Chicago Building & Manufacturing Co. v. Stoker

Wood, J., (after stating -the facts). 1. Appellee did not deny the contract sued on, nor did he allege that he had paid his subscription to the capital stock of the Brinkley Creamery Association. His defense, as disclosed by his prayers for instructions, was that the burden was on the appellant to prove that it had complied with its contract, and that it had not been paid by the Brinkley Creamery Association. Under the contract appellee would owe appellant nothing, even though he had not paid his subscription to the Brinkley Creamery Association, provided the latter had paid appellant the sum of $6,500, the amount due, when appellant had performed the contract on its part. Under the terms of the confract.no subscriber to the capital stock of the Creamery Association was due appellant anything after it had been paid the sum above specified, including necessary costs of collection and discount. The remaining subscriptions or note balance after that belonged to the Brinkley Creamery Association, and not to appellant. Therefore, before appellant could recover from appellee, it devolved upon it to show, not only that it had complied with the contract, but also that the sum due it thereunder of $6,500 had not been paid. The failure of appellee to deny the existence of the contract sued on was not an admission on his part that it had been complied with by appellant. And,' inasmuch as the contract sued on showed that appellant might have been paid the sum due it -under the contract by other subscriptions -to the capital stock of the creamery company, the burden was on appellant to show that it was not so paid before it could hold appellee liable; for, if the creamery association had paid the appellant, through other subscribers, the amount due, appellee would not owe appellant anything, even though he had not paid his subscription. In that case, under the contract in suit, appellee would owe the Brinkley Creamery Association, and not appellant. Therefore the court did not err in giving appellee’s prayers numbered 1 and 2. 2. The court did not err in admitting in evidence the articles of incorporation of the Brinkley Creamery Association. The contract provided: “After payment and delivery has been made as above, said creamery association shall organize a co-operative society under State law fixing the aggregate amount of stock at not less than the amount subscribed hereto, represented by stock certificates of one hundred dollars each.” The articles of incorporation tended to show that payment of the contract price of $6,500 had been made by the subscribers to the capital stock of the Brinkley Creamery Association because under the above clause the creamery association was not to be organized until “after payment and delivery.” The court did not err in admitting the record in the suit of the Brinkley Creamery Association v. O’Harra. The contract contained the following clause: “Stock subscription to said future corporation may be obtained in excess of the above price, but said total subscription shall be held and collected 'by second party until such time only as full cash payment has been made as above, and, when any payment is deferred, all necessary costs of collection and discount may be included, should second party so desire. Any remaining subscription, or note balance, after said creamery association’s entire indebtedness to second party has been so paid, shall be duly assigned to the said corporation for a working capital.” There was evidence -tending to prove that there were subscriptions to the stock of the creamery association amounting to $7,400. Under the above clause, the total subscription was to be held by appellant until such time only as full cash payment had been made, then the residue of subscriptions was to be assigned to the Brinkley association. The record of the suit of the Brinkley association against O’Harra therefore tended to prove that full cash payment had been made to appellant, otherwise under the contract the O’Harra note for subscription to stock would not have been assigned to the Brinkley Creamery Association. At least, this was evidence competent for the jury to consider as tending to establish the fact that appellant had been paid. Under the contract the pledge of the subscriptions amounting, as the jury might have found, to $7,400, to pay the less sum of $6,500 to the appellant was tantamount to a limited guaranty; and when the amount guaranteed was paid, as the jury found, the subscribers — guarantors—were discharged, at least, of any liability to appellant. See First Nat. Bank v. Waddell, 74 Ark. 241; Carson v. Reid, 137 Cal. 253; Knowlton v. Hersey, 76 Me. 345; Cutler v. Ballou, 136 Mass. 337; Reed v. Fish, 59 Me. 358; Cushing v. Cable, 48 Minn. 3; Frost v. Weathersbee, 23 S. Car. 354. The judgment is affirmed.