Ryan v. Vickers

• Court: Colorado Supreme Court
• Writing for the Court: McWILLIAMS; PRINGLE, C. J., and SUTTON
• Citation: Ryan v. Vickers, 406 P.2d 794, 158 Colo. 274 (Colo. 1965)
• Decision Date: 04 October 1965
• Docket Number: No. 20806,20806
• Parties: Mary K. RYAN, Assignee, Plaintiff in Error. v. jack VICKERS, Defendant in Error.

Page 794

406 P.2d 794

158 Colo. 274

Mary K. RYAN, Assignee, Plaintiff in Error. v. jack VICKERS, Defendant in Error.

No. 20806.

Supreme Court of Colorado, In Department.

Oct. 4, 1965.

Rehearing Denied Nov. 8, 1965.

Thomas D. Smart, John H. Tippit, Denver, for plaintiff in error.

Shivers, Banta & McMartin, Englewood, for defendant in error.

McWILLIAMS, Justice.

Mary K. Ryan, as the assignee of one E. M. Johnson and Metallurgical Coals Inc., a West Virginia Corporation, made claim against Jack Vickers for damages in the sum of $183,105.64 which allegedly resulted from Vicker's breach of contract. Upon trial, after Ryan had completed the presentation of her evidence, Vickers pursuant to Rule 41(b), R.C.P.Colo. moved for an involuntary dismissal of her claim for relief. This motion was granted and the trial court accordingly entered a judgment dismissing Ryan's claim. It is this judgment which by writ of error Ryan now seeks to reverse.

It is agreed that in resolving this controversy we must view the evidence in a light most favorable to the plaintiff, against whom the motion to dismiss was interposed and granted. See Union Pacific Railway Co. v. Shupe, 131 Colo. 271, 280 P.2d 1115.

Accordingly, Ryan's evidence established, at least prima facie, the following:

1. E. M. Johnson and Metallurgical Coals were the owners of certain land situate in the State of West Virginia, which land was under lease to the J F Coal Corporation, another West Virginia corporation;

2. this land was leased to J F Coal for the purpose of mining coal therefrom, and under the terms of the several leases J F Coal was obligated to pay E. M. Johnson was and Metallurgical Coals certain rents, plus additional royalties on coal actually mined;

3. Jack Vickers and other members of his family, as well as certain of his business associates, were stockholders in J F Coal;

4. in the several months before September 9, 1959 J F Coal became hopelessly in debt on the tune of about one million dollars, as of that date owing, among others, E. M. Johnson and Metallurgical Coals about $75,000 in unpaid rent and royalties, and also owing the Small Business Administration some $250,000;

5. on September 9, 1959 Jack Vickers and his lawyer, held a meeting with E. M. Johnson and representatives of Metallurgical Coals, and their lawyer, the meeting being held in the home of E. M. Johnson in West Virginia;

6. this meeting was held at the request of Jack Vickers, who as of that time intended to form a new coal mining company and, in connection therewith, desired that E. M. Johnson and Metallurgical Coals lease to this new company, when formed, the same properties which were then under lease to the bankrupt J F Coal, such law leases to be on the same terms and conditions as the old ones;

7. at this meeting E. M. Johnson and Metallurgical Coals verbally agreed to lease these properties to the coal mining company which Jack Vickers was about to form, the terms of the leases to be the same as the several leases then held by J F Coal, with a minor modification agreed to by the parties as to the notice required in the case of a default;

8. on this same occasion, and as a part and parcel of the foregoing verbal agreement, Vickers also verbally agreed to make E. M. Johnson and Metallurgical Coals 'whole' as to the amount of the indebtedness of J F Coal to them for the unpaid rent and royalties, this promise to cover not only existing indebtedness but such further and additional indebtedness as might accrue until such time as the existing leases to J F Coal could be canceled and new leases given the company which Vickers proposed to form;

9. at this same meeting and also as a part and parcel of the verbal agreement between the parties, E. M. Johnson and Metallurgical Coals and their lawyer informed Vickers and his lawyer that as landlords they not only held a landlord's lien on the mining machinery and equipment of J F Coal, which machinery and equipment was estimated to have a value of $500,00, but also that their lien under local law took precedence over all other liens or claims, including that of the Small Business Administration;

10. at this meeting of September 9, 1959 E. M. Johnson and Metallurgical Coals verbally agreed to take all necessary legal steps to immediately cancel the existing leases to J F Coal;

11. E. M. Johnson and Metallurgical Coals also verbally agreed to bid at the foreclosure sale of J F Coal's mining machinery and equipment to the extent of their first and prior landlord's lien and to also bid over and above the amount of their lien, if requested to do so by Vickers, all conditioned upon Vickers' furnishing the additional sums of money to support such additional and further bidding; and

12. Upon September 24, 1959 a written memorandum embodying the terms of their verbal agreement was signed by the attorneys for E. M. Johnson and Metallurgical Coals and Jack Vickers respectively, the attorneys having been empowered by the parties to sign the written memorandum in their behalf.

It was on the basis of an alleged verbal contract entered into by the parties on September 9, 1959 that Ryan, as assignee, made claim against Vickers for damage flowing from Vickers' alleged breach thereof, contending that her assignors had performed all of their obligations under the verbal contract, but that Vickers had failed to pay them for the unpaid rent and royalties due them from J F Coal.

Upon trial it developed that the landlord's lien of E. M. Johnson and Metallurgical Coals was not prior to the lien of the Small Business Administration, and on the contrary that the lien of the Small Business Administration had priority over their lien.

As already noted, when Ryan concluded the presentation of her evidence, the trial court upon motion dismissed her claim, holding that all parties to the...