McManus v. Tralles

• Decision Date: 12 July 1923
• Docket Number: No. 17888.,17888.
• Citation: 253 S.W. 406
• Parties: MOMANUS v. TRALLES.
• Court: Missouri Court of Appeals

253 S.W. 406

MOMANUS v. TRALLES.

No. 17888.

St. Louis Court of Appeals. Missouri.

July 12, 1923.

Rehearing Denied July 18, 1923.

Appeal from St. Louis Circuit Court; Franklin Ferriss, Judge.

"Not to be officially published."

Action by Thomas Ward McManus against Forest P. Tralles, executor de bonis non c. t. a. of the estate of James J. Butler, deceased. Judgment for defendant, and from an order sustaining plaintiff's motion for new trial defendant appeals. Reversed and remanded, with directions to reinstate original judgment.

George O. Durham, Forest P. Tralles, and Charles P. Williams, all of St. Louis, for appellant.

Campbell Allison and W. B. Homer, both of St. Louis, for respondent.

SUTTON, C.

This action was brought in the circuit court of the city of St. Louis, September 8, 1919. The suit was originally instituted against Rose Mary Butler, executrix of the estate of James J. Butler, deceased. Since the case has been brought to this court on appeal, the death of Rose Mary Butler has been suggested here, and Forest P. Tralles, having been duly appointed executor de bonis non c. t. a. of said estate, has entered his appearance in said cause and has been substituted as the party appellant and the cause revived against him as such executor.

This action is founded on the following contract:

"Whereas, Edward Butler and Thomas Ward McManus, of the city of St. Louis, state of Missouri, have agreed in writing with Charles P. Laughlin and O. J. Westlake, of Silver City, New Mexico, to purchase eight certain mining claims situate in Grant county, New Mexico, described in a certain deed executed by said Charles P. Laughlin and C. J. Westlake to Edward Butler and Thomas Ward McManus of date the 30th day of April, 1907, which said deed is now held in escrow by the Silver City National Bank; and

"Whereas, by the terms of said contract said Thomas Ward McManus and Edward Butler have agreed to pay to said Charles P. Laughlin and O. J. Westlake on or before May 15, 1907, the sum of fifteen thousand dollars ($15,000.00) in cash, and to deliver on or before said date to said Charles P. Laughlin and O. J. Westlake one negotiable promissory note for the sum of twenty-five thousand dollars ($25,000.00) to be executed by Edward Butler and. Thomas Ward McManus, payable to said Charles P. Laughlin and O. J. Westlake on or before May 1, 1908, with interest thereon at the rate of five per cent. (5%) per annum until paid; and

"Whereas, Edward Butler and Thomas Ward McManus, James J. Butler, Sim T. Price, E. B. Lane and William S. Haynes, are desirous of forming a corporation to take over said properties from Edward Butler and Thomas Ward McManus as soon as the terms of said contract for purchase shall have been complied with; and

"Whereas, in order to effect said deal it is necessary to raise, on or before May 15, 1907, the sum of fifteen thousand dollars ($15,000.00) in cash, to be paid on said contract, and to raise on or before May 1, 1908, the sum of twenty-five thousand dollars ($25,000.00), with which to make payment of said note of twentyfive thousand dollars ($25,000.00), to be given by Edward Butler and Thomas Ward McManus to said Laughlin and said Westlake:

"Now, in consideration of the premises, it is agreed between the undersigned, all with each and each with all, as follows:

"A corporation shall be organized under the laws of the state of Missouri, under the name off `Ajax Copper Mining Co.' with a capital stock of ten thousand shares (10,000) of the par value of one hundred dollars ($100.00) each, making a total capital of one million dollars ($1,000,000.00);

"That Edward Butler will subscribe for 3,249 shares of said stock; James J. Butler will subscribe for 2,000 shares; Thomas Ward McManus will subscribe for 2,000 shares; Sim T. Price will subscribe for 2,000 shares, D. B. Lane will subscribe for 500 shares, and William S. Haynes will subscribe for 250 shares, and Peter C. Linchey will subscribe for one share of said stock.

"It is further agreed that for the purpose of providing for the payment of said note of $25,000.00, to be given by Edward Butler and Thomas Ward McManus to said Laughlin and Westlake, that Edward Butler will provide on or before May 1st, 1908, the sum of $8,125.00 for said purpose; that said Thomas Ward McManus will provide the sum of $5,000.00, on or before said date, for said purpose; that James J. Butler and Sim T. Price will each, on or before said date, contribute the sum of $5,000.00; that E. B. Lane, on or before said date, will contribute the sum of $1,250.00 for said purpose; that William S. Haynes will, on or before said date, contribute the sum of $625.00 for said purpose.

"In order to secure Edward Butler and Thomas Ward McManus against their liability on said note, James J. Butler, Sim T. Price, William S. Haynes and E. B. Lane severally agree to execute and deliver to Edward Butler and Thomas Ward McManus, their several notes for the proportion that each is to pay of said $25,000.00, and attach thereto the stock of said company to which said several parties shall be entitled, to be held as collateral for the payment of the several amounts for which they stand obligated to said Edward Butler and Thomas Ward McManus.

"The payment of said twenty-five thousand dollars ($25,000.00) note shall be of date May 1, 1908, and the payment of the notes of the several parties referred to, to be given to Edward Butler and Thomas Ward McManus, shall be of date April 20, 1908, and shall bear interest at the rate of five (5%) per cent. per annum from date May 1, 1907, and in the event of the nonpayment of either of said parties of the notes so given, said Edward Butler and Thomas Ward McManus shall become entitled, after three days' notice, to the stock so pledged by said parties, if payment is not made in said three days. * * * "

The contract was dated May 10, 1907, and was signed by the parties thereto.

The certificate of incorporation of the Ajax Copper Mining Company was issued by the Secretary of State, July 30, 1907, and a certified copy of this certificate was filed for record in the office of the recorder of deeds of the city of St. Louis, August 19, 1907. On May 24, 1907, a quitclaim deed to the Ajax Copper Mining Company was acknowledged by Edward Butler and wife and plaintiff, before Margaret L. Samuels, a notary public. This deed was thereupon delivered by the notary to Mr. Haynes, who, she testified, was secretary of the Ajax Copper Mining Company. It is said that thereupon this deed was sent to New Mexico for record, but the evidence as to this is not clear. The deed itself was not produced, nor were its contents proved.

Afterwards, some time during the summer of 1907, a conference was had In the office of the Ajax Copper Mining Company in S. Louis in regard to the title to the mining claims of the Ajax Company. Edward Butler, E. B. Lane, the plaintiff, and James Z. Butler were present at that conference. When James J. Butler arrived at the conference, the matter of the title to the property was discussed, and Col. Edward Butler said:

"What do you think? They say they haven't got a couple of those claims patented."

There was further talk to the effect that they did not have a patent to the claims that had been put in the deed. James J. Butler said not to pay the $25,000 note; he said:

"I wouldn't pay it. They cannot collect on something like that when they have deeded something they haven't got a patent on."

Later on they were discussing what they would do, and James J. Butler said, "Allen can take care of this." Mr. Allen, who was a practicing attorney of St. Louis, was present at the conference, representing Mr. Price, who was absent on account of illness.

It does not appear that James J. Butler ever executed his promissory note to plaintiff and Edward Butler as provided for in the contract.

Suit was brought against Edward. Butler and Thomas Ward McManus on the $25,000 promissory note provided for in the contract upon which this suit is founded when said note became due in 1908. The answer of the defendants in that suit denied liability on said note on the ground that the consideration for said note was the transfer of certain mining property in New Mexico, that the title to said property was then and there warranted, and that the title to the property for which said note was executed and delivered was defective. It does not appear who represented Edward Butler in that suit, but it was shown that Attorneys Cullen and Fauntleroy answered for McManus.

The suit on the note finally terminated in a judgment against the defendants, and said judgment was paid in 1915 by plaintiff herein and the estate of Edward Butler, who died pending the suit; each defendant paying one-half of the amount of the judgment.

In the present case the circuit court, at the conclusion of the plaintiff's evidence, sustained the defendant's demurrer to the evidence and gave judgment in favor of the defendant, and afterwards sustained the plaintiff's motion for a new trial on the ground of error in sustaining the demurrer to the evidence, and ordered a new trial in said cause. From this order granting a new trial the defendant appealed.

The contract sued on is unique, and distinctive precedents for its classification and. construction are not available. The respondent insists that it is an indemnity contract or agreement indemnifying respondent and Edward Butler against liability on the note executed by them for a portion of the purchase price of the mining claims purchased by them from Laughlin and Westlake, and that being such a contract or agreement fin indemnity, his right of action against appellant accrued upon payment of the judgment rendered in the suit on said note, and not until such payment, and that therefore the statute of limitations did not begin to run until the year 1915 when such payment was made. This view necessarily contemplates the performance of the...