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Darrough v. The Nevada Milling Co.

December 31, 1914

MRS. J. T. DARROUGH, ADMINISTRATRIX OF THE ESTATE OF J. T. DARROUGH, DECEASED, RESPONDENT, V. THE NEVADA MILLING AND ORE PURCHASING COMPANY (A CORPORATION), APPELLANT.


Appeal from the Fifth Judicial District Court, Nye County; Mark R. Averill, Judge.

P. E. Keeler, for Appellant.

F. K. Pittman, for Respondent.

By the Court, McCarran, J.:

In this action Mrs. J. T. Darrough, as administratrix of the estate of J. T. Darrough, deceased, sued to recover $4,000 loaned by her deceased husband to C. S. Lemon, as president of the Nevada Milling and Ore Purchasing Company, a New Jersey corporation. From the judgment of the trial court in favor of respondent, and from the order of that court denying appellant's motion for a new trial, appeal is taken.

It is the contention of appellant herein that C. S. Lemon was not the president of the Nevada Milling and Ore Purchasing Company, either de factor or de jure, for the reason that no shares of stock had been issued to C. S. Lemon and, under the laws of New Jersey, the holding of stock in

a corporation is made a prerequisite to qualification for office in the corporation.

It is admitted by appellant that the money was loaned

[37 Nev. 170, Page 171]

by respondent to C. S. Lemon, and that the note given in security for the loan was signed by C. S. Lemon, as president of the Nevada Milling and Ore Purchasing Company. They contend, however, that although the money borrowed by Lemon from J. T. Darrough was used in the construction of a mill at Manhattan, nevertheless the appellant company was not liable for the loan for the reason that Lemon was an independent contractor, and was constructing the mill under an agreement with appellant company to turn the same over to appellant company when it was completed. It is the contention of the appellant that the mill, never having been completed by Lemon, was never turned over by Lemon to the appellant company, and was never accepted by the appellant company.

The uncontradicted testimony of Mrs. Davidson, bookkeeper for the appellate company and employed by C. S. Lemon, president and general manager of the company at Manhattan, is to the effect that the money borrowed from Darrough was used in paying off debts incurred in the construction of the mill, and for labor performed in and about the same. In that respect she testified as follows:

“Q. Were you working for said company during the month of November, 1907? A. Yes.

“Q. If you answer the preceding question in the affirmative, state whether or not you are familiar with the execution of a note of $4,000 on the 6th day of November, 1907, in favor of J. T. Darrough, for money loaned to the company for paying the debts of the company? A. Yes.

“Q. If you answer the preceding question in the affirmative, state the facts within your own knowledge concerning the execution of said note. A. I know within my own knowledge Charles S. Lemon borrowed from J. T. Darrough for the use of the company in paying its debts, and defraying the expenses of said company, and the money was used for that purpose.

“Q. If you know, state what was done with the money received from J. T. Darrough in consideration of the

[37 Nev. 170, Page 172]

execution of said note? A. It was used for defraying the expenses of the company and paying its debts. * * *

“Q. State what authority, if you know, the party executing said note had for executing the same on behalf of said Nevada Milling and Purchasing Company? A. Charles S. Lemon negotiated and made contracts for the purchasing of all ore for said company, and bought all the machinery for the company, and fitted the entire mill complete, and hired all men, and he was the only official of said company at that time in Manhattan.”

At the trial of the cause in the lower court the appellant herein introduced in evidence certain pages of the minute book kept by the corporation, and respondent introduced the remainder of said book in support of her contention. From the record it appears that the minute book introduced in evidence is a bound volume, the pages which are firmly fastened, constituting one book or volume. This is significant only in so far as it indicates that certain minutes, although not signed by the secretary, are, however, in the same volume in which other minutes appear duly signed. It appears from this record that the first meeting of the stockholders of the Nevada Milling and Ore Purchasing Company was held at Camden, New Jersey, March 25, 1907, and at that meeting the stockholders passed a resolution and caused the same to be entered upon the minutes, which resolution is as follows:

“Whereas, Clifford McClellan and Chas. S. Lemon have offered to sell to this company property as follows: The use of the Griffin process for saving gold and silver, also certain valuable contracts in hand including a contract with Douglas and Kendall, leases for the treating of ores now on their dumps. Also, the Manhattan Mining Company, Chipmonk Mining Co., The Original Manhattan Mining Company, The Manhattan Consolidated Mining Company, and the Seyler-Humphreys Mining Company, all bearing date of January 15, 1907. Also, buildings and all requisite machinery to ...


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