Putnam County Supply Corpora. Tion v. Mendota Mining Co.
| Decision Date | 05 April 1925 |
| Docket Number | 25371 |
| Citation | 285 S.W. 409 |
| Parties | PUTNAM COUNTY SUPPLY CORPORA. TION v. MENDOTA MINING CO. et al |
| Court | Missouri Supreme Court |
Horace Merritt, of St. Joseph, for appellants.
John M Campbell and M. D. Campbell, both of Kirksville, for respondent.
This suit was brought to determine title, to set aside a certain deed executed by the plaintiff to the defendant, conveying property described in Putnam county, and to set aside a deed of trust on the same property, executed by the defendant mining company, and cancel the bonds secured by said deed of trust.
February 12, 1923, the plaintiff Putnam County Supply Corporation was the owner of a lease on 800 acres of coal land in Putnam county, with machinery and other mining equipment, and owned certain real estate in the town of Mendota in Putnam county upon which was situated a store building and a number of other buildings. W. D. Ketcham owned all the stock in the Putnam County Supply Corporation except 71/2 shares; the total capital being 300 shares of $ 100 par value each. February 12th Ketcham entered into a contract with William Hanecy of St. Joseph, Mo., whereby he agreed to procure the remaining stock in the Putnam Company and to give Hanecy and option to purchase all the said property, for the sum of $ 25,000 cash, provided Hanecy exercise the option on or before the lst day of April, 1923. On April 30, 1923, a second option contract was entered into between Ketcham and Hanecy whereby the first contract was modified with this stipulation:
'The said Hanecy is to pay to the said W. D. Ketcham, his heirs and assigns, $ 25,000 in cash and one-half of the proceeds of the sale of the contemplated bonds of the Mendota Mining Company above the $ 25,000 first referred to, less an equal amount paid by Wm. Hanecy and W. D. Ketcham and transferred to the business of the Mendota Mining Company and the Putnam County Supply Corporation, the said W. D. Ketcham is to deliver unto the said Wm. Hanecy but one-half of the stock of the Putnam County Supply Corporation owned by the said W. D. Ketcham.'
The time was extended for the purchase until June 15, 1923. It was further stipulated that Hanecy was to deliver to Ketcham, on the fulfillment of the terms of the option, an equal amount of capital stock of the Mendota Mining Company to that reserved by himself or his associates, less the amount paid in commissions, not exceeding $ 10,000. Other conditions, unimportant for our purpose, were in that contract.
After the first option contract was entered into, the Mendota Mining Company, defendant, was incorporated. The exact date of this incorporation does not appear. On June 16, 1923, the Putnam County Supply Corporation executed a warranty deed conveying the property mentioned in the option contract and described in the petition to the Mendota Mining Company for a recited consideration of $ 20,000. On June 20, 1923, the Mendota Mining Company executed a deed of trust on the property described, conveying the same to John S. Boyer, trustee, to secure the payment of $ 60,000 in bonds. The deed and deed of trust were both filed for record on June 25, 1923. The Mendota Mining Company later issued a prospectus setting forth the value of the property securing the bonds, saying that its appraised value was $ 289,000, and giving the capacity of the mine and other items connected with the property; this for the purpose of selling the bonds. It was not shown that any of the bonds were ever sold.
Ketcham claimed that neither he nor the Putnam Company ever received any consideration whatever for the conveyance of the property to the Mendota Mining Company. He testified that he executed the deed for the Putnam Company because Hanecy and Mrs. Bertha Collins, the manager of the Mendota Mining Company, told him the bonds were sold and it was necessary for the deed to be executed so that the contract could be closed. Ketcham further said that he wanted the bonds and demanded them of Mrs. Collins, but she was unable to obtain them. He went to St. Joseph for the purpose. The bonds appeared to be in the hands of one Drusedow, whom Ketcham described as a fake stock salesman. It appears that Ketcham knew that he would have to get his money from the sale of the bonds, and that he demanded the bonds until they should be sold, saying that he would take care of the sale of them. No bonds were delivered to him, although he made a final demand just before filing the suit in this case in October, 1923. The Putnam Company remained in possession of the property and was in possession at the time suit was brought.
The defendant contends that Ketcham was paid $ 1,000 on the contract and put in evidence a draft of $ 1,000 payable to Ketcham which he cashed. Ketcham, however, in his testimony, explained that Hanecy and Mrs. Collins borrowed money from him at various times while the negotiations were pending and while he was trying to get the matter straightened out. He introduced a number of checks by which he paid them money and testified that he also paid them certain sums in cash. He testified that the thousand-dollar draft was for the purpose of repaying what he had loaned them and that it was not sufficient to cover his account.
The defendant offered in evidence a certificate of stock for 898 shares in the Mendota Mining Company, issued to W. D. Ketcham. Ketcham said in his testimony that he had never seen the certificate until it was exhibited on the trial. The defendant introduced evidence tending to show that Ketcham himself filed the deed of trust for record. Ketcham said he remembered nothing of the kind, and denied the fact.
On this evidence the trial court found for the plaintiff, found that the plaintiff was the owner of the property described in the petition, set aside the deed by which the plaintiff conveyed the property to the Mendota Mining Company, also the deed of trust executed by the Mendota Mining Company to secure the bonds mentioned, and ordered the defendants to deliver the bonds into court for cancellation. From that judgment all the defendants appealed. The other defendants were Drusedow, who is said to have had the bonds, and John S. Boyer, trustee in the deed of trust.
I. The appellants...
To continue reading
Request your trial