Sidwell v. New Mine Sapphire Syndicate

• Decision Date: 11 May 1956
• Docket Number: No. 9427,9427
• Citation: 297 P.2d 299,130 Mont. 189
• Parties: Thomas P. SIDWELL, Plaintiff and Appellant, v. THE NEW MINE SAPPHIRE SYNDICATE, a Corporation, et al., Defendants an Respondents.
• Court: Montana Supreme Court

Page 299

297 P.2d 299

130 Mont. 189

Thomas P. SIDWELL, Plaintiff and Appellant, v. THE NEW MINE SAPPHIRE SYNDICATE, a Corporation, et al Defendants an Respondents.

No. 9427.

Supreme Court of Montana.

May 11, 1956.

Rehearing Denied May 25, 1956.

Charles Davidson, Great Falls, for appellant.

Hoffman & Cure, Great Falls, Harvey B. Hoffman, Great Falls, argued orally for respondents.

ADAIR, Chief Justice.

Suit in equity for the specific performance of a written agreement for the sale of mining claims and other property.

The defendant, The New Mine Sapphire Syndicate, is a corporation incorporated under the laws of the State of Montana. Its president R. H. Keller, its secretary George Pope, and its board of directors all reside in London, England.

Agreement. On May 24, 1950, the New Mine Sapphire Syndicate, a Montana corporation having its principal place of business in Stanford, Montana, vendor, and Thomas P. Sidwell of Billings, Montana, vendee, entered into a written agreement designated as 'Agreement for the Sale of Mines' wherein is described seventeen patented lode mining claims,--eleven patented placer mining claims and certain other patented lands, all situate in Judith Basin County, Montana, together with all buildings, improvements, easements, rights-of-way and appurtenances, and all ore bodies and alluvial deposits together with all machinery, fixtures, water rights, flumes and ditches upon and operated in connection with such mining claims and land.

President Keller signed on behalf of the vendor corporation. His signature was attested by George Pope, the corporation secretary.

The vendee, Thomas P. Sidwell, affixed his own signature to the agreement.

Section 2 of the agreement reads: 'The consideration to be paid the vendor shall be the sum of Sixty-Five Thousand Dollars ($65,000), in cash, lawful money of the United States; and the delivery by the vendee to the vendor of seventy-five thousand (75,000) shares of the capital stock of Yogo Sapphire Mining Corporation, having the par value of One Dollar ($1.00) each, and fully paid, and nonassessable; the said payment to be made at once upon the ratification of this agreement by the stockholders of the vendor corporation, and notice thereof to the vendee. Said sum of Sixty-five Thousand Dollars shall be paid to the credit of the vendor and C. T. Gadsden, of Moccasin, Montana, at the First National Bank of Lewistown, in Lewistown, Montana, and the said corporate stock shall be delivered to said Bank, to be delivered to the vendor, or its nominees, with the delivery of the bill of sale and the deeds for said property, all properly executed by the vendor by authority of its Board of Directors, and approved by a vote of at least two-thirds of its Stockholders, at a regularly called meeting of its Stockholders, called and held for the purpose of voting on the approval of this contract and said sale * * *

'Upon the payment of said money, and the delivery of said shares of stock, the vendee shall have the immediate right to enter into possession of said premises * * *' (Emphasis supplied.)

Pleadings. On August 17, 1951, Thomas P. Sidwell, as plaintiff, filed the original complaint herein, to which the defendants on September 6, 1951, interposed their joint demurrer, both general and special.

By successive court orders duly given, the hearing on the demurrer was first continued to December 10, 1951, then to December 31, 1951, then to January 14, 1952, then to January 28, 1952, on which latter date the hearing was had, the demurrer argued and time allowed for the serving and filing of briefs and thereafter on May 11, 1953, the district court made an order overruling the special demurrer but sustaining the general demurrer on behalf of each defendant and allowing plaintiff further time in which to file an amended complaint.

On June 9, 1953, the plaintiff served and filed his amended complaint, consisting of some 21 typewritten pages, plus five additional pages comprising Exhibit A, being a copy of the above agreement for the sale of the described property.

On June 12, 1953, the defendants interposed their joint demurrer, both general and special, to the plaintiff's amended complaint and on June 22, 1953, counsel for the respective parties orally argued such demurrer, following which, time was again allowed for filing briefs whereupon the demurrer was submitted for decision.

On September 9, 1953, the trial court overruled the special demurrer but sustained the general demurrer on behalf of each defendant without leave to further amend, following which, on motion of defendants' counsel the trial court, on September 12, 1953, rendered and caused to be entered its judgment in favor of defendants and against plaintiff, dismissing the amended complaint without leave to further amend and awarding defendants their costs in the sum of ten dollars.

From the judgment so entered the plaintiff Thomas P. Sidwell has taken this appeal.

Amended Complaint. The amended complaint sets forth the names of the directors and officers of the defendant corporation and avers that they all reside in London, England, and not in Montana and that at the times mentioned the capital stock of the defendant corporation was 175,000 shares of common stock of the par value of $1.00 per share.

In paragraph VI of the amended complaint is quoted this provision of the agreement for sale, viz.: 'It is understood by both parties hereto that this agreement constitutes a commitment by the Board of Directors of the vendor as a foundation for the submission of the said agreement to the Stockholders of the party of the first part at the meeting of Stockholders hereinabove referred to, which the Directors agree to call and hold at the earliest convenience, in accordance with the statutes of the State of Montana, where the said property lies; and will be binding when approved by the action of said Stockholders at such meeting.'

The amended complaint also avers that pursuant to the agreement, a meeting of the stockholders of the defendant corporation was duly called by its board of directors for July 3, 1950, for the purpose of considering and acting upon said agreement for sale; that notice of such meeting was duly given and published; that on July 3, 1950, there were present stockholders representing 135,775 shares of the outstanding stock of the defendant corporation; that said meeting was adjourned until July 13, 1950, at which adjourned meeting the same number of outstanding shares of stock were present or represented; that such stockholders did unanimously approve and ratify said agreement; that more than two-thirds of the outstanding stock of such corporation was present at such meeting, either in person or by proxy, and ratified such agreement and that plaintiff Thomas P. Sidwell was not notified of said stockholders' meeting and has not received any notice of any action taken at said meeting.

It is observed, however, that the plaintiff must have received notice, knowledge and information of the stockholders' meeting sometime and some place, otherwise he was in no position to so allege in his amended complaint.

The amended complaint further avers that in order to carry out the provisions of said agreement the plaintiff organized under the laws of Montana a corporation known as Yogo Sapphire Mining Corporation with a capital stock of $1,500,000, the shares having a par value of $1 per share; that plaintiff did agree with said Yogo Sapphire Mining Corporation, 'that all of the property, real and personal, listed and named in said agreement hereto attached and marked Exhibit 'A', would be by Plaintiff, transferred to said Yogo Sapphire Mining Corporation and that plaintiff did in writing, agree so to do, and that said agreement is still a valid and subsisting agreement, and in full force and effect.'

The amended complaint further alleges: That plaintiff was unable to get the abstracts of title to said property until early in the year 1951; that they were not brought down to date and that he paid for such continuation of such abstracts; that said abstracts were submitted to his attorneys in Billings who, on April 21, 1951, gave him a written opinion of eight typewritten pages which pointed out defects in the title which should be corrected before a good title could be conveyed and that the defendant corporation was advised of these defects in the title but has failed, neglected and refused to correct said defects.

The amended complaint further alleges: 'That on the 5th day of June, 1951, R. H. Keller, the President of the defendant corporation, advised H. Leonard DeKalb, Attorney at Law of Lewistown, Montana, who was acting on behalf of said defendant corporation, that there was no question in regard to the title and that the defects in the title would be remedied and clearly only if the plaintiff paid to said defendant corporation, the sum of Sixty-five Thousand Dollars ($65,000.00) * * *'

The amended complaint further states that plaintiff has had no opportunity to examine said property and was advised by the defendant C. T. Gadsden that no opportunity would be allowed plaintiff to examine the same and that the defendant C. T. Gadsden is the caretaker and managing agent of the defendants' property here involved.

The amended complaint also alleges: 'That plaintiff is advised and believes and therefore alleges that after said agreement (Exhibit 'A'), was executed, that the said R. H. Keller, President of the defendant corporation and the defendant C. T. Gadsden, conspired together to prevent plaintiff from going upon said properties or making any inspection or any sampling or any testing of said properties; that the said R. H. Keller, President of said defendant corporation and the said defendant C. T. Gadsden, conspired to compel the plaintiff to purchase said property and to pay the entire purchase price thereof without being allowed to view said premises, to inspect,...