New Lindell Hotel Co. v. Smith

• Decision Date: 28 November 1882
• Citation: 13 Mo.App. 7
• Parties: NEW LINDELL HOTEL COMPANY, Appellant, v. IRWIN Z. SMITH, Respondent.
• Court: Missouri Court of Appeals

13 Mo.App. 7

NEW LINDELL HOTEL COMPANY, Appellant,

v.IRWIN Z. SMITH, Respondent.

St. Louis Court of Appeals, Missouri.

Nov. 28, 1882.

APPEAL from the St. Louis Circuit Court, LINDLEY, J.

Reversed and remanded.

R. A. CAMPBELL and H. NEUHOFF, for the appellant.

G. M. STEWART and J. L. TORREY, for the respondent.BAKEWELL, J., delivered the opinion of the court.

Defendant Smith died since the appeal in this cause, and it has been revived in the name of his executor, Joseph W. Branch.

The allegations of the petition are substantially as follows:--

Prior to December 8, 1871, defendant and others, property-holders, merchants, and citizens of St. Louis, interested in the erection of a first-class hotel in that city, solicited Mrs. Ames, who then owned a large part of block 125 in St. Louis, to build a first-class hotel on part of that block, and as an inducement, offered to her a donation of not less than $150,000, to build the same, if such amount could be raised by subscription.

At that time, the owners of property in block 125, and other persons interested, were forming an incorporated company to build the hotel. In consideration of the premises, and of the benefits to accrue from building the hotel, defendants and others interested in building the hotel, as parties of the first part, and the New Lindell Hotel Company, then being formed and then represented by Mrs. Ames, as “parties of the second part,” by an agreement in writing filed with the petition, signed by defendant, and other subscribers to that instrument as parties of the first part, stipulated and agreed, each with the other, and with said parties of the second part, to subscribe and pay to said corporation as a free donation, the amounts set opposite their names, and by them subscribed in the following manner: One-tenth, when $50,000 should have been expended; one-tenth, when $100,000 should have been expended, and an additional tenth, whenever the additional sum of $50,000 should have been expended, the last instalment to be paid when $500,000 should have been expended, or when the hotel should be completed.

It was stipulated by defendant and his co-subscribers, parties of the first part, that they did thereby appoint one Barrett, now dead, as their agent to represent them and execute said agreement with said parties of the second part, and that the expenditure of the moneys before referred to, by said corporation, should be evidenced only by the written certificate of Barrett, who, by the terms of the instrument, was required to furnish said corporation such certificate for each and all of said expenditures, when they should have been respectively made, and for such purpose, Barrett was to have access to the books and other evidences of the expenditures of the company in erecting the building.

It was stipulated in the written instrument that each subscriber was liable to pay only the amount by him subscribed, and that the agreement was to be void if the building was not begun before July 1, 1872. It was further agreed by Mrs. Ames, representing said corporation so to be formed, that, when the total amount of bona fide subscriptions should reach $150,000, said corporation would build a first-class hotel, of certain dimensions set out in full, that the same should be completed without delay, and that Mrs. Ames would procure the organization of said corporation under the laws of Missouri, and convey to it the unencumbered fee of the ground on which the building was to be erected.

In pursuance of the terms of the agreement, $150,000 having been subscribed, Mrs. Ames and others interested caused the New Lindell Hotel Company, the plaintiff herein, to be organized, and Mrs. Ames conveyed, on June 29, 1872, the ground to the corporation, which proceeded to erect the building according to the terms, and completed it in September, 1874.

There was paid out in the erection of the building by plaintiff, more than $500,000, and Barrett, as agent of defendant and his co-subscribers, gave to plaintiff his certificates in writing from time to time, stating in each of said certificates that the sum of $50,000 had been spent in the erection, and that plaintiff was thereby entitled to collect and receive of each of the subscribers an instalment of ten per cent of the amount subscribed by each subscriber; and, from time to time, as plaintiff spent $50,000 in the erection, Barrett gave plaintiff his certificate, stating the fact of such additional expenditures, and that plaintiff was entitled to collect of the subscribers further instalments of ten per cent. Barrett gave ten certificates of like tenor, the last of which certified the completion of the building, and that the plaintiff was entitled to collect of the subscribers their entire subscription, and was dated September 23, 1874.

The petition then alleges the entire fulfilment of the agreement by plaintiff, and that defendant subscribed to said instrument for the purposes and on the conditions therein set out, $2,000, the whole of which has become due from plaintiff to defendant. The first eight instalments have been paid, and the last two, amounting to $400, are due and unpaid since September 25, 1874, and have been demanded.

Plaintiff asks judgment for $400, and interest from date last named.

Defendant demurred to the petition on the grounds that it does not set forth sufficient facts to constitute a cause of action; that it does not appear that plaintiff has any valid title or interest in the subject-matter of the action; that the contract is not binding on defendant; that no consideration for the promise is set out.

The demurrer was sustained.

It has been repeatedly held in this country that the mere fact that the corporation had not come into existence when the agreement was signed, is not an insuperable objection to a recovery of the subscription by the corporation, in cases such as the one before us.

The Trustees of...