HIGBEE, C.
The plaintiff, a building contractor, sued the six defendants on a contract to indemnify him for any loss he might sustain by the waiver of his right to file a mechanic's lien on a building he had contracted to erect for the Lona. Theater Company of Sedalia. The plaintiff appeals from a judgment for the defendants.
The defendants and others, in the year 1919, organized a corporation with an authorized capital stock of $75,000, known as the Lona Theater Company, for the purpose of erecting a theater building. Plaintiff contracted verbally with the company to put up the building according to its plans and specifications for the cost of the labor and materials, plus 10 per cent. profit. He estimated the cost of the labor and material at $45,000. After, the work had proceeded a few weeks, he informed the company the cost would be $85,000. Prices of materials were mounting upwards, and he later told the company the cost would be $101,000. The building committee then realized the folly of undertaking to build without first sitting down and counting the cost to see if they had sufficient to finish it. Luke, 14:28. They told plaintiff they must have a definite contract as to the cost of the building. He revised his estimate and told them the building would cost $113,531, including his 10 per cent. profit.
The financial arrangements up to this time had been as follows: The company had paid plaintiff the proceeds of the sale of the company's stock, amounting to about $49,000. Then a loan became necessary, and Johnson and Brill, the secretary of the company, pursuant to a resolution of the board of directors, undertook to negotiate a loan from Grant Crawford. Before this could be concluded, Johnson induced the company to borrow $3,500 from the Citizens' National Bank, which was paid to Johnson, and it was understood this loan would be repaid to the bank when the Crawford loan was made. Crawford agreed to make the theater company a loan of $30,000 in installments of $10,000 each; the loan to be secured by a mortgage on the theater building and lot, which was clear of incumbrances. This was in March, 1920. Crawford let the company have $10,000, which was paid to Johnson on March 16. He let the company have another $10,000, $7,500 of which was paid to Johnson and $2,500 was paid on the bank loan of $3,500. An April 20, Crawford let the company have the last installment of $10,000, and it was also paid to Johnson. Thus Johnson rereceived the entire Crawford loan.
As the building progressed, Johnson required more money. Crawford could not extend further aid, and the company could make no other loan unless Johnson would waive his right to a mechanic's lien, and would definitely fix the cost of the building. The result was that Johnson, who held 50 shares of stock in the company, and fifteen other stockholders and the Lona Transfer Company, executed the contract, which was written by the plaintiff, and is the basis of this suit. It reads:
"Agreement
"This agreement, made and entered into this the 21st day of May, 1920, by and between T. H. Johnson, party of the first part and hereinafter designated the contractor, and the other persons who are stockholders in the Lona Theater Company of Sedalia, Mo., and the board of directors of the Lona Theater Company of Sedalia, Mo., parties of the second part, witnesseth:
"That whereas, the said T. H. Johnson, now engaged in erecting of the Lona Theater Building in Sedalia, Mo., at the request of the undersigned and also the board of directors did waive to the Farm & Home Savings & Loan Association of Missouri, his right to a mechanic's lien, for materials and labor furnished and to be furnished by him for the construction of said building, which said waiver was made as a result of a promise that we would protect and indemnify him up to a certain agreed sum from all loss on account of such waiver; it being understood that said waiver was signed by said contractor for the purpose of the board of directors of the Lona Theater Company procuring a loan in the sum of sixty ($60,000.00) thousand dollars from the Farm & Home Savings & Loan Association of Missouri.
"It is therefore understood and agreed by and between the parties hereto that the said contractor, in consideration of the covenants and agreements of the other parties hereto as hereinafter set forth, do hereby covenant and agree to pay the labor and material bills for said building, and, in consideration of the said contractor paying the labor and material bills for said building, the board of directors agree to pay to the contractor the money procured from the loan made by the Farm & Home Savings & Loan Association of Missouri in such amounts and at such times as the party of the first part requests and will produce to the party of the second part receipted bills for materials and labor, provided, however, that such payments will not be made only at the first of each month following the date of this contract.
"It is understood by and between the parties to this contract that the party of the first part guarantees that the labor and material bills, all fees, commissions, and contractor's percentage entering into the construction of the new Lona Theater Building will not exceed the sum of $112,531, based upon estimate furnished by party of the first part to party of the second part under date of May 6th, 1920, plus $1,000.00 for incidentals and contingencies.
"Now, in consideration of the agreements of party of the first part herein contained, we, the parties of the second part (stockholders) whose signatures are hereto affixed, do agree to indemnify the party of the first part against any loss, which he may sustain as a result of waiving his right to a mechanic's lien as set forth above. It being understood, however, that we guarantee such loss to the party of the first part in such sums only as are set
opposite our names, as they appear below; the amounts set opposite our names being the amount of stock held by each of us whose signatures appear.
"It is also understood that the party of the first part is a stockholder in the Lona Theater Company and his name appears below, guaranteeing any loss which may occur in the sum of $5,000. However, it is specially understood and agreed by the parties to this contract that the party of the first part is in no wise to lose all of the $5,000, or any other amount of loss, which might be sustained as a reason for his signing this agreement, but that all parties who have signed this agreement will pay any loss that may be sustained pro rata, according to the amounts set opposite their names which appear here below."
This contract was signed by T. H. Johnson and fifteen other stockholders, the sixteen holding 232½ shares of stock of the par value of $23,250, and by the Lona Theater Company. We adopt the respondents' summary of the pleadings:
"The petition alleges that the Lona Theater Company had employed Johnson to erect a theater building for a sum of money equal to all the amounts spent by him for labor and material and 10 per cent. thereof, which shall be for profit, and at that time the Lona Theater Company owned a lot upon which the building was being constructed, free of incumbrance; that Johnson would have been entitled to a lien upon the land and building for labor and materials furnished by him, but that before the building was completed the Lona Theater desired to borrow money, and for that purpose to place a deed of trust upon the real estate and building, and, in order to borrow such money, the Lona Theater Company wanted the plaintiff to waive his mechanic's lien, and that Johnson and certain stockholders of the Lona Theater Company and the Lona Theater Company entered into a written agreement. * * * which has just been set out in this statement.
"The petition further states that Johnson completed his contract and took no steps to perfect his mechanic's lien, and that the cost of labor and materials and Johnson's compensation amounted to more than $113,531, of which the company had paid him $91,419; that Johnson has settled with all of the other parties to the contract excepting the defendants; that the value of the real estate and the building was $73,000 and that therefore the value of plaintiff's right to a mechanic's lien was $73,000, which he lost by waiving his mechanic's lien under the contract, and that on account of Johnson's personal guaranty he did not have a `right to hold the other guarantors for more than $73,000, minus $5,000, which is $68,000; that the amount guaranteed by all the parties other than the plaintiff was $18,250, the total of said guarantees being $23,250.
"The petition further alleges that, by the terms of the contract, the board of directors agreed to pay Johnson `the money procured from the loan' made by the Farm & Home Savings & Loan Association in such amounts and at such times as the plaintiff might require, provided that the payments were only to be made on the first of each month following the date of the contract. * * *
"The original petition alleged that the Lona Theater Company was a party to the contract and that it did borrow $60,000 from the loan association, `$30,000 of which had to be applied upon a loan already secured by the same property, but $30,000 of said loan constituted a trust fund which the board of directors held in trust for the plaintiff and which they had no right to pay out for any other purpose except under such a...
