Miser Gold Min. & Mill. Co. v. Moody

• Decision Date: 07 May 1906
• Parties: MISER GOLD MIN. & MILL. CO. et al. v. MOODY et al.
• Court: Colorado Supreme Court

86 P. 335

37 Colo. 310

MISER GOLD MIN. & MILL. CO. et al. v. MOODY et al.

Supreme Court of Colorado

May 7, 1906

Rehearing Denied July 2, 1906.

Appeal from District Court, Rio Grande County; C. C. Holbrook Judge.

Suit by the Miser Gold Mining & Milling Company and others against Frank E. Moody and others. From a judgment in favor of defendants, plaintiffs appeal. Reversed and remanded.

Frank I. Willsea, for appellants.

John H Gabriel, for appellees.

BAILEY J.

Defendants Frank E. Moody, Knoblock, and Eaton were the owners of what is known as the 'Miser Group' of mines, located in Rio Grande county. Plaintiffs Ballintine and Cotton and defendants Nye and the two Moodys were the owners of certain unpatented mining claims in the same county. Defendant the Nebraska Rio Grande Mining Company, a corporation, owned certain unpatented mining claims in the same county and also a bond and lease upon the Miser group. This company had contracted an indebtedness in working the Miser group, which it was unable to pay. It was agreed by the several parties to form a corporation to take over and operate these mines and mining claims, and for this purpose plaintiff company was formed, with a capital stock of 1,000,000 shares. Previous to the formation of the corporation, a division of the capital stock was agreed upon 40,000 shares to be issued to defendant Eaton and 560,000 shares were to be held by plaintiff Ross for the period of one year in trust for the several parties, except the two corporations and Eaton. At the end of the year this trust stock was to be divided in a manner agreed upon. The other 400,000 shares were to be placed in the treasury to be sold and the proceeds used for development purposes. In addition to the transfer of the mining claims, plaintiffs Cotton and Ballintine agreed with defendants Frank E. Moody, Eaton, and Knoblock to do something in the way of disposing of the treasury stock and raising funds with which to develop the property and put it upon a paying basis. As to the terms of this agreement, there is serious conflict in the testimony. The court below found that it was too indefinite and vague to admit of its specific enforcement by the court.

Pursuant to the agreement, the several parties made the conveyances agreed to be made by them, the deed for the Miser group being executed by Moody and Knoblock and by Moody for Eaton as attorney in fact. Upon this deed being delivered, the form of the certificate of acknowledgment was objected to by the attorney of the company, and it was returned to Frank E. Moody for correction, and to be recorded when the correction had been made. Moody held the deed for some time and while it was in his possession permitted Knoblock to mutilate it by tearing off the signatures. Plaintiff Ross was advised of the agreements made by the several promoters previous to the organization of the company, by which the several mining claims were to be conveyed to the company, and agreed to take 48,000 shares of the stock, for which he would pay $1,000 to defray the expense of incorporating and organizing the company and to liquidate the indebtedness of the Nebraska Company, incurred in developing the Miser group. He furnished this money after seeing the deeds delivered. The 40,000 shares of stock were issued to Eaton on the 29th of September, 1900, immediately after the delivery of the deeds and on the 27th of November following, which was about the time of the destruction of the deed by Knoblock, Eaton returned the stock and sent a written notice to the company that he recalled 'any and all deed or deeds which may have been executed by my authority, express or implied.' Defendants Knoblock and Frank E. Moody complained to Cotton and Ballintine that they had failed to finance the concern according to their agreement. They replied that defendants had placed it beyond their power to do so by their refusal to return the deed. Finally, it appeared that the entire property could be sold for $60,000 if the deed was returned, whereupon, Knoblock contended that the amount of stock which he and Moody and Eaton were to receive according to the trust agreement was too small and that they should be given a greater proportion. This was not agreed to, and shortly thereafter the deed was destroyed.

Plaintiffs then brought this action to obtain a decree that plaintiff company was the owner of the property and to compel the execution of a new deed. Defendants Clarence Moody, Nye, and the Nebraska Company answered, admitting the allegations of the complaint. Defendants Knoblock, Eaton, and Frank E. Moody filed their separate answers, in which they admitted many of the material allegations of the complaint, but denied the actual delivery of the deed, and then allege their version of the contract made by Cotton and Ballintine previous to the organization of the company and defendants' subsequent breach, and pray for the dismissal of the suit. The cause was tried by the court, who found that the deed was delivered but that the contract made by Cotton and Ballintine prior to the organization of the...