Buckley v. Altheimer

152 F.2d 502, 1945 U.S. App. LEXIS 3163
CourtCourt of Appeals for the Seventh Circuit
DecidedDecember 17, 1945
Docket8690
StatusPublished
Cited by12 cases

This text of 152 F.2d 502 (Buckley v. Altheimer) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buckley v. Altheimer, 152 F.2d 502, 1945 U.S. App. LEXIS 3163 (7th Cir. 1945).

Opinion

*504 KERNER, Circuit Judge.

Plaintiff, individually and as administrator of the estate of Harry J. Stoops, deceased, brought this action against defendants for an accounting and to recover certain timber lands in Avoyelles Parish, Louisiana.

The case was tried by the court without a jury. Fourteen days were devoted to the trial of the case. Twenty-three witnesses testified for plaintiff, two of these by deposition, and many hundreds of exhibits were introduced. Defendant Altheimer testified in his behalf and he, too, introduced a large number of exhibits. Most of the facts are undisputed. At the conclusion of all the evidence, the court entered judgment against plaintiff and dismissed the complaint for want of equity. To reverse the judgment, plaintiff appeals.

During his lifetime, prior to 1928, Harry J. Stoops was engaged in the buying, selling and exchanging of real estate and in the buying and selling of mortgages on hotels and apartment buildings. Altheimer was admitted to the bar in Arkansas in 1898 and to the Illinois bar in 1909 and since that time has practiced law in Qiicago. In 1914 he entered into a partnership with Edwin B. Mayer. In 1924 or 1925 Stoops became a client of Altheimer & Mayer and that relationship continued through the year 1927, and during that period Stoops entrusted large and valuable property interests to their attention. In 1927 Stoops inquired of Altheimer if he knew anyone who held timber land mortgages and gas rights. Among the clients of Altheimer & Mayer at that time was one J. H. Hines of Memphis, Tennessee, who owned interests in the types of properties Stoops wanted to acquire. Altheimer introduced and brought Stoops and Hines together. At this time Hines was badly involved financially. He controlled a corporation known as J. H. Hines Co., Inc., which had the record title to a 10,600- acre tract of land, against which, since 1927, a foreclosure suit, foreclosing a bond issue of $150,000, had been pending in a federal court at Shreveport, Louisiana. Adjacent to this land was another tract of 15,000 acres, the title to which was in the National Lumber & Tie Corporation. Hines had an option to acquire this tract.

On February 1, 1928, Stoops and Hines entered into a contract respecting the various property interests owned by Hines, the terms of which were negotiated directly between Stoops and Hines and, after its terms had been agreed upon, at their request, Altheimer reduced their understanding to writing. By this contract Stoops agreed that within 50 days he would: 1. Respecting the bonds of J. H. Hines Company (a) pay off or discharge such of those bonds as were in the hands of others, and (b) pay off or discharge the debts of J. H. Hines Company secured by a deposit of such bonds. 2. Pay the amount due one James H. Allen for his interest in the 15,000 acre tract owned by National Lumber & Tie Company. 3. Furnish $150,000 to Tularosa Tie & Lumber Company. Should Stoops perform his part of the agreement, Hines agreed that he would convey and assign to Stoops the following: (a) Hines’ option to the 15,000 acre tract; Hines’ 250 shares of National Lumber & Tie Company stock; (b) fee simple title to the 10,600 acre tract of land; (c) one-half of the capital stock of Tularosa Tie & Lumber Company; and (d) one-half of the common stock-of Sacramento Tie Company.

It was Stoops’ plan, upon acquiring these lands, to place the title to the oil, gas and minerals in the 25,000 acres in a corporation to be formed under the name of Frost Oil & Gas Company, and to put the title to the land excepting the oil, gas and minerals in a corporation to be formed under the name of J. H. Hines Tie & Timber Company. This latter company was to put a trust deed on the 15,000 acre tract securing its bonds, for $300,000 and a trust deed on the 10,600’ acre tract for $200,000. The trust deeds- and bonds were executed and these Stoops, planned to sell. The corporations were formed and both were organized under the-laws of the State of Delaware, and the record title to the land became vested in the Tie & Timber Company and the mineral,, gas and oil rights were vested in the Frost. Company.

Prior to February 1, 1928, Hines had' owed Altheimer & Mayer $17,500 on his-note, secured in part by $12,500 Hines Company defaulted mortgage bonds, then in, foreclosure. These bonds were a part of the bonds which Stoops was to acquire and: cancel by his agreement of February 1. February 16, 1928, there came into Alt-' heimer & Mayer’s office drafts for $22,500,. having attached thereto 250 shares of National stock and $2,000 of the bonds of Hines Company. Stoops, having only $12,-500 to apply towards the payment of these-drafts, borrowed $10,000 of Altheimer andi *505 gave his note to Altheimer & Mayer for $22,500. Concerning this loan, Altheimer, in a memorandum to Mayer, wrote: “I agreed to advance him [Stoops] $10,000 provided he took over $12,500 of the bonds that were collateral to the Hines note to us at par.” The 250 shares of National stock and the Hines Company bonds were then put up as collateral for Stoops’ note for $22,500 to Altheimer & Mayer with a Chicago bank.

On March 9, 1928, the option to acquire the 15,000 acre tract was to expire. An extension of that option was obtained by turning over to National 125 shares of the 250 shares of that company’s stock securing Stoops’ note. The Chicago bank released the 125 shares when Daniel E. Frost, one of Stoops’ financial backers, advanced $5,000 upon Stoops’ note, thereby reducing the $22,500 note to $17,500. April 12, with $10,000 of Frost’s money and $5,000 of his own funds, Stoops further reduced his note to $2,500, and the Chicago bank released the remaining 125 shares of National stock. However, the extension of the option was again about to expire and Stoops was not able to pay Allen for his release or raise the $50,000 required to be paid to National. He requested Altheimer & Mayer to assist him. Altheimer & Mayer borrowed $50,000 upon their note from a Chicago bank and Altheimer prevailed upon Allen to look to him for the payment of Allen’s claim against National, which Allen was willing to release for $17,500. April 12, 1928, Stoops signed an agreement which provided that Altheimer & Mayer should hold the title to the 15,000 acres as security for their $50,000 advance and $10,000 of Allen’s claim, Stoops having given Allen his note for $7,500 for the balance due. By the agreement it was also provided that in the event title to the 15,000 acres and title to the oil and gas rights should be put in a corporation or corporations, all of the stocks and bonds of those companies should be held by Altheimer & Mayer as security for their advances. April 13, Altheimer delivered to National the remaining 125 shares of its stock, the releases of I lines and Allen, and a check for $50,000, and received in exchange therefor a deed for the 15,000 acre tract to Alan Altheimer, the nominee of Altheimer & Mayer. In the meantime, as already noted, Frost Oil & Gas Company and J. H. Hines Tie and Timber Company had been formed, and under the agreement of April 12, Altheimer & Mayer held all of the stock and bonds of these corporations as security for their advances.

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Cite This Page — Counsel Stack

Bluebook (online)
152 F.2d 502, 1945 U.S. App. LEXIS 3163, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buckley-v-altheimer-ca7-1945.