Diamond Creek Consol. Gold & Silver Mining Co. v. Swope
| Decision Date | 14 May 1907 |
| Citation | 102 S.W. 561,204 Mo. 48 |
| Court | Missouri Supreme Court |
| Parties | DIAMOND CREEK CONSOL. GOLD & SILVER MINING CO. v. SWOPE. |
H. made a contract of purchase of plaintiff of mining lands and personal property thereon. H. and defendant made a contract reciting that H. contemplated the purchase of the mining property, and was desirous of borrowing $25,000, and that defendant had agreed to loan it to him on the note of himself and others; that it should be paid to H. in certain amounts, at certain times; that, if H. did not make the purchase, he should at once return the money; that, if he did make it, he should take the title in his own name, and should execute a declaration of trust conveying to defendant a fourth interest in the land, as a bonus for making the loan; that, if H. should make the purchase, he should have the exclusive control and management of the land and the working thereof; and that the liability of the makers of the note did not in any wise depend on the contract or the success of the mining operations, but was fixed by the terms of the note. Held, that no partnership
was created between H. and defendant by this contract, so as to make defendant liable to plaintiff for the breach by H. of his contract of purchase.
Appeal from Circuit Court, Jackson County; A. F. Evans, Judge.
Action by the Diamond Creek Consolidated Gold & Silver Mining Company against Thomas H. Swope. Judgment for defendant. Plaintiff appeals. Affirmed.
Grant I. Rosenzweig and G. W. Baker, for appellant. C. O. Tichenor, for respondent.
This is an appeal from a judgment on demurrer in favor of defendant by the circuit court of Jackson county. Without repeating the formal language of the petition, it suffices to say that it avers:
That plaintiff is a corporation, and upon November 28, 1893, was the owner and in possession of a certain mining property in California known as the "Eagle Bird Mine," comprising real estate, hoisting works, stamp mill, and other improvements; the same being free and clear of all liens and charges. Loupe and Frank were the chief stockholders of the Diamond Creek Company, owning practically all of the stock. At that time Howard appeared upon the scene, and a contract was entered into in writing between Howard on the one side and on the other side the Diamond Creek Company, Loupe, and Frank, wherein it was agreed (by way of carrying out a sale of the mining property to Howard) as follows: Deeds and bills of sale in favor of Howard covering all the real and personal property of the Diamond Creek Company were to be executed and placed in escrow in the hands of the American Bank, together with all the corporation shares duly assigned. Howard was to pay $10,000 cash at the time the conveyances were placed in escrow. Howard was to go into the immediate possession of all the mining property, carrying on development and mining work upon the same in a reasonable and proper manner, without any expense to the Diamond Creek Company, Loupe, or Frank, and was to keep track of the ore taken from the mine, and was to place in the hands of the American Bank for the benefit of the Diamond Creek Company, Loupe, and Frank one-half of the net profits derived from the working of the mine, until the sum so deposited should amount to $20,000 (in addition to the $10,000), at which time Howard should be entitled to receive from the American Bank the full title. Howard further agreed until full payment of the deferred $20,000 he would not suffer the mining premises to be incumbered by any debts or liens for labor or material of any kind or character whatsoever, and would pay all such debts at maturity, to the end that, in case he should fail to make the deferred payments, all property should be returned to the sellers free and clear of all and every incumbrance made or suffered by or through Howard. In case Howard should cease operations for 60 days (except for fires, strikes, or unavoidable casualty), the agreement should be terminated and Howard's right to purchase the property should cease, and all the conveyances, etc., placed in escrow should be returned to the Diamond Creek Company, Loupe, and Frank. In case all the payments above mentioned are made by Howard, or whenever he pays the said $20,000, he is to have all documents of title from the American Bank. The agreement was signed by Diamond Creek Company, Loupe, Frank, and Howard. The conveyances aforesaid were executed and placed in the hands of the American Bank, and Howard was placed in immediate possession and control of all the real and personal property, machinery, etc., and the sellers fully performed in every way. The first payment of $10,000 was made by Howard and also an additional sum of $600, but nothing further. Howard continued in possession of the mining property from November, 1893, until July, 1896, working and operating the mine. But Howard and Swope, Swope being the principal and partner of Howard as hereinafter more fully recited, committed a breach of the contract, in that they did not carry on the development of the mine in a reasonable and proper manner without expense to the sellers, and did not render statements of the operations, and did not place in the hands of the American Bank one-half of the net profits, and did not continue the operations and did not pay over any proceeds, and did suffer the mining property to be incumbered by debts and liens for labor and material incurred during the time that Howard and Swope were in possession of the premises, and did not pay and discharge all debts, to the end that the property should be returned to this plaintiff free and clear of incumbrance made and suffered by Howard and Swope in case they should fail to make the deferred payments provided for. On the contrary, while Howard and Swope were in possession and were developing the property, they employed upon the same a large number of miners, etc., and about July 1, 1906, Howard and Swope abandoned the property without cause or excuse, and about that date the Diamond Creek Company recovered possession of its property. But at that time of abandonment Howard and Swope were indebted to their miners and workmen in a sum aggregating $6,471.80 for work done while they were in possession and operating, for which sum, in accordance with the laws of California, the miners and workmen were entitled to miners' liens upon the property; that the miners accordingly within 30 days after suspension of work filed their miners' liens against the property, which liens were a valid and subsisting claim against the property of this plaintiff. And these lien claims, in the proper court of California having jurisdiction, were duly foreclosed and carried to a judgment of lien against the property, which lien the Diamond Creek Company to the amount aforesaid was obliged to pay and did pay to save its property from utter loss, which liens and judgment bore interest at 7 per cent. Whereby there became due to this plaintiff $6,471.80, with 7 per cent. thereon from July 1, 1896. That out of the operation of the mine under Howard there was in fact realized a net profit of $2,400, of which $1,200 (being the half) should have been paid to plaintiff, but Howard only paid $600, leaving $600 unpaid and due on that account with interest from July 1, 1896. That by reason aforesaid plaintiff has been damaged in the total sum of $7,071.80, with interest from July 1, 1896, which was demanded upon July 2, 1896, but has never been paid. That in all the foregoing proceedings Howard acted in his individual name, but the fact in reality was that upon November 14, 1893, there had been executed between Swope and Howard a contract as follows:
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