Busby v. Century Gold Mining Co.

McCARTY, J. (after stating the facts). 1 The first contention of appellant is that by the terms of the written acknowledgment referred to in the statement of facts, considered in connection with the circumstances and conditions, as shown by the evidence, under which the loans were made, payment was to he postponed until such time as the profits of appellant company would he sufficient to liquidate the indebtedness evidenced by the receipts or acknowledgments mentioned. Counsel for appellant say in their brief “that respondent expressly waived claim of payment except upon the happening of a contingency and the existence of a fund;” in other words, that respondent made the loans with the express understanding that in case no profits should be derived from the business which appellant was engaged in, and for which the indebtedness was incurred, the money never would be repaid. In the case of Johnston v. Schenck, 15 Utah 490, 491, 493, 50 Pac. 921, the contract sued on in that case provided in part as follows: “If within one year from and after June 15, 1891, we, or either of us sell, convey •or transfer any interest whatever in or to said, or either •of said, lode mining claims ... or put the same into any incorporation now or hereafter organized, then we agree to repay on demand to said James Johnston, the aforesaid sum of two thousand dollars advanced to ns by him as aforesaid; otherwise such sum of two thousand dollars shall not be repaid by us to him.” Notwithstanding that in that case there is a positive declaration in the foregoing instrument that the indebtedness should not be repaid unless the property mentioned should be disposed of within a certain period of time, this court held that “the paper in question bound the defendants to repay the plaintiff the $2,000 which he loaned them at the expiration of one year from its date, unless they should sell or transfer their mining claims, or some part of them, sooner, and in that event to pay on demand; that it gave them one year to repay, or until they should sell their mining claims, within that time.” [235] It was held in that ease that contracts and agreements such as we now have under consideration are to he construed in the light of the circumstances and conditions under which they are made, keeping in view the situation, interest, and motive of the parties as far as they can be determined by the contract and other evidence, and then give to the language used a reasonable construction. In the case before us it appears that appellant corporation was in need of money to carry on its business, and the loans in question were made “to help it out,” and at a time when some of its other stockholders refused to make appellant company any loans whatever. Under these circumstances the only reasonable construction that can be given to the written acknowledgments under consideration is that the clause “to be repaid from the first profits of the company” was inserted for the benefit of the respondent, making his debt first in order of payment out of the profits of the company, should any be realized, and not for the purpose of enabling the appellant, after reaping the benefits derived from the loans, to avoid repaying the money in case it should derive no profits from the business in which it was engaged. When the money was loaned, the debt was created and became absolute, and the provisos in the written instrument that the money should be repaid out of the first profits of the company merely fixes the happening of such an event as a convenient time for making the payment, and in case no profit should be realized the law implies a promise to pay within a reasonable time. The construction thus given the written instruments under consideration i|3 not only in accord with our ideas of justice and fair dealing, but is in harmony with the great weight of judicial authority on this subject. De Wolfe v. French, 51 Maine 420; Noland v. Bull (Or.), 33 Pac. 983; McCarty v. Howell, 24 Ill. 342; Page v. Cook, 164 Mass. 116, 41 N. E. 115, 28 L. R. A. 759, 49 Am. St. Rep. 449; Crooker v. Holmes, 65 Maine 195, 20 Am. Rep. 687; Sears v. Wright, 24 Maine 278; [236] Johnston v. Schenck, supra; McIntyre v. Mining Co., 20 Utah 323, 60 Pac. 552; Button v. Higgins (Colo. App.), 38 Pac. 390. 2 Appellant’s next contention is that the court erred in finding that three years and two months, the period of time which had elapsed between the date of making the last loan and the commencement of the action, was a reasonable time for defendant to pay the debt. By an examination of the pleadings as set out in the foregoing statement of facts it will be seen that appellant in its answer admitted the allegations of the second, fourth, and fifth paragraphs of the complaint. In the fifth paragraph it is alleged that the debt was owing, due, and unpaid. By admitting that the debt was due, appellant in effect admitted that a reasonable time had elapsed for the payment thereof. In fact, the answer admits all of the material allegations of the complaint relied on for a recovery. Respondent would have been entitled to a judgment on the pleadings, had he made a motion to that effect in the court below. The judgment is affirmed, with costs. BASKIN, C. J., and BARTCH, J., concur.