Cummings v. Hotchkin Co.
| Decision Date | 17 September 1935 |
| Citation | 292 Mass. 78,197 N.E. 473 |
| Parties | CUMMINGS v. HOTCHKIN CO. et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Exceptions from Superior Court, Suffolk County; Goldberg Judge.
Action of contract by John J. Cummings against the Hotchkin Company and trustees. Judgment for defendants, and plaintiff brings exceptions.
Exceptions overruled.
S. L Solomont and M. E. Gallagher, Jr., both of Boston, for plaintiff.
J. L. Hall, M. Jenckes, and S. L. Gwin, Jr., all of Boston, for defendant.
The plaintiff seeks in this action of contract to recover the purchase price of shares of stock in a corporation bought by him from the defendant in 1928. The case was submitted to the trial judge upon facts agreed upon by the parties and upon testimony as to the ownership of the stock when tendered. The trial judge made findings of fact and rulings of law. The plaintiff presented requests for rulings of law, two of which were granted and the others denied. The case comes before us on the plaintiff's exceptions to the ‘ rulings and findings' made by the trial judge.
The material facts are in substance these: The defendant sold the shares of stock to the plaintiff, who borrowed from the Lawrence Trust Company the money necessary to pay for them and deposited the shares as collateral for the loans. Before the purchase of the stock by the plaintiff, no notice of intention to offer for sale the stock of the corporation had been filed as required by G. L. (Ter. Ed.) c. 110A, § 5, the stock being a security not exempt from the operation of that section. Such notice was filed on September 18, 1933. It was agreed by the parties that, if such notice of intention to sell had been filed prior to the sale by the defendant to the plaintiff, the stock would have been qualified for sale forthwith. The son of the plaintiff, who acted for him in all these transactions, was in possession of full information relative to the corporation before the purchase of the stock. He was a registered salesman of securities in this Commonwealth, but had no actual knowledge that notice of intention to sell shares of stock in this corporation had not been filed until about six weeks before the commencement of the present action. Prior to the bringing of this action and before January 15, 1931, the plaintiff had received $5,212.50 in dividends on the stock purchased. He testified that from 1929 to 1933 he signed various proxies to vote at stockholders' meeting of the corporation. Certificates for the shares of stock since the purchase have remained continuously with the Lawrence Trust Company as collateral security for the note of the plaintiff or of his son, and have never been out of its possession except that certain shares were sent to a broker for sale, were not sold and were returned, and except when used for purposes of tender. The plaintiff did not tender the whole or any part of the dividends received by him on the stock until after the case was reopened for that purpose. The present action was commenced on July 21, 1933. After service had been made on the banks named in the writ as trustees, a representative of the plaintiff accompanied by a representative of the Lawrence Trust Company appeared at the office of the defendant, tendered the shares of stock to the clerk of the defendant corporation and demanded the return of the purchase price of the stock. This clerk informed the plaintiff's representative that he could not do anything about it and suggested that he return later when the other officers of the defendant corporation, who were out to lunch would return. The plaintiff's representative declined to do so and called the deputy sheriff who was waiting in the corridor outside the defendant's office. The deputy sheriff thereupon made service upon the clerk of the defendant corporation. The plaintiff's representative did not tender the sum of money received by the plaintiff as dividends on the stock, or any sum of money, to the defendant's clerk. The representative of the Lawrence Trust Company permitted the plaintiff's representative to take the stock for the purpose of making a tender to the defendant and he intended to give up possession of the stock only if simultaneously the defendant returned the purchase price of the stock. In November, 1931, various notes of the plaintiff were consolidated and a single new note signed by the son alone was given to the trust company in place of the previous notes, and the shares of stock were held in addition to other securities as collateral on this new note. No finding was made by the trial judge as to the ownership of the stock at the time of the tender.
The trial judge found and ruled that this was not a proper tender because the plaintiff did not tender the amount received by him in dividends on the stock, that the tender of the stock was made after the commencement of the present action, that the sales of the stock by the defendant to the plaintiff were voidable at the plaintiff's instance and that ‘ the plaintiff, not having made a proper tender to the defendant prior to the commencement of this action, cannot recover on any count’ of his declaration.
After the evidence was closed, upon motion by the plaintiff and in the exercise of his discretion, the trial judge ‘ reopened the case for the purpose of permitting the plaintiff to make a further tender.’ In open court the attorney for the plaintiff then tendered the shares of stock and the amount received in dividends. There were no State of Federal transfer stamps on any of the certificates of stock. The shares were brought to court by a representative of the Lawrence Trust Company and turned over to the plaintiff's attorney for the purpose of making a tender. That representative stated that the only reservation the bank placed upon the stock was that its note...
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