Duchemin v. Kendall

• Decision Date: 09 May 1889
• Citation: 149 Mass. 171,21 N.E. 242
• Parties: DUCHEMIN v. KENDALL.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

149 Mass. 171

21 N.E. 242

DUCHEMIN v. KENDALL.

Supreme Judicial Court of Massachusetts, Suffolk.

May 9, 1889

May 9 1889

HEADNOTES

COUNSEL

C.M Perry, for plaintiff.

A Eastman, for defendant.

OPINION

MORTON, C.J.

By the contract sued on the defendant agrees to secure to the plaintiff a bona fide bid of $5,000 for 500 shares of the Addax Basting Machine Company stock, within 12 months from date; or, in case of failure to do so, to take from him, at his option, said 500 shares of stock for $5,000 one year from the date of the contract. It was dated August 9, 1886. At this time the plaintiff was the equitable owner of 1,000 shares of the stock. This stock stood in the name of the defendant and James F. Bliss, who held it in trust for the plaintiff, who had an equitable interest in it which was assignable; and his agreement to assign and transfer 500 of such shares to the defendant, and the execution of this agreement, as set out in the report, furnished a sufficient consideration for the agreement sued on. The defendant contends that this agreement of the plaintiff is void under section 6, c. 78, Pub.St. This statute provides that every contract for the sale of stock shall be void unless the party contracting to sell or transfer the same is at the time of making the contract the owner or assignee thereof, or authorized by the owner or assignee or his agent to sell or transfer the same. If we construe the report most favorably to the defendant, the facts appear to be as follows: The plaintiff was the equitable owner of 1,000 shares of the stock which stood in the name of Bagley, who was a naked trustee. Bagley, with the consent of the plaintiff, had, by an instrument dated February 27, 1886, a copy of which is annexed to the report, assigned or agreed to assign the said stock to the defendant and Bliss as trustees, with power to sell it and account to the owner for the proceeds, or, if not sold within a year, to return it to the owner, his representatives or assigns. The agreement of the plaintiff operated as an agreement to sell 500 shares of the stock subject to this power. When executed it transferred to the defendant all the interest which the plaintiff had in such stock. Such must have been the understanding of both parties. The plaintiff had a right thus to sell his interest. He was the owner of it, and fully authorized to make the sale which he did. The case does not fall within the letter or the spirit of the statute, the purpose of which was to prevent gambling in stocks. The defendant further contends that the plaintiff cannot recover, because he did not make a tender of the shares at the end of the year. The defendant's promise was that he...