Bass v. Ring

• Citation: 215 Minn. 11,9 N.W.2d 234
• Decision Date: 09 April 1943
• Docket Number: No. 33365.,33365.
• Parties: BASS v. RING et al.
• Court: Minnesota Supreme Court

9 N.W.2d 234

215 Minn. 11

BASS v. RING et al.

No. 33365.

Supreme Court of Minnesota.

April 9, 1943.

Appeal from District Court, Hennepin County; W. W. Bardwell, Judge.

Action by Joseph A. Bass against M. J. Ring and another to recover a balance due under a contract for the sale of shares of corporate stock, wherein defendants filed a counterclaim. Judgment for plaintiff, and defendants appeal.

Affirmed.

See, also, 299 N.W. 679, 210 Minn. 598.

Arthur H. Lindeman, of Minneapolis, for appellants.

Snyder, Gale & Richards and Edmund T. Montgomery, all of Minneapolis, for respondent.

HENRY M. GALLAGHER, Chief Justice.

Action to recover a balance due under a contract for the sale of shares of corporate stock. Defendants counterclaimed, asking that plaintiff contribute his share toward certain expenses arising out of the corporate business. Specific questions were submitted to a jury, and the trial court thereafter made findings of fact adopting the jury's determination thereof and conclusions of law in favor of plaintiff. Judgment was entered for plaintiff, and defendants appeal therefrom.

In 1926 plaintiff and defendant M. J. Ring formed a partnership for the purpose of carrying on the construction business. Contracts were obtained in the name of Ring, who received 60% of the net profits and plaintiff 40%. In February, 1933, the parties organized a corporation known as the Ring Construction Company, in which Ring and his wife, the other defendant, held 60% of the stock and Bass 40%. The business continued to be that of contracting for and the construction of large buildings throughout the country. On May 31, 1935, plaintiff sold his stock to defendants for the sum of $54,912.68, all of which was paid except $15,000, which was retained by defendants for purposes expressed in the sale agreement, the applicable portions of which read:

"The parties of the second part have paid to the party of the first part for and on account of the purchase price of said capital stock, the sum of $39,912.68, receipt whereof is hereby acknowledged. The difference between the amount paid and the sum stated by the parties under the provisions of this agreement as the book value of said stock, to-wit: the sum of $15,000.00, shall be retained by the parties of the second part as a fund for the purpose of guaranteeing the payment by party of the first part of 40% of the cost of litigating, adjusting and/or settling certain claims against second and third parties [defendants] now pending or which might hereafter be asserted against them by W. C. Hill, Lillian Crane, or other litigation in connection with the construction and erection of the Kansas City Postoffice job at Kansas City, Mo., together with the claim of the Texas Quarries in connection with the Galveston job, and for the payment of 40% of all expenses and costs incurred in connection with the adjustment and/or litigation of said claims, including counsel fees, provided that no settlement of said claims or payments from said account shall be made without the joint consent and approval of first and second parties, and provided further, that 40% of any sums realized by second or third parties on said claims, or from the Surety Company furnishing the bond of W. C. Hill in connection with said job, shall be added to and become a part of said fund."

The agreement further provides that upon "complete adjustment and settlement of the claims referred to * * * and the deduction from said $15,000 fund, * * * of 40% of all expenses and costs in connection therewith, the total sum remaining * * * shall be paid over to the party of the first part," and the parties of second part will submit therewith "a true, full and correct accounting for said $15,000 fund, including all payments and withdrawals therefrom, charges and additions thereto."

The present action is to recover the money retained less the amounts properly deductible therefrom under the purchase agreement. It is agreed that the $15,000 fund has been increased by plaintiff's proportionate share of the amount realized from the surety company furnishing the bond of W. C. Hill, so that it now amounts to $17,000. It was stipulated before the trial that certain items of expense were properly chargeable against plaintiff's fund to the extent of 40% thereof, such items totaling $6,203.35, and during the trial it was further stipulated that 40% of certain other items amounting to $12,283.10 might be charged against the fund.

Various items of expense were submitted to the jury, who made specific findings thereon, allowing some and disallowing others, in whole or in part. The trial court made findings of fact adopting the jury's answers to the specific questions submitted and conclusions of law, upon which judgment was entered for plaintiff. Defendants assert that the trial court erred in (1) denying their motion for leave to amend their answer; (2) excluding certain evidence offered by them; (3) denying their motion for new trial on the ground that the evidence does not sustain the findings.

1. Defendants sought to introduce evidence of costs and expenditures which had been incurred in connection with various construction jobs but which were not attributable to "the cost of litigating, adjusting, and/or settling certain claims" against defendants, as provided in the agreement of May 31, 1935,...