Jones v. Perot

• Decision Date: 30 October 1893
• Citation: 34 P. 728,19 Colo. 141
• Parties: JONES v. PEROT et al.
• Court: Colorado Supreme Court

34 P. 728

19 Colo. 141

JONES v. PEROT et al.

Supreme Court of Colorado

October 30, 1893

Error to district court, Arapahoe county.

Action for breach of contract by T. Morris Perot, W. Henry Sutton and others against James A. Jones, administrator of the estate of Isaac Cooper, deceased. Plaintiffs had judgment and defendant brings error. Reversed.

The other facts fully appear in the following statement by HAYT C.J.:

For the first cause of action, defendants in error, as plaintiffs below, allege that on January 28, 1882, plaintiffs and others were the owners of certain Roaring Fork Improvement Company bonds, and that said parties entered into a written agreement with Isaac Cooper with reference thereto, setting forth the instrument in haec verba. So far as the provisions of the agreement are necessary to a correct understanding of the present controversy, they are as follows: Cooper agrees to forthwith organize, and cause to be incorporated, a company to be called the 'Pearl Mining Company,' on the basis of $5,000,000 capital, divided into 500,000 shares at a par value of $10 each, of which 117,000 shares are to be reserved in the treasury of the company as working capital, to cover expenses of beginning and carrying on the operations of the company; the said Cooper further agreeing to convey to said company certain mining claims located in Pitkin and Gunnison counties, Colo. The agreement further witnesses that said parties of the second part, in consideration of the premises agree to deposit with the Guarantee Trust & Safe-Deposit Company of Philadelphia cash to the amount of 50 per cent. of the par value of their respective holdings of bonds of the Roaring Fork Improvement company, to be held by said company until H. P. Bennet, Esq., of Denver, Colo., shall have passed the title of the said Cooper to the aforesaid mining claims and upon such passing of title, and conveying of same by Cooper to said Pearl Mining Company, said parties of the second part agree to exchange with Cooper said Roaring Fork Improvement Company's bonds, with accrued interest thereon to January 1, 1882, and cash deposited as aforesaid with said Guarantee Company, for stock in the said Pearl Mining Company, upon which a dividend of three cents per share per annum shall be guarantied, as hereinafter set forth. Upon consummation of said exchange, the said parties of the second part agree to surrender to Cooper all the stock of said Roaring Fork Improvement Company received as bonus for the bonds so exchanged, and to release and pay over to him said cash deposited with the Guarantee Company. In consideration of the premises, Cooper agrees to exchange the stock of the Pearl Mining Company for the stock and bonds of the Roaring Fork Improvement Company, with accrued interest thereon to January 1, 1882, and cash as above set forth, and promises to pay a dividend of three cents per share per annum in cash from February 1, 1882, upon such stock as shall be thus exchanged for bonds or cash; Cooper to deposit as collateral security for the payment of said dividend, as aforesaid, all the stock and bonds received by him. It is further agreed that upon default of Cooper to pay the whole of said dividend, as aforesaid, upon all stock exchanged for bonds with accrued interest or cash as aforesaid, then recourse may be had by the parties of the second part '(1) to the enforcement of the sale of collateral security, and of the penalty, as in manner provided; (2) to the said Isaac Cooper, whose individual liability to pay said dividend as aforesaid, it is distinctly understood, shall extend only to that portion of said stock which has been exchanged by him for cash as aforesaid.' This dividend to be paid until 60 cents per share in cash shall be tendered by him for all stock upon which a dividend is guarantied. It is further agreed that said Cooper is to maintain the organization of the Roaring Fork Improvement Company, and to obtain title to the Aspen town site through the Aspen Town &amp Land Company. A transfer from certain parties interested in the contract to the plaintiffs in this case, including W. Henry Sutton, is alleged, and also the organization of the Pearl Mining Company as provided, and that the title to the mining property mentioned was duly passed by H. P. Bennet, Esq., and the deeds conveying the same executed and delivered to the Pearl Mining Company, in pursuance of said agreement. It is further alleged that plaintiffs exchanged with said Cooper said stock and bonds of the Roaring Fork Improvement Company held by them, and deposited with the Guarantee Trust & Safe-Deposit Company of Philadelphia $22,500 in cash, which was half of plaintiffs' holdings of the bonds of said Roaring Fork Improvement Company, and received in exchange therefor, from said Cooper, stock in the Pearl Mining Company to the amount of 112,705 shares; that 37,500 of said shares represents the $22,500 in cash, on which shares Cooper was, by the terms of his contract, required to pay annually a dividend of 3 cents per share from the 1st day of February, 1882, up to the time of bringing the suit. It is further alleged that no part of said dividend has been paid. The sale of the collateral security is alleged to have been made in manner provided, realizing the sum of $660. For the second cause of action, it is alleged that on or about the 15th day of August, 1882, at Philadelphia, in the state of Pennsylvania, plaintiffs loaned to said Isaac Cooper, at his special instance and request, the sum of $4,000 which said sum Cooper was to repay to plaintiffs within a reasonable time, with interest at the rate of 6 per cent. per annum from the time of said loan until the same was repaid; that the reasonable time in which said Cooper agreed to pay said money expired on the 1st day of January, 1883; and that neither said Cooper, in his lifetime, nor the said defendant since his death, has paid plaintiffs any part of said sum. The amended answer to this complaint, upon which answer the action was tried, admits death of Isaac Cooper, and the appointment of the defendant as administrator; admits organization of the Pearl Mining Company, and its acquisition of title, as described in the complaint; admits that Isaac Cooper transferred to plaintiffs 131,166 2/3 shares of stock of the Pearl Mining Company, but denies that 41,666 2/3 shares thereof represent the amount of said stock exchanged for cash, for which dividends were guarantied; admits sale of the collateral security for...