Knudtsen v. Remmel

Scott, J.:

The defendant Eemmel appeals from a judgment in favor of plaintiff, entered upon a verdict, and from an order denying his motion for a new trial, and the plaintiff appeals from so much of the judgment as dismisses her third cause of action!

The plaintiff sues as assignee of one William Alton, Jr., and has recovered a judgment for the sum expended by said Alton in procuring' to be made a survey for a proposed railroad, for which, as it is alleged, the appellant and the defendant Eose promised to reimburse him. It appears that the appellant was president and Bose treasurer of a corporation known as the Arkansas Anthracite Coal *447 Company which owned a tract of coal land in Arkansas. In order to develop the property it was desirable to build a line of railroad to it, and covering a distance of something over fifty miles. Appellant and Bose apparently owned most of the stock of the coal company, and held all of its stock as trustees under a voting trust agreement. Alton, believing that he could interest capitalists in the enterprise, had an' interview with appellant and Bose as the result of which he made them a written proposition which was dated February 12, 1906, although actually signed .a few days earlier. By this paper he proposed that the appellant and Bose should procure a charter for a railroad from the coal fields above mentioned to the city of Fort Smith, and should execute a mortgage thereon, which should be further secured by 5,000 acres of the coal lands belonging to the coal company; the bonds secured by said mortgage were to be an amount sufficient to build and equip the proposed railroad^ and develop the coal fields so as to produce at least 1,000 tons of .coal per day. The railroad company was also to issue stock to an amount equal to its bond issue, and of this stock Alton was to receive five per cent as compensation for his services. Alton on his part proposed, to sell the. bonds at a price not less than ninety-five cents on the dollar. Alton also undertook as follows : “ I also propose to raise the -money to pay for making the survey for said railroad, which amount is to be taken from the sale of the bonds, but in case said bonds are not sold, the cost of said survey is to be repaid out of any funds that you, or your associates or the Arkansas Anthracite Coal Company may hereafter raise ■for the building of a railroad along said line.” As a matter of fact Alton was-never able to sell the bonds and raise the necessary funds; neither the appellant and Bosé nor the coal company nor any one else ever did raise funds for that purpose and no railroad was ever built along the proposed line. Alton did, however, cause a survey to be made and expended in that behalf the sum for which he has now recovered judgment. It is quite evident that if the written proposal signed by Alton evidenced the entire contract between ■himself onithe o'ne-hand, and appellant Bose on the other, Alton mever became- .entitled to reimbursement for the moneys • expended in .surveyingthe line. Such reimbursement was limited to be made, first, .out of the proceeds of bonds which Alton might sell and, *448 second,, out of funds which defendants or their associates, or the coal company might raise to build the railroad. Since no bonds were sold and no funds Were raised by any one, neither of the; alternative sources of reimbursement was.ever created. Although the so-called proposal was sighed only by Alton, it none the less constituted a contract between the parties. 'Bemmel and Bose signified their acceptance of it by proceeding to do what- it required of them by procuring a' charter for the. proposed railroad and preparing to issue the requisite bonds and stock. The plaintiff, however, contends that the written paper did not constitute the entire contract between the parties. This claim is based upon the evidence of Alton as to a conversation which took place between himself and Bemmel ánd Bose at the time the above written paper was drawn and signed. lie testified that the following conversation took place: “I agreed to raise the money to build the — to put through the survey. I said I would raise the money; and if they went bn with this operation and I didn’t raise the money for the bond, they were to repay me for this survey. I said I .didn’t intend to be out this survey, the price of this survey. They 'said1. ‘ We intend to build that road -through to Fort Smith, and if you don’t raise the money for the bonds, we are going to raise the money for the bonds. and build it and develop this property.’ ” The learned trial justice, erroneously as we think, charged the jury that this statement by defendants, if made, amounted to an agreement to reimburse Alton for the survey without condition or contingency. It does hot so read.' At the most it amounts to nothing more- than the expression of an intention to raise the money and an expectation of being able to do so. It certainly cannot, by any fair construction, be read as an absolute agreement to raise the money in any event. Beading the statement just as Alton gives it, we find nothing more than an expression of the confident' hope, which seems to have been shared by all concerned, that funds would be raised from one source or another and the road built. Assuming that' it was competent to receive evidence as to a contemporaneous.pai’ol addendum tti the written contract-the only. question for the jury was ' whether or not such, addendum was made. • If it was made in the language-testified to- by plaintiff’s assignor as the jury apparently found, the true meaning and 'construction of that language is foi' the *449 court. So construing it the court should have held that it fell short of an absolute and unconditional promise to pay for the survey in any event. Being merely the expression of an intention it adds nothing to the obligations assumed by appellant and Rose when they accepted Alton’s written proposition.

Plaintiff also seeks to sustain.the judgment because, as she says, defendants accepted and used a part of the survey. It appears that a part of the projected line of railroad ran through a certain pass .as to which it was desirable to secure a pre-emptive right." It wras apprehended that some other projected railroad company might file a map and profile and thus gain an advantage. The defendant Rose, in October, 1906, wrote to Alton pointing out the desirability of filing a survey, to secure the right to use this pass, and suggesting, though not requesting, that copies of the map' and profile covering that particular part of the route should be prepared and filed. This Alton did. It is impossible to construe this action as an acceptance and use of the survey such as would import an obligation on the part of the defendants to pay for it, irrespective of any express contract obligation to do so. The parties, at the time of the incident, were engaged in a joint enterprise the crucial feature of which was the building of a railroad. Anything which would prevent that would defeat the whole enterprise. It was to Alton’s interest as well as to that-of the defendants that it should not be defeated. Consequently the filing of the fragment of the survey was for the interest of all. We find nothing in the case, therefore, upon which to base a judgment for the plaintiff. Her third cause of action was also unsustained by the evidence and was properly dismissed.

The judgment dismissing the third cause of action is affirmed; and the judgment, so far as it awards a recovery against the defendant appellant and the order appealed from are reversed and a new trial ordered, with costs to the defendant appellant to abide the event.

Ingraham, P. J., McLaughlin, Laughlin and Clarke, JJ., concurred.

Judgment dismissing third cause of action affirmed; judgment so far as it awards recovery against'defendant appellant reversed and new trial granted, with costs to defendant, appellant to abide event.