Greene v. Osceola Mines Gold Mining Co.
Before: Smith, Allen
Synopsis
Action upon Note—Pleading—Execution—Nonpayment—Denial fob Want of Information and Belief.—In an action upon a note, a denial by the defendant of its alleged execution and nonpayment for want of information and belief is insufficient to raise an issue thereupon.
Id.—Note of Corporation—Consideration—Development Prior to Incorporation—Purchase of Deed for Stock.—Under a plea of want of consideration for the note of a corporation defendant it is held that such plea was justified in part, so far as it related to advances made by the payee to develop the property prior to its incorporation, under a bond for a deed held by four incorporators jointly, between whom it was agreed at the time of the incorporation that its whole capital stock should be equally divided, and, also, so far as it relates to advances made by the payee to procure a deed, which three of the corporators had agreed to pay for as part consideration of the issue of the 'stock to them, notwithstanding, after acceptance of the bond and deed by the corporation, such sums were credited in favor of the payee upon its books. (Smith, J., dubitante.)
Ib.—Consideration Sustained in Part—Money Beceived and Applied by Corporation.—The note was sufficiently supported to the extent of money advanced by the payee prior to the incorporation, under an agreement that it should be repaid out of the first proceeds of the mine, and which was afterward received by the corporation and applied by it toward the payment of lienholders, and for further development of the mine and which was credited to the payee upon its books.
Opinion — Allen
[428]
ALLEN, J.
The action is upon a promissory note, dated July 26,1891, for $9,500, and interest. The answer, for want of information and belief, • denies its execution and nonpayment and further sets up as a defense a want of consideration. The answer being insufficient to raise an issue upon the question of the execution and nonpayment of the note as an entirety, the only question for consideration on this appeal is whether or not the note executed was without consideration.
The case is this: On the 12th of June, 1900, Mary C. Greene, W. H. Fuller, T. E. Gamier, and G. W. Beck were the owners jointly of a mining bond conditioned for the conveyance to them, or their assigns, upon payment of $3,000, of a certain mining property. They had made various contracts in relation to the disposition thereof to a corporation thereafter to be formed; and on the date last mentioned, after the formation of such corporation, finally agreed in writing to convey their equity in the property to defendant corporation for its entire capital stock, and in such agreement Greene, Gamier and Fuller undertook to pay the $3,000 due on said property and to procure a conveyance thereof to the corporation. On the same day the corporation, by resolution, regularly adopted, agreed to accept the assignment of such bond and the deed of the original owner of such property and issue therefor the whole of its capital stock—one-fourth thereof to each of said holders of .the bond. Anticipating this agreement, Mrs. Greene had already advanced and paid into the corporation, through Fuller, her attorney, the $3,000 due to the owner, and which, under the agreement, she, Fuller and Gamier were to pay as a part of the consideration for the issue of the stock to them. Before this time, however, on the 31st of May preceding, Mrs. Greene had paid to Fuller $2,000, to be used in development of the mine and payment of expenses already accrued in its development. This money was credited to Mrs. Greene on the books of the corporation, as was the $3,000 before mentioned, together with $3,176, the one-fourth of previous expenditures in the purchase of the bond and the development of the property. The undisputed testimony is, that this $2,000 was not paid or advanced, except upon the agreement that it should be refunded out of the first earnings
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