Alkire v. Acuff , 134 Okla. 43 ( 1928 )

This is an appeal from a judgment below in favor of defendant in error, as plaintiff, and against the plaintiffs in error, as defendants. There were three causes of action, the first of which was for $400, alleged to be due plaintiff for work and labor by him performed as a driller over a period of two months in the services of defendants; the second of which was for the recovery of $1,000, alleged to have been paid defendants by plaintiff upon a written contract, wherein defendants agreed to deliver to plaintiff, in consideration of the $1,000 and a certain automobile, 8,000 shares of capital stock of the Alkire Drilling Company, it being alleged the defendants failed to deliver said stock, but that the automobile had been returned to him; the third cause of action was for the recovery of $50, alleged to have been paid by plaintiff to a workman of defendants under the express promise of defendants to repay plaintiff said sum; that the promise had been breached.

It appears that George Alkire, E. E. Alkire, his father, and Ted Alkire, his brother, were partners in a joint venture of drilling for oil and in organizing and promoting a corporation for the same purpose.

The first and third causes of action were submitted to a jury; as to the latter, the defendants contended that if the $50 was paid as alleged, it was paid without request, obligation, or liability on the part of defendants to repay said sum; that as to the former, while defendants admit the labor was performed as alleged, that after the Alkire Drilling Company was chartered in the state of Arizona and after financial difficulties were encountered, the plaintiff acquiesced in all assets and liabilities, including plaintiff's claim being turned over to one Kibler as trustee, and that all assets were expended in development and prospecting by said trustee through plaintiff as manager, and that plaintiff is estopped to assert his claim.

Under proper instructions, the jury found for plaintiff upon the disputed questions of fact growing out of the issues so joined in causes of action 1 and 3.

There is sufficient competent evidence to support the judgment rendered upon the verdict of the jury, and under the established rule the same will not be disturbed on appeal.

At the conclusion of all evidence the court sustained a demurrer to the evidence offered as to the second cause of action and rendered judgment for plaintiff in the sum of $1,000 thereon.

The facts established by the evidence are, in substance, as follows: A written contract was entered into between plaintiff and defendants whereby defendants proposed to organize the Alkire Drilling Company in Arizona and obligated themselves for a specific consideration, a part of which is the $1,000 sued for in the second cause of action, to deliver to plaintiff 8,000 shares of capital stock of said corporation. It is admitted by all parties that the said contract was executed; that defendants received the $1,000 in cash from plaintiff; that the charter from the state of Arizona was obtained by the Alkires, the defendants, but no stock was ever delivered to the plaintiff.

It is disclosed that defendants, on May 3, 1924, entered into a written contract with W. L. Rucker providing an agreement for and between the three Alkires and Rucker for the incorporating of a drilling company. Two days later Acuff arrived in Arizona and the written contract was made heretofore mentioned, wherein the $1,000 herein sued for and an automobile were obtained from Acuff under the promise to deliver him 8,000 shares of stock. The three Alkires signed this contract.

Thereafter, and on June 7, 1924, another contract was entered into and signed by the three Alkires, W. L. Rucker, and L. W. Kibler, novating the original contracts between these parties and providing for a trustee. Acuff was not a party to this latter contract.

Now, defendants below attempted to show that, while Acuff was not a party to this contract, yet he had knowledge of it and agreed to it by accepting the trusteeship of Kibler, and consequently was bound by the new contract and they were liberated from the obligations of their contract with plaintiff by this novation established in this manner.

Admitting the truth of all facts which the evidence in the slightest degree tends to prove, all the inferences and conclusions which may reasonably and logically be drawn from the evidence, and considering all conflicting evidence most favorable to demurrant as withdrawn (Downey v. Broesamle,91 Okla. 81, 215 P. 1055; Sutherland v. First Nat. Bank,119 Okla. 278, 249 P. 715), yet we cannot say a novation was in the slightest degree established as against Acuff. Acuff is not shown to have done anything more than sit idly and patiently by and leniently await the delivery of stock in accordance with the original and existing obligation of defendants.

There was no consideration upon which to base the contended novation. There was no agreement between these parties as to a new contract of such character as could modify the existing written contract, and even if it be considered that the new contract and agreement in evidence between different parties not including plaintiff set up a new obligation, there is nothing to establish that the obligations of the old contract to which Acuff was a party was extinguished. 20 Rawle C. L., par. 14, p. 371.

The presumption is that the old obligation was not extinguished. 20 Rawle C. L. 364. It is necessary that all parties enter into a new agreement in order to establish a novation. The pre-existing obligation must be extinguished. There must be a consideration upon which to base the new contract — and the new obligation must be enforceable by him to be charged with the novation. Martin v. Leeper Bros. Lbr. Co., 48 Okla. 219,149 P. 1140: McFarland v. Mayo, 65 Okla. 28, 162 P. 753; Ambrister v. Dalton, 66 Okla. 158, 168 P. 231; Burford v. Hughes, 75 Okla. 150, 182 P. 689; McPike Drug Co. v. Williams, 104 Okla. 244, 230 P. 904; Stuart v. Edwards,84 Okla. 207, 202 P. 1032.

There is no evidence showing Acuff ever accepted any new obligation in place of the old. The Alkires were the promoters, under the evidence. They were to organize and incorporate the drilling company. Acuff was the purchaser of the stock.

"A promoter of a corporation is one who, alone, or with others, takes it upon himself to organize a corporation." 14 C. J. 251.

Promoters assume personal liability on such contracts made by them. Fletcher on Corporations, vol. 1. secs. 158, 312; 14 C. J. 269.

In Jackson v. Norman, 99 Okla. 220, 226 P. 570, it was held:

"Where promoters attempt to form a company, and after selling a part of the capital stock on such company abandon the project, it is their duty to return the amount of the subscription to the subscriber, and the loss and expense incurred in such abortive enterprise must be borne by the promoters and not by the subscribers."

It is no defense that such stock money was paid out for expenses preliminary to organization. Fletcher on Corporations, sec. 339.

In Neely v. S.W. Cotton Seed Oil Co., 13 Okla. 356,75 P. 537, it was held:

"The court may withdraw a case from the jury and direct a verdict for the defendant where the evidence is undisputed, or is of such conclusive character that the court, in the exercise of a sound judicial discretion, would be compelled to set aside a verdict returned in opposition to it."

We hold the learned trial court was warranted in directing a verdict for plaintiff below upon the second cause of action and in rendering the judgment entered upon the verdict of the jury upon causes of action 1 and 3.

BRANSON, C. J., MASON, V. C. J., and HARRISON, LESTER, CLARK, and HEFNER JJ., concur.

PHELPS and HUNT, JJ., dissent.