Murray v. Butte-Monitor Tunnel Mining Co.
| Decision Date | 02 July 1910 |
| Citation | 110 P. 497,41 Mont. 449 |
| Parties | MURRAY v. BUTTE-MONITOR TUNNEL MINING CO. et al. |
| Court | Montana Supreme Court |
Appeal from District Court, Silver Bow County; John B. McClerman Judge.
Suit by James A. Murray against the Butte-Monitor Tunnel Mining Company and others. Judgment for defendants, and plaintiff appeals. Affirmed.
R. L Clinton, for appellant.
Walsh and Nolan, for respondents.
Prior to the time of the transaction out of which this suit arose William S. Switzer was indebted to G. W. and Guy Stapleton in the sum of $10,380, and, to secure such indebtedness, had delivered to the Stapletons in pledge certificates representing 1,500,000 shares of the capital stock of the Butte-Monitor Tunnel Company. The indebtedness having become due, the Stapletons brought an action to enforce payment and to foreclose their lien upon the stock. The action had gone to judgment, in favor of the Stapletons, for $17,969.27 including interest and costs, and the sheriff was about to sell the pledged stock, when Switzer secured from James A. Murray the money to discharge the Stapleton judgment, and at the same time secured an amount in addition thereto sufficient to make the total amount received by him from Murray $20,000. At the same time Switzer delivered to Murray certificates representing 2,146,650 shares of the capital stock of the Butte-Monitor Tunnel Company, indorsed in blank. The transaction between Switzer and Murray occurred September 1, 1908. In March, 1909, Murray made demand upon Switzer, the president of the tunnel company, and upon Maloney, its secretary, that they cause a transfer of the 2,146,650 shares to be made upon the books of the corporation. This demand was refused, and the present suit was brought against the tunnel company, Switzer and Maloney to compel such transfer.
Stated briefly, the complaint alleges that on or about September 1, 1908, Switzer sold, assigned, transferred and delivered to plaintiff the 2,146,650 shares mentioned above, for a valuable consideration, and ever since said date plaintiff has been the owner of said shares; that at the time of said sale plaintiff received from Switzer certificates representing the shares of stock and each of said certificates was duly indorsed by Switzer; that on March 15, 1909, plaintiff made demand on the president and secretary of the company that they make transfer upon the books of the corporation, that they receive the certificates so indorsed to him, cancel the same and issue to him new certificates representing a like amount of the capital stock of the company, but that this demand was refused.
To this complaint the defendants made joint answer, but, as conceded by both parties to this appeal, the allegations of the answer are not material here, except in so far as they disclose the defense and equitable counterclaim of the defendant Switzer. Switzer alleges that at the time of the transaction with Murray, the 2,146,650 shares of stock were and ever since have been worth $150,000. The facts are then alleged to show that the transaction between Murray and Switzer, described in the complaint, amounted only to a loan of $20,000, by Murray to Switzer, and the pledging of the certificates representing the stock, by Switzer to Murray to secure the loan. It is then alleged that at the time of the transaction, Switzer was a man of advanced age, was suffering from senile dementia, and was not mentally able to transact business of great importance, and that Murray is seeking to take advantage of him and to claim that the transaction was in fact a sale. A readiness and willingness to repay the $20,000 with interest is pleaded, and the answer concludes with a prayer that Switzer be permitted to redeem the certificates upon paying to Murray the principal sum with interest. The reply puts in issue these affirmative allegations of the answer, reasserts that the transaction was a sale, and alleges that, at the time of its consummation, Murray executed and delivered to Switzer an option in writing, to repurchase the stock on or before January 1, 1909, upon payment of $30,000.
Upon the issues thus made, the cause was brought on for trial before the court sitting without a jury. The trial court found that the transaction between Murray and Switzer amounted to a loan by Murray to Switzer, of $20,000, and that the shares of stock were pledged by Switzer to Murray to secure the loan. A decree was rendered and entered which adjudges that there is due to Murray from Switzer $20,000, with legal interest thereon from September 1, 1908; that Switzer is the owner of the pledged stock; that, if Switzer shall within 30 days pay over to Murray the amount adjudged to be due, then Murray shall surrender up the certificates representing the stock, but if Switzer shall fail to make payment within the time limited, then Murray is directed to sell the stock at public auction, and apply the proceeds of the sale to the satisfaction of his claim and pay the overplus, if any, to Switzer. From the judgment and an order denying plaintiff a new trial, he has appealed.
In appellant's brief it is said: "The only question for the court to determine is whether or not the transaction was a sale or a pledge of the stock." We do not agree with counsel as to the form of the question. The question thus stated correctly represents the controversy as it was presented to the trial court; but this is a court of review, and we have heretofore had occasion to define our relationship to the trial court under the provisions of section 6253, Rev. Codes. Under the construction of that statute as heretofore given, we adopt the findings of the trial court, unless it appears that the evidence fairly preponderates against such findings. Bordeaux v. Bordeaux, 32 Mont. 159, 80 P. 6; Finlen v. Heinze, 32 Mont. 354, 80 P. 918; Watkins v. Watkins, 39 Mont. 367, 102 P. 860; Copper M. M. & S. Co. v. Butte & Corbin M. Co., 39 Mont. 487, 104 P. 540. In the last case this court said: "In equity cases, such as this, though this court may examine the evidence and determine the question of fact for itself (Rev. Codes, § 6253), yet it may not overturn the findings of the trial court unless there is a decided preponderance of the evidence against them." In view of the rule thus repeatedly announced by this court, the question which this appeal presents for our determination should be stated as follows: Does the evidence which this record contains preponderate against the finding made by the trial court, that the transaction between Switzer and Murray amounted only to a pledge of the stock as collateral security for the loan of $20,000?
On behalf of the plaintiff there is in the record the testimony of Murray and his agent Chapman that when application was made by Switzer for a loan Murray declined to loan the money upon the security offered, but did offer to purchase Switzer's stock for $20,000, and to give Switzer an option to repurchase it at any time before January 1, 1909, upon payment of $30,000, and that this offer was accepted by Switzer, and that the offer and acceptance constituted the only contract between the parties. To this there is to be added the circumstance that there was not any evidence of indebtedness given by Switzer to Murray. In Gassert v. Bogk, 7 Mont. 585, 19 P. 281, 1 L. R. A. 240, this court said: There is also in the record the evidence of two witnesses called by the plaintiff, who testified that at the time of the transaction the entire property of the Butte-Monitor Tunnel Company--the mining claims and improvements--was not worth more than $10,000. Upon that basis, Switzer's interest was worth approximately $5,800.
As opposed to plaintiff's contention, there is the evidence of M. V. Conroy, who testified that Switzer came to him explained his financial difficulties arising from the fact that his stock was about to be sold in satisfaction of the Stapleton judgment, and solicited Conroy's aid in procuring a loan sufficient to meet Stapleton's demand and prevent the sale; that Switzer told him that he was willing to pay a good rate of interest. Conroy then testified that he went to Murray's bank, and, Murray being absent, he presented the matter to Chapman, who told him that he would submit it to Murray; that soon after this Chapman telephoned to him that Murray was back in Butte; that he then started for Murray's bank but met Murray on the street, who directed him to send Switzer to him (Murray), and that he (Murray) would discuss the matter with Switzer; that he is informed that Switzer went to see Murray; that on the day before the sale was to occur he (Conroy) again met Murray, and talked the matter over with him, with the result that Murray said: "I don't want to see the Stapletons skin the old man [meaning Switzer], not that I have got any sympathy with the old man, but I don't want to see the Stapletons skin him, and, for that reason, I will make him the loan;" that on September 1st the transaction was closed at Murray's bank, Murray, Chapman, Switzer and Conroy being present; that Murray then paid over $17,969.30, the amount necessary to satisfy the Stapleton judgment, and this amount was taken by Conroy and Chapman to the sheriff and paid ever to that officer, who in turn delivered to them the 1,500,000 shares of stock which had been advertised for sale; that this stock was taken back to Murray's bank; that when he and Chapman returned...
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