Hedges v. Mountjoy

164 A.D. 444, 149 N.Y.S. 869, 1914 N.Y. App. Div. LEXIS 7796
CourtAppellate Division of the Supreme Court of the State of New York
DecidedNovember 13, 1914
StatusPublished
Cited by1 cases

This text of 164 A.D. 444 (Hedges v. Mountjoy) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hedges v. Mountjoy, 164 A.D. 444, 149 N.Y.S. 869, 1914 N.Y. App. Div. LEXIS 7796 (N.Y. Ct. App. 1914).

Opinion

Laughlin, J.:

The correctness of the interlocutory judgment depends upon the construction of two agreements in writing, to the first of which the plaintiff was not a party but acquired an interest therein by assignment. That contract was executed in triplicate by and between M. L. Hellings, J. P. McNaughton and S. S. Yoder on the 21st of March, 1901. It recites that the parties intended to purchase certain lands, leases and mineral rights in Indian Territory from the Indians, for which purpose and for incidental expenses also, Hellings agreed to furnish the money, title to be taken in his name and to be held for the benefit of the parties and of the defendant, whose respective interests were agreed upon as follows: Hellings and Yoder were each to have thirty-five one-hundredths, McNaughton twenty one-hundredths and the defendant ten one-hundredths. It was further therein expressly provided that Hellings was to take title with the distinct agreement and understanding that it is only for the reimbursement to him [445]*445of all moneys paid, with six per cent interest,” and that it was to he held in trust by him for the benefit of the parties, as already stated; and that, after the purchase of the property, sales and leases should be made by Hellings to an extent sufficient to reimburse him for the amounts advanced with interest, “ or such amount as he shall have paid as purchase money,” and that after he should be reimbursed from the sales or leases “as purchase money, or expenses, with interest,” he was to convey to the parties, including himself and defendant, “or such corporation or corporations, individuals or individual as may be designated by majority of the parties hereto the remainder of said lands, including both the lands conveyed in fee simple and the leasehold land,” and that their interests should be as already stated.

It appears that pursuant to the provisions of this agreement, Hellings purchased a large tract of land and took title in his own name; and then died without having sold or leased any part of it or having been reimbursed for any part of the purchase price or expenses. In the meantime plaintiff had acquired one-half of McNaughton’s interest, or ten one-hundredths, and the defendant purchased Yoder’s interest, making his interest forty-five one-hundredths.

Thereafter and on the 17th day of January, 1911, the plaintiff, defendant and McNaughton, who together then owned all interests under the original agreement, with the exception of the Hellings interest, entered into an agreement in writing, the defendant being the party of the first part and the plaintiff and McNaughton being parties of the second part, reciting the making of the original agreement, the purchase of lands by Hellings thereunder, the death of Hellings, leaving a last will and testament, and the further change of interests as hereinbefore stated; and the plaintiff and McNaughton thereby assigned all their right, title and interest in and to the original agreement to defendant, and released the executors of the estate of Hellings from any and all liability thereunder, and defendant agreed to bring such action or proceeding in the courts of the State of Oklahoma as might be necessary to permit the executors of Hellings to carry out the terms of the original agreement and “to permit them to convey a good and sufficient [446]*446title to the lands therein mentioned and described,” and that upon obtaining a final decree authorizing the executors to carry out such agreement or to convey the lands, he would “immediately convey such of the said lands as he may deem advisable as soon as title thereto shall be legally determined and vested in him to one or more corporations to be organized to hold and develop the said lands.” Then came the remaining provisions of the agreement, which are as follows: “It is further agreed and understood by and between the parties hereto that the said J. P. McNaughton and Charles Hedges shall each be entitled to receive 10$ of the total authorized capital stock of the said corporation or corporations, and of the lands not conveyed to corporations, subject, however, to the payment by the said McNaughton and Hedges to the said party of the first part of Ten per cent each of such sum or sums of money as the party of the first part may be obliged to pay to the executors of said M. L. Hellings, deceased, under and pursuant to the aforementioned agreement, and all costs and expenses necessarily incurred in such court proceedings, as the party of the first part may be obliged to make in respect to the said agreement and land. Said party of the first part shall have the right to mortgage the said lands to pay the said sum or sums of money necessarily expended by him as aforementioned, in which event the interest of the parties in the equity shall be in the same proportion as they would otherwise have had in the land.” After making this agreement the defendant acquired McNaugh ton’s interest, thus giving him fifty-five one-hundredths.

The testimony of the plaintiff and defendant, which was received without objection, that the negotiations were merged in the writing, doubtless on account of the prayer for reformation of the contract, is in accord to the effect that the negotiations preceding the execution of said agreement of January 11, 1911, contemplated that the defendant was to acquire full title from the executrix and executor of Hellings, free from any equity on account of Hellings’ interest in the original agreement, and was to acquire the Hellings’ equity for himself, so that he would take Hellings’ place in the joint adventure. It will be seen from the first agreement that Hellings’ advances and disbursements were [447]*447first to come out of the lands and leases purchased, by a sale or other disposition thereof, and the parties to the agreement and the defendant were to own the remaining equity in the proportions specified. If, therefore, the original plan by which Hellings was to be reimbursed out of the proceeds of sales was not carried out, it is manifest that neither he nor his estate was entitled to be reimbursed by the other parties in interest for the full amount of his advances and disbursements, but only for an amount proportionate to their interests, and thus he or his estate would be obliged to bear thirty-five one-hundredths of such advances and disbursements, and, on being reimbursed by the other parties in interest for the remaining sixty-five one-hundredths of such advances and disbursements, the parties would hold the property in the proportion of their respective interests as specified in the original agreement, or derived therefrom by assignments of interests, free from any claim by Hellings or the representatives of his estate for the advances or disbursements made by him. The agreement of January 17, 1911, does not, or, at least, does not as clearly as did the negotiations preceding its execution, indicate that the entire Hellings interest, both for advances and disbursements and in the equity, was to be acquired by the defendant, either for himself, or for himself and plaintiff and McNaughton; and it is consistent with an intention on the part of the parties that he was merely to adjust the claim of Hellings’ executors for advances and disbursements and to acquire the legal title to enable him to convey the property to a corporation or to the parties in interest, but that all parties in interest were to retain their fractional equitable interest as before.

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Bluebook (online)
164 A.D. 444, 149 N.Y.S. 869, 1914 N.Y. App. Div. LEXIS 7796, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hedges-v-mountjoy-nyappdiv-1914.