Andrieux v. Kaeding

181 N.W. 59, 47 N.D. 17, 1920 N.D. LEXIS 84
CourtNorth Dakota Supreme Court
DecidedDecember 14, 1920
StatusPublished
Cited by11 cases

This text of 181 N.W. 59 (Andrieux v. Kaeding) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Andrieux v. Kaeding, 181 N.W. 59, 47 N.D. 17, 1920 N.D. LEXIS 84 (N.D. 1920).

Opinions

Grace, J.

This action is one to recover the sum of $3,000, paid to Bessemer Iron Mining Company, while relying upon false and fraudulent representations of defendant, relative to the amount and value of iron ore deposits in certain property, known as the Bessemer Iron Mining Company, a corporation, part of the corporate stock of which was purchased by plaintiff.

The material facts are as follows:

The Crow Wing Iron Company was the owner of the north £ ol the southeast of section 6, township 46, range 29, Crow Wing county, state of Minnesota. The land is in the vicinity where iron ore is found and produced. The Crow Wing Iron Company drilled this property in the year 1911. It does not appear that anything more was done with the property until 1917, when the same was leased to the Bessemer Iron Mining Company, of which one Rydberg was an officer.

The latter company, in 1917, did more drilling on the land. In June of that year the defendant, with other parties, were taken to see the property. Negotiations continued between Rydberg and those parties until October, 1917, when the defendant and other parties of Minneapolis were again taken to see the property. At this time the drilling was finished and some buildings had been constructed, and a shaft was being sunk in the vicinity where some of the drilling had been done. Northeast of this mine, about a mile and a quarter, was the Bay mine, where the shaft had been completed, and from which ore was about to be taken.

Surrounding the Bay mine are other mines, including the Barrell and the Merritt mines, some of which were producing what is denominated manganiferous or manganese ore. Not long after this, the parties from Minneapolis made a contract with the Bessemer people, claimed to be similar to the one into which plaintiff and his associates entered, the only difference claimed was the amount in the first payment, which was less than that provided in the contract which plaintiff signed.

It is claimed that defendant and one Michael paid their first pay[20]*20ment of $500, but the other parties did not make their payments, and the contract was canceled.

In the late fall, in October or November, the defendant met one Vikan of Bottineau, in Minneapolis, and they had some conversation with reference to this mining proposition. Handing desired him to bring the matter before parties of Bottineau, with the view of interesting them in the proposition.

Vikan did talk with some parties at Bottineau, and Mr. Smithson went to Minneapolis, made some investigation of the property and conditions, and wrote Vikan thereafter; and sometime after January 9, 1918, after Smithson had talked with defendant, and had some conversation with reference to the latter going to Bottineau, to raise the money for the purpose of sinking a shaft, he did go to Bottineau, and on about the 16th day of January entered into a certain contract. After this contract was signed, one Moline, a contractor, was selected by the parties to take charge of the sinking of the shaft.

After this, and before any money was paid, and at the request of defendant, plaintiff and three other parties to the contract went to the location of the mine for the purpose of investigating the same. They also went to Duluth and had some talk with the manager of the Fay mine, and on the 23d day of January went to Minneapolis, and entered into the contract upon which this action is based, which superseded the contract of January 16th.

The Bessemer Iron Mining Company had a mining lease from the Crow Wing Iron Company, on the land above described. On the 4th day of January, 1918, the former entered into a contract with the defendant and one Michael, whereby it agreed to issue and sell to them, or such other parties as became interested with them, 170,000 shares of the capital stock of that corporation, for the sum of $30,000. That company, according to recital in the contract, theretofore had issued and sold, for promotion and development purposes, 167,915 shares of its capital stock.

The purpose declared in the contract for selling 170,000 shares of stock was the sinking and constructing on the land a. shaft, which was to be 100 feet deep, if necessary, and 6 feet wide and 12 feet long, and this for a proper exploration of the property.

Under the contract, the shaft was to be constructed under the joint [21]*21direction of all the parties to that contract. The contract contained this further provision: “In consideration of all the covenants of the party of the first part, herein contained, it is further agreed by all of the parties to this contract, that if merchantable ore shall be found upon the property above described, by the sinking of said shaft, in such quantities and quality as to warrant the mining thereof, then said parties of the second part, and said persons selected by said second parties, to become interested with them, may, upon their option, pay to said party of the first part the difference between the total amount of money advanced by said parties of the second part, and those to be hereafter -interested with them, as herein contemplated, for the construction of said shaft, in the sum of $30,000, and that, then, thereupon there shall be issued to said parties of the second part, and those to become interested with them, as herein contemplated, 170,000 shares of the capital stock of said party of the first part, divided between the parties of the second part, as their several interests shall appear,' according to the amount advanced by each of them.”

If, upon the completion of said shaft, merchantable ore in sufficient quantity and quality to warrant the mining thereof shall not be found upon said property, then and thereupon it is agreed by and between the said parties that said party of the first part shall issue to said party to the second part, and divided equally among them, and those interested with them, such shares of the capital stock of the party of the first part as will be paid for by the total amount of money advanced by said parties of the second part, and those interested with them, for the construction of said shaft, at the rate of $30,000 for 170,000 shares.

This contract was signed on the part of the Bessemer Iron Mining Company, by Rydberg, president, and Donahue, secretary, and by Kaeding and Michael, as the other contracting parties. This contract was incorporated into and made a part of the contract involved in this suit, and is executed by Kaeding and Michael, as parties of the first paid, and Joseph Andrieux, of Bottineau, and seven other prominent men of that city, engaged, largely, either in the banking or mercantile business, as parties of the second paid. The contract provided that upon signing thereof, each of the parties of the second part should pay into the treasury of the Bessemer Iron. Mining Company the sum of $1,000, and thereupon there should be issued to him a certificate of [22]*22stock of that company, in the sum of $5,000; .that on the 1st day of March, 1918, each of the second parties should pay into the treasury the further sum of $500, and a further certificate of stock should be issued to each in the sum of $2,500; and that thereafter the second parties would each pay into the treasury of the corporation, as the same might be required for development purposes, and for the purpose of putting the mining project in operation, such further sums until each had paid into the treasury the total sum of $3,000.

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Cite This Page — Counsel Stack

Bluebook (online)
181 N.W. 59, 47 N.D. 17, 1920 N.D. LEXIS 84, Counsel Stack Legal Research, https://law.counselstack.com/opinion/andrieux-v-kaeding-nd-1920.