Reinoehl v. Vervaeke

82 P.2d 861, 196 Wash. 348
CourtWashington Supreme Court
DecidedSeptember 29, 1938
DocketNo. 27136. Department Two.
StatusPublished
Cited by3 cases

This text of 82 P.2d 861 (Reinoehl v. Vervaeke) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reinoehl v. Vervaeke, 82 P.2d 861, 196 Wash. 348 (Wash. 1938).

Opinions

Blake, J.

— These cases involve the ownership of certain mining machinery and equipment now located upon mining claims in Stevens county, owned by defendants. What we regard as the controlling facts are not in dispute.

July 25, 1934, the defendants executed and delivered to one Quackenbush, “his successors and assigns,” an option to purchase the claims for $75,000, payable $5,000, August 13, 1934, and $1,500, February 1, 1935. *350 (With subsequent payments due under the option, we are not concerned.) The agreement provided that, in case of default by the optionee, all payments made under the option “and all work done and improvements placed upon said property shall he and remain the property” of the optionors.

On August 17, 1934, Quackenbush leased to one Wickstrom “the surface dumps and backfills in stopes, tunnels and drifts,” on certain of the claims, for a term of five years, with rights of extension upon fulfillment of conditions with which we are not concerned. This lease contained the following covenant on the part of the lessee:

“At the expiration or sooner termination of this agreement to surrender said premises, and leave thereon all of the machinery, including Diesel power, tools and equipment now on said premises or brought thereon by the lessee to be used in the execution and performance of this agreement, the title and ownership to which shall automatically vest in the lessor when the same is brought upon the premises; Provided, however, that trucks, camping equipment, personal effects and ore handling equipment and secondary, accessory, or portable milling equipment is excluded from the provisions hereof and may be removed from the demised premises by the lessee at the termination of this agreement.”

Through Wickstrom, one Crawford, a member of the law firm of Cuthell, Hotchkiss & Mills, of New York City, became interested in working the properties covered by the lease from Quackenbush. Crawford organized the Perdiver Mining Corporation, of which he became a trustee and Wickstrom president. The lease from Quackenbush was assigned to the corporation. The Perdiver Corporation purchased a large amount of machinery and mining equipment, which was installed on the property. A part of the machinery so installed consisted of a Diesel engine *351 and five motors, with appurtenances, purchased under conditional bill of sale from Cascade Machinery & Electric Company. The purchase price was five thousand dollars. The engine was installed on a concrete base, to which it was attached by bolts embedded in the concrete.

The Perdiver Corporation operated under its lease from Quackenbush until March, 1935. In the meantime, Quackenbush having failed to make the payment of fifteen hundred dollars due under the option on February 1st, the defendants declared a forfeiture and entered into possession of the property.

The Perdiver Corporation had by then made all but the last payment, amounting to $850 and interest, due under its contract with Cascade Machinery & Electric Company. The former was also indebted to the latter on open account, in the approximate sum of four hundred dollars. Through Lawrence H. Brown, who had been representing the Crawford and Perdiver interests locally, arrangements were made to pay this open account and the balance due under the conditional sales contract. The transaction was handled in the following manner: Cascade Machinery & Electric Company drew a draft on Martin J. Her, the real and one of the named plaintiffs in the first of these actions, for $1,283.48. Accompanying the draft was an assignment to Her of the conditional sales contract, and also a bill of sale transferring to him the Diesel engine, motors, and appurtenances. The bill contained a warranty of title, “save claims by Perdiver Mining Company.”

In the meantime, it appears that the law firm of Cuthell, Hotchkiss & Mills, had been reorganized as Cuthell, Appleby, Osterhout, Crawford & Mills. Martin J. Her was a member of the staff. So it may be assumed that, in carrying out the transaction with *352 Cascade Machinery & Electric Company, Her was acting as agent for Crawford and the people he represented.

The first of the above entitled actions was instituted by Her to recover possession of the property to which he acquired title under the bill of sale from Cascade Machinery & Electric Company. From judgment dismissing the action, he appeals.

There are several theories upon which it is thought this judgment can be sustained. Before discussing them, it is well to note that the title to the property never passed to the vendee, Perdiver Mining Corporation. It remained in Cascade Machinery & Electric Company until transferred to Her.

But respondent says that, under the circumstances, Her acquired the title in trust for Perdiver Mining Corporation. There is, however, no evidence that Her made the final payment with funds of the mining company. On the contrary, it is clear that the money with which the payment was made was furnished by him or his principals, as individuals. That they were interested in the Perdiver Corporation, did not preclude them from paying the balance due under the conditional bill of sale and taking title to the property. Nor does the fact that Crawford was a trustee of the mining company alter the right. See Kidder v. Wittler-Corbin Machinery Co., 38 Wash. 179, 80 Pac. 301. It may well be that, as to creditors of the company, they would be held accountable as trustees of the property. But, even so, they would not be required to surrender the property until they had been reimbursed in the amount they paid on the purchase price. Duarte v. Minnick, 85 Wash. 539, 148 Pac. 600.

It is suggested that the judgment may be sustained under the trust fund doctrine, because the *353 mining company was insolvent. But that doctrine can be invoked only at the behest of creditors of the company. And respondents are not creditors of the Per-diver Mining Corporation. There was no contract between it and them. Their claims are based solely upon the forfeiture clause contained in their option to Quackenbush. It was upon his default, not Perdiver’s, that respondents declared a forfeiture and took possession.

There is a suggestion that Quackenbush forfeited the lease to Perdiver Corporation. The record, however, discloses nothing more than an abortive attempt on his part to declare a forfeiture.

No doubt, under the holdings of this court, the Diesel engine and motors constituted improvements, as contemplated by the option from respondents to Quackenbush. Siegloch v. Iroquois Mining Co., 106 Wash. 632, 181 Pac. 51. But they were not fixtures. Reeder v. Hudson Consolidated Mines Co., 118 Wash. 505, 203 Pac. 951.

Respondents’ right to claim “improvements,” under their option to Quackenbush, is wholly dependent upon Quackenbush’s right to retain the property under the above quoted clause of his lease to Perdiver Corporation.

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Bluebook (online)
82 P.2d 861, 196 Wash. 348, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reinoehl-v-vervaeke-wash-1938.