Beardsley v. Beardsley - 138 U.S. 262 (1891)
U.S. Supreme Court
Beardsley v. Beardsley, 138 U.S. 262 (1891)
Beardsley v. Beardsley
Submitted December 12, 1890
Decided February 2, 1891
138 U.S. 262
The appellant signed and delivered to the appellee a paper in which he said
"I hold of the stock of the Washington and Hope Railway Company $33,250 or 1,350 shares, which is sold to Yaul F. Beardsley [the appellee], and which, though standing in my name, belongs to him, subject to a payment of $8,000, with interest at same rate, and from same date as interest on my purchase of Mr. Alderman's stock."
Held that this was an executed contract, by which the ownership of the stock passed to the appellee, with a reservation of title, simply as security for the purchase money.
On the second question at issue, the Court holds that the contested facts establish a joint interest in the parties in the railroad enterprises which form the subject of the controversy, and not a mere stock transaction.
This was a suit in equity brought by the appellee as plaintiff below, against the appellant and the Arkansas and Louisiana Railway Company to enforce the rights of the plaintiff in the railway, under certain alleged trusts. The material facts in this controversy were stated by the court as follows:
The undisputed facts of this case are as follows: on January 1, 1882, appellant signed and delivered to appellee the following instrument:
"W. H. Carruth, President. J. D. Beardsley, Superintendent"
"Superintendent's Office, Washington and Hope Railway Company"
"Washington, Ark., Jan. 1st, 1882"
"I hold of the stock of the Washington and Hope Railway Company thirty-three thousand two hundred and fifty dollars, or thirteen hundred and fifty shares, which is sold to Paul F. Beardsley, and which, though standing in my name, belongs to him, subject to a payment of eight thousand dollars, with
interest at same rate and from same date as interest on my purchase of Mr. Alderman's stock."
"Witness: J. H. BURT J. D. BEARDSLEY"
The parties to the litigation are brothers. Prior to the execution of this instrument, and in 1877, the Washington and Hope Railway Company had been incorporated for the purpose of building a railroad between Washington, in Hempstead County, and Hope Station, on the Iron Mountain and Southern Railway, a distance of ten miles. On September 10, 1879, the company, having graded a roadbed, entered into a contract with appellant for the completion and equipment of the road, the consideration of which contract on the part of the railroad company was, among other things, the transfer, practically, of the entire stock in the company to appellant. In the execution of this contract, appellant associated Vinton Alderman under an agreement that they would contribute equally to the expense and divide equally the stock of the company. By the first of January, 1881, the contractors had complied with the contract and completed the road, and it was accepted as of that date by the company, and paid-up stock to the amount of one hundred thousand dollars was issued to them, excepting therefrom a few shares to persons to qualify them to be directors of the company. Alderman became tired of his investment and proposed to sell his interest. This proposition, made to J. W. Paramore, president of the Texas and St. Louis Railway Company, came to the knowledge of appellant. Fearing complications if the sale should be made to that party, he wrote to Alderman offering to buy the stock for twelve thousand dollars on a credit. This offer was accepted, and the stock transferred to appellant, who thereby became the owner of substantially all the paid-up stock of the company. After such purchase, he executed the instrument of January 1, 1882. Prior to this purchase from Alderman by appellant, appellee had come from California and commenced working on the road. Appellant continued, under construction contracts, in possession and control of the road until February, 1886, a period of a little more
than four years from the date of the agreement. During these years, both brothers were giving up their time and labor to the operation and extension of this railroad, appellant having the principal charge, as superintendent or manager. The road was widened from a narrow to a standard gauge. Two corporations were organized, the one looking toward an extension of the road eastward and the other to a like extension westward, and in those extensions contracts were entered into between the several companies and the appellant, and much work was done thereunder. In the execution of those contracts, the appellant associated with himself other parties, the details of which contracts and arrangements with his associates are immaterial to the matter in controversy. Until about the first of January, 1886, the brothers worked harmoniously together in this enterprise, the appellee contending that all this time their relations were substantially those of joint owners, their respective interests being in the proportion of two-thirds to appellant and one-third to appellee. About the first of January, 1886, differences arose between the brothers, in consequence of which the appellee was discharged from service on the road by the appellant, acting as general manager. At the same time, the appellant repudiated all interest of the appellee in the enterprise. After this disagreement and discharge, the appellee brought this suit to establish his rights as the owner of substantially one-third of the property. The case went to proofs and hearing, and the circuit court granted a decree in appellee's favor. From such decree appellant appealed to this Court.