Dierks & Sons Lumber Co. v. Bruce

• Decision Date: 14 March 1922
• Docket Number: No. 22452.,22452.
• Citation: 239 S.W. 133
• Court: Missouri Supreme Court
• Parties: DIERKS & SONS LUMBER CO. v. BRUCE et al.

239 S.W. 133

DIERKS & SONS LUMBER CO. v. BRUCE et al.

No. 22452.

Supreme Court of Missouri, Division No. 1.

March 14, 1922.

Appeal from Circuit Court, Jackson County; Allen C. Southern, Judge.

Action by the Dierks & Sons Lumber Company against C. R. Bruce and others. From an adverse judgment on cross-petition of defendant C. R. Bruce against defendants Line Roos and C. O. Jones, said cross-petitioner appeals. Affirmed.

T. C. Sparks and Roland Hughes, both of Kansas City, for appellant.

J. Harold Olson and A. N. Gossett, both of Kansas City, for respondents.

RAGLAND, C.

This is a controversy between two defendants in an equitable action under the statute to enforce a mechanic's lien, in which other lienholders, and others having or claiming an interest in the property against which the lien was sought to be enforced, were made parties defendant.

There is no substantial controversy as to the controlling facts. Defendant Bruce was a contractor and builder; defendant Hogue was a promoter and speculator. Bruce conceived the idea of buying a certain lot of ground located at 39th and Washington streets, in Kansas City, and building apartment houses thereon with borrowed capital. Be found that the lot could be bought for $5,000 and that a cash payment of only $500 would be required. Not having the money with which to make this payment, or to get the contemplated buildings under such headway as to enable him to obtain a loan, he laid his scheme before defendant Hogue who consented to join him in the undertaking. They thereupon entered into an agreement, which, some two or three months later, was reduced to writing, as follows:

"This agreement, by and between W. J. Hogue and C. R. Bruce both of Kansas City, Mo., witnesseth:

"That the said W. J. Hogue agrees to finance the building of three (3) apartment houses containing about twelve (12) apartments each until loans may be secured. The amount furnished to approximate about fifteen hundred dollars ($1,500.00) to each building, and further agrees to pay the said C. R. Bruce three dollars ($3.00) per day as the work progresses and also agrees to give him one-third interest in whatever profits may be derived from said building. Said C. R. Bruce agrees to secure credit and buy lots and materials, superintend construction, and to use as little money as possible until loans may be secured; and to furnish copies of time books and contracts for file with the said W. J. Hogue and if required will manage said property, look after them in every way necessary, collect and report rents without charge except for the interest above mentioned.

"It is further agreed, that if the said W. Hogue should desire to sell or dispose of either of the above buildings and the price is not satisfactory to the said C. 2. Bruce, then in that event the said C. R. Bruce is to make a price which he would either give or take for the respective interests as above set forth.

"Witness, our hands at Kansas City, Mo., this 2d day of February, 1918."

Hogue furnished the money for the cash payment, and Bruce bought the lot and took the conveyance in the name of one Smith, who gave a deed of trust back on the property for $4,500 and then conveyed it subject to that incumbrance to Hogue.

This was done on or about November 19, 1917. Bruce immediately thereafter began the construction of two apartment houses on the lot. He paid for the labor and materials with the money furnished him from time to time by Hogue. After the buildings were fairly under headway, in order to obtain funds with which to complete them, both Bruce and Hogue tried to negotiate a loan on the property. These efforts were entirely fruitless. General conditions then prevailing in the financial world made it impossible for them to obtain a loan of anything like the sum they required. Hogue continued, however, to furnish money for the construction of the buildings until he had put $8,000 into the enterprise. He was then at the end of his resources so far as getting ready cash was concerned and work on the buildings stopped. He then tried to sell the property but was unable to get any substantial offer.

Hogue's funds were exhausted, and Bruce quit work on the buildings about the 1st of April, 1918. One of them was about completed and the other had reached "the plastering point." There was then outstanding an indebtedness of approximately $3,000 for labor and materials that had been furnished and which later took the form of liens against the property. After construction stopped, Bruce continued to look after the buildings and protected them from vandalism and from the effect of the weather, as best he could.

In a suit instituted against him by some of his creditors a receiver of Hogue's property was appointed by the District Court of the United States for the Western district of Missouri. On July 16, 1918, the receiver took possession of the property in controversy and held it until on or about May 31, 1919. On the latter date it was sold by the receiver at public sale, subject to all liens and incumbrances, for $1,000, and the defendant Jones became the purchaser. At the sale and before the property was struck off, Bruce announced that he claimed a one-third interest in the property and in that connection read the contract between him and Hogue, heretofore set out.

The receiver testified that, during the 18 months and more that the unfinished buildings were in his possession, he exerted his utmost endeavor to sell them at private sale at a price that would enable him to realize something like an approximation of what Hogue had put in them, but that he was not able to even interest any one in the proposition. During that time Bruce himself was industriously trying to get the creditors who were...