Zorn v. Sweet

• Decision Date: 28 February 1931
• Docket Number: 4993
• Citation: 296 P. 242,77 Utah 389
• Court: Utah Supreme Court
• Parties: ZORN v. SWEET et al

296 P. 242

77 Utah 389

ZORN v. SWEET et al

No. 4993

Supreme Court of Utah

February 28, 1931

Appeal from District Court, Third District, Salt Lake County; James H. Wolfe, Judge.

Action by Wilhelmina Zorn against C. N. Sweet and others. From a judgment dismissing the action, plaintiff appeals.

AFFIRMED.

J. D Skeen and E. J. Skeen, both of Salt Lake City, for appellant.

Willard Hanson and A. H. Hougaard, both of Salt Lake City, for respondents.

ELIAS HANSEN, J. CHERRY, C. J., and STRAUP, FOLLAND, and EPHRAIM HANSON, JJ., concur.

OPINION

ELIAS HANSEN, J.

The sole question presented on this appeal arises upon a demurrer which denies that plaintiff's complaint states a cause of action. The demurrer was sustained and the action dismissed. Plaintiff appeals and assigns such rulings as error. The complaint reads as follows:

"Plaintiff complains of defendants, and for cause thereof alleges:

"I. That on the 4th day of October, 1923, at Salt Lake City Utah, plaintiff and defendants entered into a contract in writing, in words and figures following, to wit:

"'Agreement

"'Whereas the Superior Dredging Company, a corporation of Nevada, owns approximately 1200 acres of valuable gold placer ground in Baker County, Oregon; and

"'Whereas, the said Superior Dredging Company has contracted with Sweet Brothers, consisting of C. N. Sweet, W. H. Sweet and F. A. Sweet, of Salt Lake City, Utah, for the improvement of said property and the placing thereon of improved machinery, consisting of a modern gold dredge, the construction of an electric power line and the making of other improvements for the recovery of the gold from said property; and

"'Whereas, said Sweet Brothers, under the terms of their contract, reserve title to said dredge and other improvements made until they shall have recovered from said placer grounds, sufficient net profits from gold recovered to repay them for all advancements made for the purposes herein stated;

"'Now, therefore, the said Sweet Brothers hereby sell and deliver to Minnie Zorn, 2000 shares of the Superior Dredging Company, aforesaid, evidenced by certificate No. 1293 for the sum of $ 2,000.00 and agree with the purchaser that said money will be expended towards making the improvements mentioned herein and that said Sweet Brothers will reimburse to said purchaser an amount equal to the purchase price mentioned above from the net profits received from the recovery of gold, as aforesaid, as fast as recovered and in proportion as the above sum bears to the total amount expended by Sweet Brothers in making all of the advancements necessary for the purposes above mentioned.

"'Sweet Brothers

"'By F. A. Sweet.

"'Salt Lake City, Utah,

"'October 4, 1923.'

"II. That at the time of the execution of said contract, on the 4th day of October, 1923, plaintiff paid to the defendants Two Thousand ($ 2,000.00) Dollars in lawful money of the United States, and received from them Certificate of Stock No. 1293 of the Superior Dredging Company for two thousand (2,000) shares of its said stock, and thereafter plaintiff is informed that defendants placed dredging machinery upon the placer ground referred to in said agreement, and operated the same until about the month of June, 1926, at which time they discontinued the operation thereof, and on or about the 14th day of May, 1927, sold and disposed of said equipment.

"III. That during the operation of said machinery, and from the profits derived therefrom, defendants paid to plaintiff the sum of Three Hundred ($ 300.00) Dollars; that, although often requested, defendants have failed, neglected and refused to pay to plaintiff the balance of the said Two Thousand ($ 2,000.00) Dollars, amounting to the sum of Seventeen Hundred ($ 1,700.00) Dollars, or any part thereof that by the sale of said equipment, on the said 14th day of May, 1927, defendants put it out of their power to make further profits from the operation of the said dredging machinery, and the said Seventeen Hundred ($ 1700.00) Dollars, constituting the balance of the said Two Thousand ($ 2,000.00) Dollars, as aforesaid, thereupon became immediately due and payable to plaintiff.

"Wherefore, plaintiff prays judgment against the defendants jointly and severally for the sum of Seventeen Hundred ($ 1700.00) Dollars, with interest thereon at the rate of eight per cent (8%) per annum, from the 14th day of May, 1927, and for costs."

Plaintiff's contentions are thus stated in her brief:

"1. The agreement set forth in the complaint must be construed as creating an absolute obligation on the part of the defendants to re-imburse the plaintiff.

"2. If the court considers the agreement uncertain or ambiguous as to whether the obligation to re-imburse the plaintiff was absolute or conditional, it is contended that the allegations in the complaint which present the plaintiff's construction of the instrument, must upon general demurrer be assumed to be true, in which case the complaint sets forth facts stating a cause of action on an absolute promise to pay.

"3. If the agreement be construed as creating an obligation conditioned upon the receipt of net profits from the recovery of gold, it is contended that the complaint states a cause of action based upon the rule that where an obligor, who is obligated to pay from a fund which it is his duty express or implied to create, puts it out of his power to create the fund, he is liable."

In support of such contentions the following cases and authorities are cited: Johnston v. Schenck, 15 Utah 490, 50 P. 921; McIntyre v. Ajax Mining Co., 20 Utah 323, 60 P. 552; Id., 28 Utah 162, 77 P. 613; Busby v. Century Gold Mining Co., 27 Utah 231, 75 P. 725; White v. Mining & Milling Co., 28 Utah 331, 78 P. 868; Pritchard v. McLeod (C.C.A.) 205 F. 24; 3 Page on Contracts (1st Ed.) § 1443; Genet v. Canal Co., 136 N.Y. 593, 32 N.E. 1078, 19 L.R.A. 127; Keck v. Bieber, 148 Pa. 645, 24 A. 170, 33 Am. St. Rep. 846; Lovell v. St. Louis Mutual Life Ins. Co., 111 U.S. 264, 274, 4 S.Ct. 390, 28 L.Ed. 423; Millan v. Bartlett, 69 W.Va. 155, 71 S.E. 13.

The defendants contend that under the contract relied upon by the plaintiff they are under no obligation to repay to plaintiff any of the money received by them from her unless and until such money is secured from net profits of gold recovered from the development of the property belonging to the Superior Dredging Company. Defendants cite the following cases and authorities in support of their contention: 13 C. J. 631 § 701; Frank et al. v. Butte & Boulder Mining & Lumber Co., 48 Mont. 83, 135 P. 904; Great Western Oil Co. v. Carpenter, 43 Tex. Civ. App. 229, 95 S.W. 57; Lyman v. Northern Pac. Elevator Co. (C. C.) 62 F. 891; Young v. Smith, 202 Pa. 329, 51 A. 890; Palmer v. Guillow, 224 Mass. 1, 112 N.E. 493; Meurer v. Kilgus, 86 N.J.L. 243, 90 A. 1011; Arment et al. v. Yamhill County, 28 Ore. 474, 43 P. 653; Dunyon v. Scranton...