Early v. Moor

• Decision Date: 23 May 1924
• Citation: 144 N.E. 108,249 Mass. 223
• Parties: EARLY v. MOOR.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

249 Mass. 223

144 N.E. 108

EARLY

v.MOOR.

Supreme Judicial Court of Massachusetts, Suffolk.

May 23, 1924.

Appeal from Superior Court, Suffolk County; M. Morton, Judge.

Bill for specific performance by Frederick B. Early against Agnes A. Moor, as executrix of the estate of Emil Moor, deceased, of an agreement between plaintiff and defendant's testator. From an interlocutory decree confirming report of master, and final decree for plaintiff, defendant appeals. Affirmed.

N. L. Sheldon, of Boston, for appellant.

J. E. McConnell and R. L. Mapplebeck, both of Boston, for appellee.

CROSBY, J.

This is a bill for specific performance of an agreement between the plaintiff and the defendant's testator. The plaintiff and Emil Moor, the testator, on April 17, 1920, each owned or controlled 250 shares of the capital stock of Early & Moor, Inc., a Massachusetts corporation, and on that date entered into a written agreement, a material part of which is as follows:

‘1. Each of said parties agrees that, in case of the decease of the other, the survivor will purchase and acquire the entire capital stock owned or controlled by such deceased party in said corporation at the time of his decease and will pay to the executor or administrator of said deceased party or to such person or persons as may be by law entitled thereto the fair book value of said stock of said deceased party, the same to be ascertained by the regular and usual methods employed in the business of said corporation to ascertain the net worth of said corporation and the fair value of its said stock, and will pay the said purchase price therefor as follows: By three collateral notes of said survivor, each for one-third of said purchase price, bearing interest at the rate of six (6) per cent. per annum, payable quarterly, and maturing in one, two and three years respectively, and secured by the entire capital stock of said corporation owned by said survivor, the same being pledged as collateral security with and for said notes and each of them. Said notes shall contain the right of prepayment.’

Moor died on June 9, 1921. The book value of the entire capital stock on that date, without deduction for depreciation in the value of the merchandise or for worthless or doubtful accounts receivable, was $51,059.23. The defendant contends in her answer that, under the terms of the agreement, she is entitled to one-half of that amount as the fair value of the stock owned by the testator.

It is the contention of the plaintiff that the fair book value on June 9, 1921, is to be determined by charging off depreciation and bad debts; that the depreciation is the difference between the prices of merchandise carried as book value and the fair market value on that date; that after making such deduction and for bad debts, the total value of the capital stock was $26,291.43, and that one-half of that sum was the fair book value of Moor's stock at the time of his death.

The case was referred to a master, who made alternative findings as follows:

‘The merchandise is carried on Exhibit 5 at its market value on June 9, 1921, and the bills receivable in that exhibit constitute substantially all the bills receivable that were good on that date. If in determining the fair book value of the defendant's stock in the corporation under the agreement of April 17, 1920, the value of the merchandise is to be determined solely from its market value on the day of Mr. Moor's death, June 9th, without taking into consideration the sales during the remainder of the month of June and early in July, and without taking into consideration the rise in values that began almost immediately after his death, then 1 find that the value of the stock of the corporation was $26,291.43 and the value of Mrs. Moor's half thereof was $13,145.72, the amount offered by the plaintiff in his bill of complaint. If, however, in determining the fair book value of the defendant's stock in the corporation, I am at liberty to consider evidence showing the rise in value of the merchandise during the month of June, and the actual sales during that month and the early part of July, and if that evidence was properly admitted, then I find the fair book value of the stock of the corporation to be the sum obtained from the statement of June 30th, for the entire month of June, to wit, $42,267.95, and the value of Mrs....