J. A. Fay & Egan Co. v. Brown

Winslow, J. The claims of the appellant, Brown, are in. brief: (1) That the real estate and money bonus had been earned; (2) that his real estate and chattel mortgages are-valid; (3) that the lien claimants should not have been given a lien on more than one acre; (4) that he should have been allowed at least $5,000 more upon his claim; (5) that he should have been given a first lien on labor claims paid by him just before and just after the appointment of the receiver. 1. This was a corporation organized apparently for the441 prime purpose of obtaining the large bonus offered by the citizens of Oshkosh, and incidentally for the manufacture of freight cars. It is forcibly, though perhaps inelegantly, described in the brief of counsel for the respondent QTioate as a “ corporation with a capital on paper of $500,000,— actual capital stock paid for, not to exceed $300,— the balance of $499,700 was wind.” The manipulators of the scheme were Mr. J. L. Broion and Mr. F. Adolphus Anderson. They succeeded in producing a plant for the manufacture of cars which actually made and finished five freight cars. It was plastered with mechanics’ liens and claims for unpaid machinery bills to the extent of about $35,000. A large portion of the machinery was placed in the buildings simply upon conditional contracts of sale, which reserved title in the vendors until the machinery was paid for. Experts examined it, and pronounced it capable of producing five cars during the ordinary,working day of ten hours. This is the plant whieh was tendered to the confiding and public-spirited citizens of Oshkosh as a full compliance with the agreement to build and complete a plant capable of constructing ten new box cars per day. It may well be doubted whether a plant which was covered with liens which the company could not discharge, and which were fast ripening into title, could, in any event, be considered as a compliance with the contract. It would seem like keeping the promise to the ear and breaking it. to the hope. But, aside^ from this question, the fact that the evidence shows that the plant was never capable of constructing or turning out more than five box cars per day is conclusive. The agreement was to complete a plant capable of constructing and turning out “ ten new box cars per day.” "We agree entirely with the trial court in construing the word “ day ” as here used to mean the ordinary working day, and not as meaning twenty-four hours. It is claimed that the evidence shows that by running night and day with two shifts of men, the works could construct ten cars within [442] twenty-four hours, and that this should be held a performance of the contract; but this claim seems to us entirely untenable. Words used in a contract are to be construed in their ordinary sense as commonly used, and not in a strained or unusual sense. ■ The word “ day,” used in this connection, usually, if not universally, means an ordinary working day. 2. This finding of fact to the effect that the plant was never completed so as to earn the bonus of land and money really disposes of the major portion of the appellant’s claims. If the land was never earned by the corporation, then Mr. Browrils mortgage upon the land gave him no lien, because he was not an innocent purchaser, and could get no greater interest than the company had, and that had none. Eur-thermore, it is found by the court upon evidence which we regard as sufficient that the execution of these mortgages upon the entire real and personal property of the company was never authorized by the company. There may be other complete defenses to the mortgages shown by the evidence, but it is unnecessary to pursue the subject further. 3. As to the claim that it was error to adjudge mechanics’ liens upon more than one acre of land, it is sufficient to say that the appellant, Brown, has no interest in this matter which entitles him to question the judgment in this regard. Having no mortgage lien upon the land in any event, he is hot prejudiced by the judgment of lien upon five acres. Ho one who has any interest in the land has appealed from this part of the judgment. • 4. The claim that Brown should have been allowed $5,000 more upon his claim is based upon some' evidence showing that he turned over $5,000 face value of certain corporate bonds' to the E. P. Allis Company as collateral security for the purchase of engines and boilers by the corporation. It appears by the findings that these bonds were returned to Brown when Ohoate purchased the Allis claim and that he {Brown) then turned them over to Anderson, after which .there is no evidence to show what became of them. The [443] court concluded upon these facts that if Brown has any claim upon any one.for them it is upon Anderson individually, and in this conclusion we agree. 5. It appears that Mr. Brown paid something over $4,000 to laborers who had been working in the shop, just prior to the appointment of the receiver, and he claims that he should be allowed this amount as a preferred creditor under sec. 2787a, S. & B. Ann. Stats. There are a number of complete answers to this proposition, but one will-serve. In paying these laborers Mr. Brown was simply paying his own debt. The corporation had never been legally organized, as required by sec. 1773, R. S., so that it could do business with others than its members. It is very doubtful whether half of its capital had ever been subscribed, and it is absolutely certain that twenty per cent, had never been paid in. Mr. Brown was and is a stockholder. He so alleges in his complaint in this action, and that allegation has never been withdrawn, and he is bound by it. In paying these laborers he was but paying his own debt, and he can have no preference therefor. Some other minor contentions are made, but they possess no merit. By the Court.— Judgment affirmed.