Falder v. Dreckshage

• Decision Date: 08 February 1921
• Docket Number: No. 16237.,16237.
• Citation: 227 S.W. 929
• Parties: PALDER v. DRECKSHAGE et al.
• Court: Missouri Court of Appeals

227 S.W. 929

PALDER v. DRECKSHAGE et al.

No. 16237.

St. Louis Court of Appeals. Missouri.

February 8, 1921.

Rehearing Denied February 24, 1921.

Appeal from St. Louis Circuit Court; Thomas C. Hennings, Judge.

"Not to be officially published."

Suit by Simon N. Falder against Charles Dreckshage and another. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

Cornwell, Hicks & Gary, of St. Louis, for appellants.

Wm. L. Bohnenkamp, of St. Louis (James T. Roberts, of St. Louis, of counsel), for respondent.

ALLEN, J.

This is a suit by which plaintiff seeks to compel the defendants to specifically perform a contract alleged to have been entered into by them with plaintiff. The trial judge, sitting as a chancellor, found that plaintiff was entitled to have the contract in suit specifically performed, but found that specific performance thereof had become impracticable, and consequently, in lieu thereof, awarded plaintiff damages in the sum of $5,100. From a judgment rendered accordingly, defendants prosecute this appeal.

Owing to the nature of the case and the questions involved, it will be necessary to set out, in substance at least, the pleadings.

The petition alleges that prior to August 7, 1915, the defendants, husband and wife, held a mortgage upon the property, real and personal, of the Elk Mountain Mines & Tunnel Company, a corporation, said property being located in the Elk Mountain mining district of Gunnison county, Colo.; describing the real property as consisting of certain mining claims, mill sites, etc., and the personal property as comprising about 14,000 pounds of powder, with fuse and caps, a compressor, water wheels, drills, electric light equipment, tools, furniture, utensils and supplies, rails, cars, fans, and other equipment, located on the mining property mentioned.

And it is alleged that prior to August 7, 1915, defendants had proceeded to foreclose their said mortgage for the nonpayment of the debt thereby secured; that such foreclosure sale had been duly had on May 11, 1915, by the sheriff of Gunnison county, Colo., at which sale defendants were the purchasers of all of the aforesaid property, taking title thereto, under the laws of Colorado, subject only to the right of the stockholders of the Elk Mines & Tunnel Company to redeem the property within nine months from May 11, 1915, which period expired February 12, 1916.

And it is alleged that on or about the day of said foreclosure sale, to wit, May 11, 1915, the defendants "being desirous on their part, and fully intending to develop the mines and vein matter, now located on said property, in the event that they should finally become the absolute owners of said property, mines and vein matter as aforesaid, and, in order to do so in the least possible time and to the very best advantage, and being desirous of obtaining and having the aid, assistance and experience of plaintiff, S. N. Falder, of the city of St. Louis, Mo., in financing, developing and operating the mines, tunnels and vein matter located on said properties, and knowing and believing him, the said Falder, to be possessed of the ability and experience to do said work and to have had long connection with and extended knowledge of the said properties, an agreement was made on or about said 11th day of May, 1915," between plaintiff and defendants, whereby it was recited that defendants had foreclosed their said mortgage on the property mentioned, that a foreclosure sale thereof had been had as aforesaid, that defendants had bought in the property at such sale, and that they were desirous of securing the aid and assistance of plaintiff "to finance, develop and operate said mine, located on said property." And it is alleged that by said contract it was agreed "that in order to carry out said plan of financing and developing said property," defendants agreed with plaintiff to form a corporation with a capital stock of $4,000,000 to develop said mines and property; that of the capital stock of said proposed corporation, 51 per cent. was to be issued to plaintiff and defendants; that defendants were to have one-half of said 51 per cent. of the stock of said corporation, and plaintiff the remaining one-half thereof, "that is to say, Charles and Ellen Dreckshage were to have 1,020,000 shares of the capital stock of said proposed company and the said S. N. Falder was to have 1,020,000 shares" thereof; that defendant Charles Dreckshage would, on his part, devote his time to superintending the work to be done at and about the property; that the expense of developing the mines and property would be paid out of the funds collected from the sale of the treasury stock of said proposed corporation ; that plaintiff on his part was to devote his time to financing the proposed corporation, and to do all of the "office work and the general business" thereof; and that all expenses "made necessary in selling said stock, raising money and keeping and maintaining" plaintiff and his office, were to be paid from the funds to be collected from the proceeds of the sale of the treasury stock of the proposed company.

The petition then states the substance or the further provisions of this contract, as follows:

"It was further provided that any moneys that Charles and Ellen Dreckshage had advanced since the foreclosure proceeding was to be paid back to the said Charles and Ellen Dreckshage out of the funds received from the sale of the treasury stock.

"It was further agreed that any and all obligations contracted by S. N. Falder in financing said property should be paid out of the sale of said treasury stock.

"It was further agreed that if it should become necessary, in order to raise money to develop said property, to give a stock bonus, that Charles and Ellen Dreckshage and S. N. Falder would contribute equal shares of their private holdings.

"It was further agreed that as the stockholders of the Elk Mountain Mines & Tunnel Company would have nine months from the 11th day of May, 1915, or until February 12, 1916, in which to redeem the said property so bought in as aforesaid by Charles and Ellen Dreckshage, that in the event the stockholders of the Elk Mountain Mines & Tunnel Company did not so redeem said property within said statutory period and the said property and mines became the absolute property of the said Charles and Ellen Dreckshage, that Charles and Ellen Dreckshage would at once, upon the expiration of said period of redemption, transfer said property so obtained by foreclosure and sheriff's sale to the proposed new corporation, to be organized as aforesaid."

Plaintiff then alleges that in pursuance of the contract, and upon request of defendants, and "for the purpose of assisting in hastening the work, management and development of said property," plaintiff advanced and paid to defendant Charles Dreckshage, in cash, $350; and after the making of said contract, and in pursuance thereof, and at the request of defendants, plaintiff "proceeded to sell and did sell a large amount of stock of said proposed; corporation, with the understanding and agreement that as soon as said proposed corporation was formed stock would be issued to such purchasers, who, in the meantime, held interim receipts showing the amount of their purchases and the amounts paid on account of said purchases"; and that the proceeds of such sales of stock were paid to defendant Charles Dreckshage and used in developing the property aforesaid; "and that this plaintiff in all things fully performed and carried out his part of said agreement."

And it is alleged that the contract between the parties was, on August 7, 1915, reduced to writing, and was signed by defendant Ellen Dreckshage, but that defendant Charles Dreckshage, though he had agreed to sign the same on many days between May 1, 1915, and August 7, 1915, and many times thereafter, has failed and neglected to do so.

The petition further alleges that the statutory period of redemption, mentioned above, had expired, whereby title to the aforesaid property had become complete in the defendants; that under the provisions of the contract "it became the duty of all parties thereto, including this plaintiff, to proceed at once to form said new corporation, issue and distribute the stock thereof as provided therein, and proceed to operate and develop said mining property as therein provided and required." And it is alleged that on or about February 12, 1916, plaintiff, in pursuance of the contract, organized a corporation under the laws of the state of Arizona known as the Amalgamated Mines & Tunnel Company, having a capital stock of $4,000,000, divided into 4,000,000 shares of the par value of $1 each, and that 51 per cent. of the capital stock of said corporation had been issued as provided in said contract between plaintiff and defendants, viz., 1,020,000 shares to defendants, and 1,020,000 shares to plaintiff. And it is averred that "said stock is ready for delivery to said parties when the terms of said agreement, relating to the transfer of said property to said corporation, have been complied with."

And it is alleged that notwithstanding that the title to the property has become absolute in defendants, and though plaintiff has often demanded of them that they transfer the same to said Amalgamated Mines & Tunnel Company, and proceed with the work of operating and developing the properties, as provided in the contract, defendants have failed, neglected, and refused so to do.

Plaintiff further alleges that "he has been at all times ready and willing, and is now ready and willing, to comply with the terms of said contract and agreement, and has performed all of the conditions of the same required and demanded of him therein, and is still ready and willing to do so"; but that defendants have failed, refused, and neglected to comply with the terms thereof, and still refuse so to do. And it is alleged that if defendants "continue to fail,...