Ruby Chief Mining & Milling Co. v. Gurley

• Decision Date: 07 March 1892
• Citation: 29 P. 668,17 Colo. 199
• Parties: RUBY CHIEF MINING & MILLING CO. v. GURLEY.
• Court: Colorado Supreme Court

29 P. 668

17 Colo. 199

RUBY CHIEF MINING & MILLING CO. v. GURLEY.

Supreme Court of Colorado

March 7, 1892

Appeal from district court, Arapahoe county.

Suit by Charles D. Gurley against the Ruby Chief Mining & Milling Company to recover for money advanced, articles furnished and services rendered. Judgment for plaintiff. Defendant appeals. Reversed.

Syllabus by the Court

1. A general appearance and the filing of an answer, after denial of a motion to quash the return upon the summons, constitute a waiver of all irregularities or defects in the issue service, or return of the process.

2. H T., and S. own and operate certain mining properties. After incurring debts, for some of which H. and T. give their personal promissory notes, they organize a corporation. The mines are then deeded to the corporation, neither of the notes mentioned having become a lien thereon, H. and T. becoming the officers and almost exclusive stockholders of the company. Held, that moneys paid by H. in taking up the notes constitute no legal claim against the corporation, and a recovery must be disallowed.

Rogers & Cuthbert, for appellant.

M. B. Carpenter, for appellee.

HELM J.

The first question presented by counsel for appellant requires but little attention. It is based upon alleged irregularities in the service of process. When the motion to quash the return upon the summons was denied, a general appearance was made on behalf of appellant, and an answer was filed traversing the averments of the complaint. The defects, if any, in the service were thus waived. By appellant's action the court obtained jurisdiction in the premises as fully as if there had been no irregularity in the issue service, or return of the summons. The principle of waiver, under such circumstances, has been frequently recognized by this court. Railway Co. v. De Busk, 12 Colo. 294, 20 P. 752. Prior to September, 1885, three men (Hawkes, Taylor, and Smith) owned and operated certain mining properties in Gunnison county. At the date referred to these parties organized the appellant company. They deeded the properties mentioned to the company, and received stock from the company in payment therefor. But a very few shares of stock were owned by other persons, and Hawkes, Taylor, and Smith became the officers and managers of the company. A corporation was thus substituted in place of the original mining partnership or joint ownership. Work upon the mines was them resumed, and carried on in the name of the corporation. In February, 1887, the present suit was brought by appellee, as assignee of Hawkes, one of the three parties above mentioned, to recover for moneys advanced, articles furnished, and services rendered to the company by Hawkes. As it is conceded that the judgment for $4,078 includes but two items, viz., a draft for $4,000, and $78 expended for certain specified articles, the rest of the account will receive no further attention. It appears without controversy that in January, 1886,--over three months after the organization of the company,--Hawkes advanced by the draft in question the sum of $4,000, which was used in the payment of outstanding obligations. Nor is there any dispute concerning the actual expenditure of the remaining $78. But it is strenuously contended on behalf of appellant that these moneys were paid in pursuance of an agreement made when the company was organized. Under this agreement, so it is said, each of the three principal stockholders was to advance money, in proportion to the quantity of stock received by him, for the payment of all debts theretofore incurred in working the properties, and outstanding at the date of incorporation, as well as for the discharge...