Smith v. Barnes

149 P. 963, 51 Mont. 202, 1915 Mont. LEXIS 90
CourtMontana Supreme Court
DecidedJuly 7, 1915
DocketNo. 3,528
StatusPublished
Cited by22 cases

This text of 149 P. 963 (Smith v. Barnes) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Barnes, 149 P. 963, 51 Mont. 202, 1915 Mont. LEXIS 90 (Mo. 1915).

Opinion

MR. JUSTICE SANNER

delivered the opinion of the court.

The complaint alleges that on June 7, 1910, the defendant Barnes, as party of the first part, entered into a written igreement with the plaintiff Smith and the defendant McCullough, as parties of the second part (they acting for themselves and [204]*204one Stack), the material provisions of which agreement are as follows:

“The party of the first part hereby agrees to sell and the parties of the second part agree to purchase all of the stock of the Judith Basin Milling Company, a corporation of the state of Montana, * * * for the sum of $80,000, payable in the manner following, to-wit: Ten thousand ($10,000) dollars cash upon the signing of these presents, receipt whereof is hereby acknowledged; five thousand ($5,000) dollars December 1, 1910, ten thousand ($10,000) dollars January 1, 1911, ten thousand ($10,000) dollars January 1, 1912, ten thousand ($10,000) dollars January 1, 1913, and ten thousand dollars on the 1st day of each succeeding January until the total of said consideration shall have been paid, except as to the last payment, falling due January 1, 1916, which shall be fifteen thousand dollars.
“And it is further agreed and understood that the said stock properly indorsed shall be placed by the said party of the first part in escrow in the Empire Bank & Trust Company in the hands of the cashier thereof at Lewistown, Montana, to be by him delivered upon the payment in full and according to their terms and tenor, notes representing the said deferred payments.
“And it is further agreed and understood by and between said parties that said notes shall bear and draw interest at the rate of eight (8) per cent per annum, interest payable annually, and upon the full payment of each' of said notes, a proportionate amount of said stock shall be delivered by the cashier of said bank to said second parties, but upon the failure of the second parties to make payments or any of them, or the interest accrued on any of said payments, then the first party shall have the right and option to demand of said bank and upon demand said bank shall deliver to him said certificates so placed in escrow, and thereupon the second parties shall forfeit to the first party all sums theretofore paid as liquidated damages under this contract.”

[205]*205After explaining that the interest of Stack has been assigned to the plaintiff, and that McCullough is made a defendant because of his refusal, after demand, to join the plaintiff in the action, the complaint further alleges (paragraph 5) : “That said contract or writing does not fully or plainly set forth the understanding and agreement of the parties thereto as it should in that the true understanding and agreement of said parties at and prior to the execution thereof was that upon payment of the respective installments of money provided for in said contract or agreement, and at th'e time of such payments, a proportionate amount of the stock therein mentioned should be delivered to and become the absolute property of said parties of the second part, and in this regard said writing is contradictory and ambiguous; the true intent, understanding, and agreement of the parties thereto being that, for every $1,000 paid on account of the purchase price, there should be delivered to said parties of the second part one-eightieth of the total capital stock of the Judith Basin Milling Company, a corporation organized and doing business under and by virtue of the laws of the state of Montana, agreed to be sold thereby, to-wit, 1,000 shares of the par value of $100 each.” Following this paragraph are allegations to the effect that the sum of $10,000, acknowledged by the agreement, was in fact paid, and the notes for the deferred installments were actually executed as required thereby; that at the maturity of the note due December 1, 1910, plaintiff tendered the amount thereof, with interest, to the Empire Bank & Trust Company, coupled with a demand for the delivery of a proportionate amount of said stock, but this tender and demand were, at the instance of defendant Barnes, rejected and refused; that at the maturity of the note due on January 1, 1911, plaintiff offered to pay the full amount thereof, with interest, coupling said offer with a like demand, which offer and demand were similarly rejected and refused; that Barnes has failed and refused to deliver or cause to be delivered any of said stock to the plaintiff or to return the said sum of $10,000 paid under the contract, or to return or cause to be [206]*206returned tbe promissory notes executed and delivered to Mm under the agreement, and has incapacitated himself from performing his agreement, by selling and transferring said stock to a stranger; that said stock is now worth $100 per share, and, in consequence of the acts of Barnes, plaintiff has sustained damages which he prays in the sum of $30,000, and “such further relief in the premises as may be meet and equitable.”

McCullough and Barnes filed separate answers; that of Barnes being quite elaborate. The effect of them, so far as we deem it material to the purposes of these appeals, is to deny the agreement, as set out in the complaint; to admit the execution of an agreement similar in terms, save that it provided for the delivery of the stock only upon the full payment of the entire consideration; to plead that the words “each of,” before the words “said notes,” and the words “a proportionate amount of,” before the words “said stock,” were intex-lined and inserted in said agreement after its execution and delivery, and without the knowledge or consent of Barnes; to deny any tender or offer to pay under the contract as it was actually made; to aver that, of the first payment of $10,000 made upon the execution of the contract, $8,500 were the proceeds of property belonging to the Judith Basin Milling Company, sold at the instance of plaintiff and his associates; and to claim default on their part in the payments due December 1, 1910, and on January 1, 1911, in consequence of which Barnes exercised the option vested in him by the contract to withdraw said stock from the Empire Bank and to declare a forfeiture of all the money actually paid thereon. The affirmative allegations of the answers are controverted by reply.

The cause was tried before Honorable C. L. Crum, sitting with a jury. Verdict was for the defendant Barnes, and judgment went accordingly. Plaintiff’s motion for a new trial was heard by Honorable Roy E. Ayers, who by order denied the same. From that judgment and order plaintiff appeals and seeks a reversal upon three grounds, viz.: Insufficiency of the evidence to justify the verdict; that the verdict is contrary to the instruc[207]*207tions and therefore against law; and that certain errors of law were committed in rulings admitting evidence, refusing instructions offered by the plaintiff, and giving others at the instance of the defendants.

1. As affecting the importance of the instructions to the jury, the respondents insist that this is a suit in equity and not an action at law. This is said to be so because of the allegations of paragraph 5 of the complaint, coupled with the prayer for equitable relief; because the answer of Barnes pleads equitable defenses, is grounded on an equitable right, and asks equitable relief; and because the appellant treats the cause as in equity by presenting the evidence to this court in the form of question and answer.

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Cite This Page — Counsel Stack

Bluebook (online)
149 P. 963, 51 Mont. 202, 1915 Mont. LEXIS 90, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-barnes-mont-1915.