Florey v. Sinkey

362 P.2d 271, 77 Nev. 275, 15 Oil & Gas Rep. 298, 1961 Nev. LEXIS 117
Nevada Supreme Court·Decided June 2, 1961·No. 4351·Published·Cited by 5 cases

Opinion

*276 OPINION

By the Court,

Pike, J.:

This is an appeal from a judgment entered in favor of respondent, against each appellant, for the sum of $8,400 as compensation due respondent for having procured one Kaufmann as a purchaser of a mining property owned by appellants. Appellants were the owners of a group of tungsten mining claims in Mineral County, Nevada, known as the Silver Dyke property. On April 1, 1955, by written agreement, appellants agreed to sell the property to one Kaufmann for the sum of $300,000. Kaufmann as purchaser delivered to appellants a promissory note for $50,000 as well as other promissory notes and certain corporate stock on account of the agreed purchase price. The $50,000 note was subsequently paid by Kaufmann and after Kaufmann had been adjudicated bankrupt the other notes were submitted by appellants as claims in the Kaufmann bankruptcy. Kaufmann operated the mining property for several months and removed ore of considerable value, upon which he also paid $34,000 in royalties to appellants.

The sale by appellants to Kaufmann had the following factual background. Kespondent Sinkey was president of Nevada Tungsten Corporation which owned a tungsten mill in Mineral County. He introduced appellant Chauncey Florey to one James Keyser, a mining engineer and prospective purchaser of the Silver Dyke properties. Thereafter Keyser and his associates organized the Industrial Tungsten Corporation, of which Keyser was president and a director, and of which said Kaufmann was also a director. On February 8, 1955 said corporation entered into a written agreement as purchasers, with Florey and the other appellants as sellers, to purchase the Silver Dyke properties for $400,000, and on March 11, 1955 a supplemental agreement was *277 entered into between the same parties and a note for $50,000 payable to appellants herein executed by Industrial Tungsten Corporation and endorsed by Keyser and Kaufmann was attached to the same. Kaufmann in the meantime had succeeded Keyser as president of the corporation.

On April 1, 1955 appellants and Industrial Tungsten Corporation executed an agreement canceling the agreement of sale between them dated February 8, 1955, Kaufmann signing as president of the corporate signatory. On the same date, Kaufmann and appellants entered into the agreement between them hereinabove referred to. On account of the agreed sale, 400,000 shares of Industrial Tungsten Corporation stock were issued and delivered to appellants, together with the said $50,000 promissory note of that corporation, bearing the endorsements of Keyser and Kaufmann, and certain other promissory notes as part of the agreed purchase price to be paid by Kaufmann. Kaufmann was adjudged bankrupt. There is nothing in the record showing that appellants ever received any cash from the corporate stock, or from the notes filed in the Kaufmann bankruptcy. The $50,000 received as payment of the promissory note, and the royalties of $34,000, or a total of $84,000, were received by appellants as a result of the sale of Kaufmann.

On July 25, 1957 respondent, as plaintiff, brought action against appellants, alleging that appellants promised to pay Sinkey the reasonable value of his services if Sinkey would procure a purchaser for the mining property; that by reason of Sinkey’s informing Kauf-mann and interesting him in the purchase, the agreement of April 1, 1955 had been entered into between appellants and Kaufmann and that appellants had received substantial sums of money from Kaufmann under said agreement. Sinkey sought judgment against appellants for $30,000. Appellants’ answer denied having entered into the agreement to pay any compensation to Sinkey, and alleged as additional defenses (1) that Sinkey acted as agent for Kaufmann without the knowledge or consent of appellants; (2) that Sinkey secretly *278 participated in the purchase of the property; and (3) that Sinkey realized a secret profit from the purchaser of the property, without the knowledge or consent of appellants. In connection with the last-mentioned defenses, evidence was introduced showing that some 182,994 shares of Industrial Tungsten Corporation stock were issued to Sinkey on February 18, 1955. Sinkey denied having received the stock.

Upon conflicting evidence the trial court found in favor of respondent and against appellants upon the issues referred to, and entered the judgment herein appealed from.

The court found that there was an agreement between Florey and Sinkey whereby Sinkey undertook to find a buyer for the mining properties; that he made trips and contacted persons and firms with venture money in efforts to interest them in such purchase; that he conducted prospective purchasers to the mining properties; that Sinkey spent some of his own funds in connection with such efforts. The court reviewed the several agreements entered into and found that it was not established that the Industrial Tungsten Corporation stock was delivered to Sinkey and found that stock had no value “at any time”; that on October 1, 1955 Nevada Tungsten Corporation and Kaufman agreed that Kauf-mann would cause tungsten ore to be milled at the corporation’s mill; that the evidence established the existence of a custom in the particular Nevada locality which provided that the seller of mining property should pay 10 percent of the consideration actually received by him to the person who was the procuring cause of the sale, and that said custom was sufficiently known to charge Florey with constructive knowledge of the same; that Sinkey was the procuring cause of the sale of the properties to Kaufmann, who paid $84,000 to appellants; that although the evidence did not establish that appellants agreed to pay Sinkey a definite amount as a commission, there was an implied agreement to pay Sinkey the reasonable value of his services; that the reasonable value of the services performed by Sinkey was *279 $8,400; that Sinkey had not acted as agent for Kauf-mann and had not secretly participated in the purchase of appellants’ property without the knowledge or consent of appellants.

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Florey v. Sinkey, 362 P.2d 271, 77 Nev. 275, 15 Oil & Gas Rep. 298, 1961 Nev. LEXIS 117 (Neb. 1961).

362 P.2d 271 (Florey v. Sinkey) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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