Richardson v. Cornell ( 1920 )

Mr. Justice Scott

delivered the opinion of the court.

The complaint in this case alleged the following contract between the plaintiff, defendant, and one William J. Candlish:

“January seventh, 1918.

“In consideration of J. E. Richardson lending. certain bonds of the English Government to be used as collateral security in securing the money necessary to take up the option held by H. W. Cornell on 35,000 shares of the Shiloh Oil and Refining Company at $.12 per share, the undersigned have agreed as follows: “1. Said Shiloh stock, together with 10,000 shares of the Red Bank Oil Company and 100,000 shares of the Colorado Oil and Development Company shall stand as collateral security in said transaction, and for the protection of J. E. Richardson against any loss whatever. 2. It is contemplated that this transaction shall be consummated by the resale of all or part of said Shiloh‘stock 'within ten days from this date; that in any event sufficient of such stock shall be sold to repay such loan and restore said bonds and collateral stock to the parties depositing them; that the concurring judgment of two of the undersigned, shall determine the time and price at which said Shiloh stock shall be sold to repay such loan, all the proceeds of such sales to be applied to such loan until the same is fully paid. 3. All the profits of said transaction, including stock remaining after repayment of said loan, are to be divided by the undersigned, share and share alike, that is to say, one third to each.

“In witness whereof the undersigned have affixed their signatures this 7th day of January, 1918.

WILLIAM J. CANDLISH,

*J. E. RICHARDSON,

H. W. CORNELL.”

It is then alleged that the defendant purchased the Shiloh shares at the price agreed and deposited the same with the plaintiff, together with the 10,000 shares of the Red Bank stock and 90,000 shares of the Colorado Oil and Development Company in the manner agreed, and that the plaintiff delivered certain English bonds to defendant which were deposited with the Colorado National Bank by defendant and Candlish to secure the payment of their joint promissory note, the proceeds of which was applied to the payment of the purchase of the 35,000 shares of Shiloh stock as agreed.

It is further alleged that this note was afterward paid and the English bonds released from their use as collateral and returned to the plaintiff as agreed. In other words, the contract was fully performed by the defendant, except it' was not performed within the time agreed. The charge in this particular is that the stocks were sold by defendant with permission of plaintiff as agreed in the contract, but that the proceeds of such sale were not promptly applied to the payment of the note to the bank, thereby causing delay in a return to plaintiff of his securities.

The prayer of the complaint is not for damages for loss, or division of profits in the transaction. It is, however, alleged that the defendant failed to pay all of the sums received from the sales of stocks from time to time as such sales were made, but that a part of these sums were reinvested by the defendant in other oil stocks and oil leases of uncertain and indefinite description in the complaint, either as to the number of shares of such stocks or of the leases, or value as to either. The sole relief prayed for is that the defendant be enjoined from the sale of any such stocks or interests in leases, and that plaintiff be subrogated to the rights and interests of defendant therein.

A demurrer was sustained to the complaint as being insufficient to state a cause of action. An amended complaint was ordered to be stricken from the files as being in substance but a repetition of the original complaint. The plaintiff brings error and presents his application for a supersedeas.

It seems to be clear from the pleading that if plaintiff has a cause of action against the defendant, it must be for damages for delay in returning his securities, which were agreed to be and were deposited as security for defendant's note to the bank. But this is not sufficiently pleaded, nor is any such damage demanded. The contract discloses a joint speculation by the parties in which the plaintiff made no investment and took no chances, except the deposit of his bonds as collateral to secure payment of the defendant’s note, and which have been returned to him. A mere statement of the facts discloses the correct conclusion of the court in the premises.

The application for a supersedeas is denied and the judgment is affirmed.

Garrigues, C. J., and Denison, J., concur.