Moses v. Scott

• Decision Date: 26 July 1888
• Citation: 84 Ala. 608,4 So. 742
• Parties: MOSES v. SCOTT ET AL.
• Court: Alabama Supreme Court

4 So. 742

84 Ala. 608

MOSES v. SCOTT ET AL.

Supreme Court of Alabama

July 26, 1888

Appeal from chancery court, Morgan county; THOMAS COBBS, Chancellor.

Bill by A. H. Moses against John F. Scott and others for specific performance of a contract. From an order dissolving a preliminary injunction complainant appeals.

Brickell & Harris and J. H. Nathan, for appellant.

Roquemore, White & Long and Kirk & Almon for appellees.

STONE C.J.

In January, 1887, a joint-stock company was formed, incorporated, and organized, under the general statutes enacted for the purpose, with the corporate name of "The Sheffield & Tuscumbia Street-Railway Company." The bill in this case avers that "the object and purpose of the company were the construction, maintenance, and operation of street railways in the towns or cities of Sheffield and Tuscumbia, in the county of Colbert, in the state of Alabama, and connecting the said towns or cities." The bill further avers that "the capital stock of said company was and is fifty thousand dollars, divided into one thousand shares, of the value of fifty dollars each." The bill then avers that on March 3, 1887, the complainant, Moses, John F. Scott, and other named stockholders of the corporation, entered into a written agreement, subscribed by them severally, by which they bound themselves, and the stock they severally held in the corporation, for the term of three years from the date of the agreement, to the observance of certain stipulations. Among them are the following: First. That their respective amounts of stock were thereby placed in the hands of Alfred H. Moses, John F. Scott, Joseph H. Nathan, and Arthur H. Kellar, as trustees, "with power to vote said stock at all meetings, whether regular, called, or special, as they or a majority of them should deem best." Second. That this agreement should continue for three years, unless rescinded by unanimous consent. Third. That the vote should be cast as a unit, as three-fourths of the trustees might determine; or, if they failed to agree, as those holding three-fourths of the stock represented might determine. Fourth. That during the three years the shareholders had the right to sell their stock in whole or in part, but not the power to sell the right to vote it; and, during that term, the transferee would only obtain the transferrer's right, namely, the right to own, but not to vote, the stock. Fifth. That, during the three years, the right of the shareholder to sell his stock was further restricted, as follows: "That in the event any or either of the parties should, at any time during the continuance of the said trust, offer his stock for sale, subject to the condition of said trust, he should give the refusal to purchase the same to the other parties to the agreement, or to such of them as were willing to buy, at the price offered bona fide therefor, and at which he was willing to sell." The present bill charges that Scott, disregarding the terms of the said agreement, has sold his stock to Tompkins, who purchased with knowledge of the terms under which Scott held it, and that Tompkins claims the right to hold and vote the stock, relieved of the said trust. The bill further avers that Moses is willing, able, and prepared to purchase and pay for the stock at the price Tompkins agreed to give for it; that he has made such offer to Scott, and requested to be informed of the price at which he had agreed to sell to Tompkins; but that Scott refused to give the information, and refused to sell him the stock. The object of the bill is to obtain specific execution of the said agreement or trust to have the stock decreed to him, Moses, on his making payment at the price Tompkins agreed to give, and to enjoin Tompkins from voting the stock. There was a preliminary injunction, which, on demurrer, was dissolved. From that order the present appeal is prosecuted.

A very able argument has been submitted to us in maintenance of the injunction. The view we take of the case renders it unnecessary that we should express our views on several of the points urged. The general rule is that chancery will not lend its aid for the enforcement of an executory agreement to purchase personal property. The reason is that the purchaser can obtain other property of like kind, and, in an action for the breach of the contract, a court of law will award him ample compensation for the damage he has sustained. 5 Wait, Act. & Def. 766; 2 Story, Eq. Jur. § 718; 3 Pom. Eq. Jur. §§ 1401, 1402; Morris v. Manufacturing Co., 83 Ala. 565, 3 South. Rep. 689. But when the reason on which the rule rests does not exist, the rule does not apply. Where the article contracted to be purchased is one of mere taste, an heirloom, a family relic, or, from some other cause, is not mensurable by a money standard, specific performance is generally decreed, as the only adequate remedy the case is susceptible of. And specific performance of contracts for the purchase of stock is frequently decreed on the same ground. 2 Story, Eq. Jur. § 719; 3 Pom. Eq. Jur. § 1403; 5 Wait, Act. & Def. 766, 767; Tayl. Corp. § 790; Duncuft v. Albrecht, 12 Sim. 189; Cheale v. Kenward, 3 De Gex & J. 27; Todd v. Taft, 7 Allen, 371; Cushman v. Manufacturing Co., 76 N.Y. 365; White v. Schuyler, 1 Abb. Pr. (N. S.) 300; Chater v. Refining Co., 19 Cal. 220. We cannot say there is anything per se illegal in an agreement entered into by and between certain stockholders in a joint stock company, by which they promise to vote together as a unit, in all matters pertaining to the government of the corporation. Each member has the clear right to cast his ballot as he pleases, wisely or unwisely, and no other stockholder can...