Hoppock v. Gaines

• Decision Date: 27 May 1926
• Docket Number: No. 3949.,3949.
• Parties: HOPPOCK v. GAINES et al.
• Court: Missouri Court of Appeals

284 S.W. 191

HOPPOCK v. GAINES et al.

No. 3949.

Springfield Court of Appeals. Missouri.

May 27, 1926.

Appeal from Circuit Court, Jasper County; S. W. Bates, Judge.

Action by A. G. Hoppock against A. M. Gaines and others. Judgment for defendants, and plaintiff appeals. Affirmed.

Norman A. Cox, of Joplin, and Bartley & Mayfield, of St. Louis, for appellant.

George J. Grayston and Charles M. Grayston, both of Joplin, for respondents.

COX, P. J.

Action by a former stockholder in a dissolved corporation to recover his proportionate part of alleged damages for breach of a contract entered into by defendants with the corporation before its dissolution. Trial by the court, who found for defendants, and plaintiff appealed.

The Defender Mining Company was a corporation organized under the laws of the state of Oklahoma. This corporation was the owner of a certain contract for a mining lease and defendants entered into a contract with the Defender Mining Company by which plaintiff alleges they bought this contract from the aforesaid corporation. Plaintiff then alleges a breach of said contract by defendants and, to show his right to maintain this action, alleges that he was a stockholder in said corporation, and that it had been voluntarily dissolved, and that with the knowledge and consent of defendants the corporation had assigned to each stockholder an interest in the assets of the corporation equal to his interest in the corporation as represented by the shares of stock owned by him. Plaintiff then alleges a breach of the contract made by defendants with the corporation and the damages resulting therefrom and asks to recover his pro rata part of that damage.

The defendants demurred to the petition on the ground of a defect of parties plaintiff and that no cause of action was stated. This demurrer was overruled. Defendants then answered with a general denial and a plea of a defect of parties plaintiff, in that all the parties in interest were not joined; that plaintiff was not the assignee of the entire obligation and the other assignees had not been joined; and that plaintiff was endeavoring to split the cause of action without the consent of defendants. The answer further alleged that it was not the intention of the parties to the contract to bind defendants personally, and that the alleged contract was a mere option with a provision for liquidated damages if the agreement for the purchase of the contract for the mining lease was not consummated by them. The reply was a general denial.

The evidence showed that a contract relating to the purchase of a certain contract for a mining lease was entered into between defendants and the Defender Mining Company, a corporation, and certain money was paid by defendants to such corporation at the time. Plaintiff contends that this contract was a contract of purchase which bound defendants to pay the agreed price to the corporation. Defendants contend the contract was only an option to purchase. This contract will be noticed at greater length later.

We shall first consider the question of the right of plaintiff to maintain a suit for damages for a breach of this contract, if it be construed as permitting a suit by any one for its breach. The contract was made with the Defender Mining Company, a corporation. There were 103 shareholders in this corporation. The assets of this corporation, including its interest in this contract with defendants, were assigned by the corporation to its shareholders, each a separate interest. The corporation then dissolved and went out of existence. Defendants contend, and the trial court so held, that plaintiff could not, alone, maintain a suit for breach of the contract because he only owned an aliquot part thereof. Plaintiff was not the assignee of the entire contract, and the court found that defendants' had not agreed and consented that the corporation with whom they dealt should, by assignment, split up their obligation under the contract and require them to answer to 103 parties instead of to only one. Plaintiff contends that defendants waived the right to take advantage of a defect of parties plaintiff by answering over after their demurrer to the petition was overruled. That position would be sound if the facts appeared on the face of the petition, but in this case plaintiff alleged in his petition that the transfer from the corporation to him and other shareholders was made "with the knowledge and consent, ratification, acquiescence, and acceptance of all of defendants." Since the petition made that allegation it was not demurrable on the ground of a defect of parties plaintiff, and defendants could only raise that issue by answer. They did not therefore waive any right by answering over. The burden was on plaintiff to show that defendants had agreed to the assignment from the corporation to its shareholders in such a way as to convert their single obligation to the corporation into a number of obligations to the, different shareholders. The court found against plaintiff on that issue. This, of course, did not take from the corporation the right to make the assignment. It could assign its interest in the contract to as many different parties as it saw fit and those parties could hold as tenants in common or as joint tenants. Such action on the part of the corporation, acting without the assent of defendants, could not, however, split the cause of action and authorize a multitude of suits where only one right of action had previously existed. Stat. 1919, § 1159; Dewey v. Carey, 60 Mo. 224; Muldrow v. M., K. & T. Ry. Co., 62 Mo. App. 431; White v. Dyer, 81 Mo. App. 643; Seay v. Sanders, 88 Mo. Apo. 478;, Lemon v. Wheeler, 96 Mo. App. 651, 70 S. W. 924; North St. Louis Planing Mill Co. v. Essex et al., 157 Mo. App. 18, 29, 137 S. W. 295.

It is our conclusion that plaintiff could not maintain this action without joining the other assignees of the contract as plaintiffs with him, or, if they would not join as plaintiffs, he should have made them defendants as the statute cited provides may be done.

The trial court also found that the contract between defendants and the Defender Mining Company "was a mere option, and that the remedy of the first party in said contract, or its legal successors, is to declare a forfeiture of said contract in the manner provided therein and to accept the liquidated damages as therein provided." This is not, strictly speaking, a finding of facts, but is really a declaration of law showing the court's view as to a proper construction of the contract. The terms of the contract,. as far as we deem them pertinent here, are in substance as follows. The mining company is described as the first party and defendants as the second party. It recites that the first party is the owner of a certain contract for a mining lease on certain lands, describing them, and that first party had partially developed the land, and were proceeding to erect a concentrating plant and mill thereon, and that defendants were desirous of purchasing the same. The first party, in consideration of the promises and covenants thereinafter made by the second party, agreed to sell and assign said contract for lease and equipment thereon for the sum of $200,000, plus the amount already expended by first party, to wit, $12,132.27, the first party to execute a formal assignment and bill of sale of said contract for mining lease and plant and equipment thereon and place the same with the cashier of the First National Bank of Miami, Okl., to be disposed of by him as further provided. The $12,132.27 was paid at the time the contract was executed.

The following is a part of the contract:

"The terms of this option or agreement for sale are as follows: The consideration of two hundred thousand ($200,000.00) dollars and of twelve thousand one hundred thirty-two & 71/100 ($12,132.71) dollars to be paid for the plant and equipment as mentioned above shall be paid in installments as.follows:

"The consideration of $12,132.71 for plant and equipment is paid in cash this date, the receipt of which is hereby acknowledged, and the remaining purchase price of $200,000.00 shall be due and payable in installments of fifty thousand dollars ($50,000.00) each, beginning on the first day of January of each year following, beginning with the first payment as of January 1, 1920; and each of said installments shall draw interest at the rate of 6 per cent. per annum from the date of this contract until paid; and the interest on the deferred payments shall be due and payable on the first day of January each year hereafter until the whole obligation is fully met and paid.

"The second parties shall and they hereby agree to immediately take possession of the above-described lands and proceed with dispatch to complete the erection of the mill and concentrating plant and place same to the point of production as speedily as same can be reasonably done, and to in every particular comply with the requirements...