Vaughn v. Comet Consol. Mining Co.

• Citation: 39 P. 422,21 Colo. 54
• Parties: VAUGHN v. COMET CONSOL. MIN. CO. et al. [1]
• Decision Date: 05 December 1894
• Court: Supreme Court of Colorado

39 P. 422

21 Colo. 54

VAUGHN v. COMET CONSOL. MIN. CO. et al. ^[1]

Supreme Court of Colorado

December 5, 1894

Appeal from district court, Arapahoe county.

Action by Samuel V. Vaughn against the Comet Consolidated Mining Company and others. From a judgment dismissing the action plaintiff appeals. Affirmed.

This is a suit in equity by Samuel V. Vaughn against the defendants in error to set aside certain conveyances alleged to be fraudulent. The suit was originally brought on the 21st day of June, 1886, against the Comet Consolidated Mining Company the Upper Platte Mining & Smelting Company, Henry C. Frost J. Granville Sharp, Hugh Butler, and Edwin Pike, sheriff of Park county, Colo.; and on the 17th day of January, 1890 plaintiff filed an amended and supplemental complaint, making the other defendants in error parties. The facts upon which the right to this relief is predicated are substantially as follows: The Upper Platte Mining & Smelting Company was in 1882 the owner of certain mining claims, a tramway, and certain mill sites and other property. On December 23, 1882 the company became indebted to appellant, James C. Hale, H. C. Frost, and Richard Le Bert in the sum of $14,000, and, as evidence of such indebtedness, executed to these parties its promissory notes for the proportion of such indebtedness due each of them respectively,--to appellant, two notes for $1,250 each, due in 9 and 15 months, and one for $1,000, due in 12 months after date; and like notes to James C. Hale, who afterwards assigned the same to appellant. On June 8, 1881, the company executed a power of attorney to Hugh Butler and J. Granville Sharp, conferring upon them the full management of its property, and empowering them to sell, lease, or otherwise dispose of the same, and to execute and deliver deeds, receive and receipt for purchase money, etc. On March 22, 1883, the company, by Butler & Sharp, attorneys in fact, conveyed all its property to the Comet Consolidated Mining Company for and in consideration of its entire capital stock, consisting of 90,000 shares, of the par value of $10 each. The Comet Consolidated Mining Company was incorporated by James F. Matthews, C. L. Webb, and Henry C. Frost, for the purpose of taking title to the property of the Upper Platte Mining & Smelting Company, and to provide, by the sale of a portion of its stock, for the payment of the indebtedness of that company, and placed in escrow 36,000 shares for that purpose. At the time of the transfer of title to the Comet Consolidated Mining Company, Matthews, Webb, and Dillingham entered into an agreement to purchase this stock, and thereby furnish means for the working of the property and the payment of these debts. They paid the sum of $1,500 to Butler & Sharp, but failed to carry out their agreement any further; whereupon the Comet Consolidated Mining Company continued to work upon the property during the years 1883 and 1884, and incurred an indebtedness thereby which they had no funds to pay. This indebtedness consisted of $1,000 borrowed by the company from Hudson, and $6,687.77 for labor, materials, etc. For the latter amount the company gave its note to Frost. The appellant and Hale, who were then residing in Missouri, received notice of this transfer to the Comet Consolidated Mining Company by letter from Sharp, dated March 27, 1883, which letter also contained an offer on the part of Sharp, in pursuance of a previous agreement, to assign, as collateral security to appellant and to the other parties holding the notes of the company, $20,000 worth of his stock in the new company. The only response to this notification appearing in the record is the statement of Sharp in a letter written by him to Le Bert April 18, 1883, to the effect that he had received a letter from Mr. Hale worded as follows: 'I suppose nothing will be lost by waiting until I get to Colorado the change our securities. I shall be up the gulch some time the coming spring.' Afterwards, and on May 19, 1884, the appellant commenced suit in the district court of Arapahoe county against the Upper Platte Mining & Smelting Company, upon the notes held by him, for the sum of $7,000, and caused a writ of attachment to be issued and levied upon the property in controversy, and also caused garnishee process to issue against Butler & Sharp to subject the Comet Consolidated Mining Company stock received by them in purchase of the property to the payment of his claim. On April 22, 1886, judgment was rendered for $9,162, and the attachment sustained. On November 18, 1886, the Roswell Mining Company was duly incorporated under the laws of this state. On December 20, 1885, Hudson commenced suit by attachment in the county court of Arapahoe county against the Comet Consolidated Mining Company, and recovered judgment, March 22, 1886, for the sum of $633.07, the unpaid balance loaned by him to the company. Execution was issued to the sheriff of Park county, and levied upon the property in controversy, which was sold to the Roswell Mining Company thereunder on December 18, 1886; and in pursuance of said sale, on September 19, 1887, the sheriff conveyed the property to the Roswell Mining Company. In December, 1885, Frost instituted suit and sued out a writ of attachment on his note against the Comet Consolidated Mining Company, and obtained judgment. Execution issued thereon, and the property was sold in pursuance thereof on February 27, 1886, and was bought in by Frost, and conveyed to him by sheriff's deed, dated November 29, 1886. On November 29, 1886, Frost conveyed this title to Roswell P. Brown, who afterwards and on December 6, 1886, conveyed the same to the Roswell Mining Company. On October 28, 1887, the Comet Consolidated Mining Company executed its deed for the property in question to the Roswell Mining Company. On March 29, 1887, the Ashtabula Mining Company was duly organized;and on Arpil 2, 1887, the Roswell Mining Company conveyed its title to the property in question to it. On December 14, 1887, the Plymouth Rock Mining & Smelting Company was duly organized; and on December 15, 1887, the Ashtabula Mining Company conveyed its title to the property in question to the latter company. On June 4, 1884, Richard Le Bert brought a suit...