Maginn v. Lancaster.

• Citation: 73 S.W. 368,100 Mo. App. 116
• Parties: MAGINN v. LANCASTER.
• Decision Date: 17 March 1903
• Court: Missouri Court of Appeals

73 S.W. 368

100 Mo. App. 116.

MAGINN v. LANCASTER.

Court of Appeals at St. Louis, Missouri.

March 17, 1903.

CONTRACT—CONSTRUCTION—PATENT AMBIGUITY —CONSTRUCTION BY ACTS OF PARTIES.

1. B., O., and defendant were members of a corporation. B. borrowed money to pay his share of the amount to be expended by the corporation in the construction of a building to be erected on leased ground, and agreed to pay interest on the loan during the time of the lease. To insure payment of this interest, B., O., and defendant executed a contract referring to the contract of B. with the lender, and providing that out of the profits of the building remaining after payment of all expenses, taxes, and interest on the loan to B., there should be first refunded and paid out of the balance to O. and defendant, pro rata, on the respective amounts advanced by them, "until both such amounts should be paid in full, with interest at 10%," and that when such amounts, with interest, should be paid back, B. should transfer to O. 25 shares of stock, so as to make equal the amount held by him and O., "after which any dividend declared upon said stock" should "be received by defendant, O., and B. in proportion to the amounts of stock held by them. Held, that as the consideration for defendant's entering into the contract, and agreeing that the interest on the amount loaned B. should be a first charge on the income from the building, was B.'s agreement to forego participation in the dividends, the consideration failed, and defendant's obligation ceased when he and O. were repaid the amounts advanced by them, and B. began sharing in the dividends.

2. Plaintiff claimed that the parties themselves, by continuing the pool for three years after B. became entitled to dividends on his stock, construed the contract as continuing the pool to the end of the lease. Held, that it appearing from the evidence that defendant protested against contributing to the interest on the loan after that time, plaintiff's contention was untenable.

Appeal from St. Louis Circuit Court; D. D. Fisher, Judge.

Action on a contract by James P. Maginn against Richard D. Lancaster. Judgment for plaintiff, and defendant appeals. Reversed.

The suit was commenced on December 16, 1891, by plaintiff filing in the St. Louis circuit court the following petition (omitting caption):

"Plaintiff states that on August 18, 1866, George I. Barnett, trustee, Thomas O'Reilly, and defendant, Richard D. Lancaster, entered into an agreement in writing, herewith filed, in words and figures as follows, to wit:

"`It is agreed between George I. Barnett, trustee of Elizabeth Barnett, Thos. O'Reilly and R. D. Lancaster, all of the city of St. Louis, state of Missouri, as follows:

"`That whereas said Barnett, as trustee as aforesaid, said O'Reilly and said Lancaster, own stock in the Insurance and Law Building Company in the following proportions, to wit: Said Barnett, trustee, holds two hundred shares, and said O'Reilly one hundred and fifty shares, and said Lancaster one hundred shares, the par value of said shares being one hundred dollars per share; and whereas the payments required upon the shares of said Barnett are to be made according to the terms of a certain agreement, dated the 26th day of May, 1866, between James E. Yeatman, trustee of Lucretia Yeatman, and George I. Barnett, trustee of Elizabeth Barnett, and Thomas O'Reilly, and the said O'Reilly and Lancaster are to pay on their shares whatever calls may be made thereon until the full amount of the par value of said shares be paid. And it is agreed between the said parties as follows: That out of the proceeds, rents and profits of the above described shares in said Insurance Law Building Company held by the said Barnett, trustee of Elizabeth Barnett, O'Reilly and Lancaster, after paying all expenses, ground rents, taxes, etc., including the interest to be paid to James E. Yeatman, trustee of Lucretia Yeatman, under the agreement hereinbefore referred to, there shall be first refunded and paid to the said O'Reilly and Lancaster, pro rata, on the respective amounts of fifteen thousand advanced by O'Reilly and ten thousand advanced by Lancaster, until both these amounts shall be paid in full with interest at ten per cent. per annum; and it is understood that the amount of profits paid to said O'Reilly and Lancaster will be computed at the end of every quarter, and the interest on the amounts paid each quarter to cease with the date of said payments. And when the said sum so paid up by said O'Reilly and Lancaster shall have been fully paid back, the said Barnett, as trustee of Elizabeth Barnett, shall transfer to said O'Reilly twenty-five shares of said stock, so as to make equal the amount of stock owned by said Barnett, trustee, and said O'Reilly; after which any dividend declared upon said stock shall be received by said O'Reilly, Lancaster and Barnett, trustee, pro rata, in proportion to the amounts of stock held by them, as by their legal representatives, as aforesaid.

"`In testimony whereof, the above parties have hereunto signed their names this 18th day of August, 1866.

                    "`[Signed]        George I. Barnett
                           "`Trustee of Elizabeth Barnett
                                   "`Thomas O'Reilly
                                   "`R. D. Lancaster.'
                

"Plaintiff states that, pursuant to said agreement in writing, the proceeds, rents, and profits of the above described four hundred and fifty shares, after paying all expenses, ground rents, taxes, etc., including interest to be paid to James E. Yeatman, trustee, or, in other words, the dividends on said shares declared by said Insurance and Law Building Company, less the said interest to be paid the said Yeatman, were duly paid and refunded to said O'Reilly and Lancaster, pro rata, until they were fully repaid their respective amounts, to wit, $15,000 and $10,000, with which they had purchased their said shares in said company, and the ten per cent. interest thereon, and this was accomplished in or about the year 1874.

"Plaintiff states that said Barnett duly transferred to said O'Reilly twenty-five shares of the two hundred shares, and that all said parties, including said Lancaster, continued, after said O'Reilly and Lancaster had been thus fully paid up, to contribute, pro rata, out of the dividends declared upon their respective holdings of shares, to the payment of the interest to be paid to said James Yeatman, until about May, 1876, when defendant Lancaster failed and refused to pay the pro rata contribution of the said interest which he had, as aforesaid, agreed to pay; that said Lancaster, as owner of one hundred shares of said stock, was bound to contribute two-ninths of the $1,600 annual interest charge payable to said Yeatman under the agreement of May 26, 1866, between James E. Yeatman, trustee, and George I. Barnett, trustee, and said Thomas O'Reilly, which said agreement is in words and figures as follows, to wit:

"`This agreement, made this 26th day of May, 1866, by and between James E. Yeatman, trustee of Lucretia Yeatman and others (appointed as such trustee by the Circuit Court of St. Louis County, Missouri, on the 5th day of March, 1866) of the one part, and George I. Barnett and Thomas O'Reilly of the other part, all of said St. Louis county, witnesseth:

"`The said Yeatman, as such trustee, to pay to the treasurer of the Insurance and Law Building Company, a corporation existing under the laws of the state of Missouri, in behalf and for account of George I. Barnett, trustee of his wife, Elizabeth Barnett, from time to time as and on the conditions below stated, out of the trust estate in his hands as such trustee, the sum of twenty thousand dollars in all; said payments to be made in sums of not less than one thousand dollars at a time, and the sum or sums paid hereunder from time to time to be equal to— say one-fourth of such amounts as shall at the time of calling for said payments respectively have been actually paid out by said company for work and labor already done and materials used in the erection of the four-story building which said company, as lessee, has by lease of even date herewith contracted with said Yeatman, trustee, to erect in one year from said date upon the lot in block 87, of the city of St. Louis, at the N. W. corner of Third and Pine streets, provided that the work and labor so done and materials used shall correspond with the requirements of said lease in respect to said building; and that the receipt of the contractors or subcontractors and material-men for the amounts so paid out by said company shall be first exhibited to said Yeatman, or his agent if required; and provided also that the said building while erecting shall be kept insured by said company as stipulated in said case.

"`And the said George I. Barnett and Thomas O'Reilly agree to and with said Yeatman as such trustee, his successors in trust and assigns, that upon the amounts so paid by said Yeatman, trustee as aforesaid, they will pay or cause to be paid to him, said trustee, his successors in trust or assigns, interest at the rate of eight per cent. per annum during the entire term of the lease above mentioned till its expiration by forfeiture or otherwise, said interest to be paid in equal installments, at the end of every three months at the annual rate aforesaid, and to be computed and payable on the several amounts payable hereunder by said Yeatman from the date of such payments respectively. And they further agree that before any money shall be payable hereunder by said Yeatman they will transfer or cause to be transferred to him, said Yeatman, trustee as aforesaid, or such person as he may designate as trustee for him, all the shares of stock held by said O'Reilly and said Barnett as trustee for Elizabeth Barnett in said company, to wit, one hundred and fifty shares held by said O'Reilly and two hundred shares held by said Barnett, trustee as aforesaid, such transfer to be...