Aboussie v. Aboussie
| Decision Date | 24 June 1971 |
| Docket Number | No. 29616.,29616. |
| Citation | 441 F.2d 150 |
| Parties | Mitchell A. ABOUSSIE, Plaintiff-Appellant, v. Tanal A. ABOUSSIE and Camal A. Aboussie, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Lonny D. Morrison, Robert K. Pace, Jack Banner, Wichita Falls, Tex., for appellant, Mitchell A. Aboussie; Sherrill, Pace & Rogers, Wichita Falls, Tex., of counsel.
Milton Zacharias, Wichita, Kan., Clyde Fillmore, Wichita Falls, Tex., for appellees; Fillmore, Lambert, Farabee & Purtle, Wichita Falls, Tex., of counsel.
Before COLEMAN, AINSWORTH and GODBOLD, Circuit Judges.
Appellant and his two brothers, the appellees, were the sole stockholders of Aboussie Brothers Audio Visual System, Inc., each owning 100,000 shares. The company was incorporated in Kansas, where the two appellees resided and where it had its principal office. Appellant resided in Texas. After considerable quarrelling among themselves, and lengthy negotiations, appellant (Seller), on October 13, 1966, in Texas, signed a formal written agreement, prepared by his attorney and earlier signed by the appellees (Buyers) in Kansas. The document stated that Seller was transferring his stock to Buyers in consideration of payment of 75 cents a share, or a total consideration of $75,000, payable as follows: $38,000 cash, transfer to Seller of a company automobile (valued by the parties at $2,500), and assumption by the corporation of two notes of Seller to a bank totalling $34,500. Also the Buyers agreed to secure release of Seller from his personal liability on notes of the corporation to a bank; this undertaking on their part was not assigned any value by the agreement.
On the same day, also in Texas, the Seller transferred his stock, and the Buyers delivered to him the recited consideration (with one amendment) plus certain other cash payments, discussed below, that had been agreed on extrinsically to the written instrument. For several weeks prior to October 13 the Buyers, with the knowledge of Seller, had been negotiating for a sale of the corporation to Sylvania Commercial Electronics Corporation, a much larger company. The Buyers had represented to Sylvania that they would be able to deliver all the stock of Aboussie Brothers. Within a few weeks after October 13, the Buyers reached an agreement with Sylvania, which was closed out in early 1967 by a sale to it of all the corporate assets. Buyers then liquidated Aboussie Brothers, and received therefrom $541,051.14, from which they paid expenses in connection with the sale, producing a net amount per share of stock substantially in excess of the 75 cents per share paid to Seller.
Seller sued the Buyers in the United States District Court for the Northern District of Texas, asserting two claims: that the Buyers breached a contract with him to pay to him one-third of the net proceeds of the sale to Sylvania less $75,000, and that they violated Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated pursuant to § 10(b) of the Securities Act of 1934, 15 U.S.C. § 78j.
At trial the jury answered special interrogatories as follows:
The District Court granted the motion of defendants for judgment n/o/v, on the sole ground that "the Court finds that, as a matter of law, no consideration existed for the agreement mentioned in Special Issue No. 5." The Court's order did not mention the 10b-5 claim.
The order granting the defendants' motion for judgment n/o/v states only that no consideration existed for the agreement to divide profits. The trial judge may have thought that there had to be consideration for that agreement independent of the Seller's written undertaking to sell his stock. Or, the judge may have thought that, although the consideration for the extrinsic agreement to divide profits1 could be the written promise of Seller to transfer his stock, there was insufficient evidence for the jury to conclude that such written promise actually was the consideration. Under either hypothesis the District Court erred.
It now has been established that in connection with the Buyers' purchase of the Seller's stock there was a tripartite agreement, consisting of the formal written agreement, extrinsic agreements concerning Seller's claims for back salary and expenses, and the extrinsic agreement to divide the profits on the Sylvania sale.
Execution of the formal written agreement is not disputed. As to the extrinsic agreements concerning salary and expenses, the exhibits before us reveal that prior to October 13 the Seller wrote the Buyers that he would sell his stock only if he was paid $5,000 which he claimed as back salary and which the corporation denied owing him, and $430.31 expenses incurred by him on behalf of the corporation. These items were not mentioned in the formal instrument. When the attorney for Buyers closed the transaction on October 13, he delivered releases from the bank on the personal and corporate notes, title to the car, a cashier's check for $28,000 plus a promissory note of the Buyers for $10,000 (these in lieu of the $38,000 cash agreed), all of these being the items covered by the written agreement. But at the same time he also delivered checks for the $5,000 salary claim and the $430.31 expenses. The attorney secured one receipt from Seller for all items.
Turning to the agreement to split the profits of the Sylvania sale, whether that agreement was made is not a question at this juncture. The jury found that it was made.1A
This is not an instance of parties totally integrating into one written instrument all of their agreements on the subject matter and assenting to that document as the full and complete statement of everything that they have agreed upon. See 3 Corbin, Contracts, § 573; 4 Williston, Contracts, (3d ed.) § 633. Extrinsic evidence was, of course, admissible to make the threshold determination of whether the formal agreement was the total agreement or less than all of what had been agreed upon, 3 Corbin, Contracts, §§ 573, 582, 583. The fact that it was not the total agreement is established by the jury finding that the profit splitting agreement was made and the undisputed evidence of the extrinsic agreements concerning salary and expenses.
Parties can make their contracts in such forms as they see fit,2 and if they wish they can reduce some agreements to writing and leave others to oral expression and still others to partially oral and partially written form. A written agreement, though not a complete integration, may be the complete statement of certain things that have been negotiated out and agreed upon — the so-called "partial integration."3 But in this instance it is undisputed that the formal agreement was not an all-inclusive statement of the obligations to which the Buyers were committing themselves in consideration for Seller's transfer of his stock, because in addition to what they agreed to do on the face of the paper the Buyers agreed also to pay $5,000 salary and $430.31 expenses (and actually paid these amounts as part of the same closing transactions.)
Of course, there can be separate agreements touching the same general subject matter, one or more written and one or more oral, each supported by independent consideration.4 3 Corbin, Contracts, § 594 at p....
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