Rolapp, Judge.

Action on a promissory note. From a judgment in favor of the defendant Cortez, the plaintiff appealed.

AFFIRMED.

Thomas Maloney, Esq., for appellant.

John E Bagley, Esq., for respondent Cortez.

BARTCH J., delivered the opinion of the court. BASKIN, C. J., and McCARTY, J., concur.

OPINION

BARTCH, J.

STATEMENT OF FACTS.

This is an action on a promissory note which was executed by the defendants to the plaintiff. The complaint is in the ordinary form of one on a note, and demands judgment for $ 2,500 principal, and for interest and attorney's fee. The defendant Ducheneau filed no answer. Defendant Cortez filed a separate answer, and, admitting the execution of the note, averred that it was executed and delivered to plaintiff upon an agreement that it should be held as a pledge of assurance and security for the performance of a certain contract; that such contract has been fully performed, and the note thereby settled and satisfied; that on and previous to the date of the execution of the note this defendant was an officer of the Black Butte Mining Company, a corporation owning a coal mine, and engaged in the business of mining and selling coal, the capital stock of which corporation consisted of 1,000 shares of the par value of $ 100 per share, of which this defendant owned 565 shares; that on or about July 11, 1898, the date of the note, the contract above mentioned was made, the plaintiff agreeing with both of the defendants to purchase 500 shares of the stock, provided that all of the indebtedness of the company would be paid and canceled, and that he would furnish $ 2,500 to cancel the indebtedness and pay for the stock; that, in consideration of this agreement on the part of the plaintiff, the defendants agreed to pay, or cause to be paid, all the indebtedness of the company, amounting to $ 1,236.95, and to cause to be sold and transferred to him, or his agent, the defendant Ducheneau, the 500 shares of stock; that it was further agreed that the plaintiff would pay the $ 2,500 in advance to enable the defendants, who were without money, to pay the indebtedness and purchase the 500 shares of stock for him, and that, to secure the money so to be advanced, the defendant Ducheneau was to execute the note sued on, and this defendant was to sign the same as surety; that thereafter, on July 11, 1898, in pursuance of such agreement, the note was so executed and signed, with the further agreement that it would be cancelled, and this defendant released from all obligations thereon, upon the performance of the contract, and thereupon the same was delivered as a pledge, as aforesaid; that then the money was paid over to defendant Ducheneau, as the agent of the plaintiff to carry out the contract; that the indebtedness was then discharged, and thereafter the 500 shares of stock purchased, transferred and delivered to the plaintiff; that thereby the contract was fully performed and the note paid; and that this defendant is entitled to be released from further obligations on the note.

As to the existence of the alleged verbal contract the evidence is conflicting. That of the plaintiff is to the effect that the $ 2,500 advanced constituted a loan, evidenced by the note, and that the 500 shares of stock were received by the payee and held as security for the loan.

Respecting the alleged agreement and the purchase of the stock, the plaintiff in his deposition stated: "I did not on or about July 11, 1898, or at any other time, either bargain for or purchase an interest in the Black Butte Coal Mining Company. I never bought any shares of the stock of the company mentioned, nor made any contract for their purchase. I held 498 shares of the stock. I hold said stock as security for the payment of the note herein sued upon and all advances made to the company." He further stated that he would surrender the stock upon payment of the note sued upon and all advances made.

The testimony of the defense as to this stock transaction is to the effect that there was such an oral contract; that the 500 shares of stock constituted a purchase; that the note was delivered and held as collateral, to be cancelled, as paid and satisfied, upon the performance of the agreement; and that the agreement was fully performed.

The witness Cortez in his own behalf, among other things, testified: "I went to Butte, Montana, to negotiate with Mr. Clark in regard to him purchasing or securing for him 500 shares of the Black Butte Coal Mining Company. I says to him: 'Mr. Clark, I don't want to sell no mine; only to send an expert up there and have it examined.' 'No,' he said, 'that's not necessary. I think you are an honest looking man. I have seen you before, I believe'--and then asked me how much money it would take to purchase a half interest; he would have nothing but a half interest--nothing less. I told him. 'Well,' he says (the substance is), 'Mr. Ducheneau is a friend of mine, but I don't like to have the money sent to Ogden, not knowing absolutely that the money would be used for the purchase of that stock and paying the debts on the mine. Then, of course, I will hold you responsible, and see that the money is used for no other purpose than to secure a half interest of that stock.' I said: 'Now, Mr. Clark, I don't like to be obligated on a note to pay for that stock. I want it understood that when I secure half of that stock, and deliver it to Ducheneau, my obligation on the note will cease.' Mr. Clark says: 'Certainly; that's the way I understand it.'" The witness further stated: "Finally I got 500 shares of this company's stock, and delivered it to Ducheneau, who delivered it to Mr. W. A. Clark. This about the 5th or 6th of November, 1898, at Butte, Montana, in Thompson's office. Thompson, Ducheneau, Clark and I were present. Mr. Clark said: 'I don't want it this way. I want the stock transferred in my name, 499 shares, and one share to my cashier's name, N. J. Johnson, because he will attend to the business for me.' He ordered Thompson to transfer and make the stock in his (Clark's) name and one share to Johnson." He also testified that he had the same understanding with Ducheneau when the note was signed, and in a letter dated December 7, 1898, which the witness wrote to the plaintiff, he in part said: "The understanding between Mr. Ducheneau and I was that my part of the indebtedness should be cancelled, providing I could secure the half of the stock, and it was further understood that my obligation would cease on the note as soon as I have delivered the 500 shares. I have fulfilled my part of the bargain to a letter, and saved over $ 500 to Mr. Ducheneau besides, and therefore I consider that I ought not be held any more, as the stock is in the possession of Mr. Ducheneau and yourselves, and surely you will not want me to pay for it, after getting it--the mine--in full operation."

The...