Ferguson v. von Seggern

• Citation: 434 S.W.2d 380
• Decision Date: 25 October 1968
• Docket Number: No. 17127,17127
• Parties: Donn Q. FERGUSON and Lindley C. Ferguson, Independent Co-executors of the Estate of L. C. Ferguson, Appellants, v. E.F. von SEGGERN and Angus G. Wynne, Appellees. . Dallas
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 380

434 S.W.2d 380

Donn Q. FERGUSON and Lindley C. Ferguson, Independent Co-executors of the Estate of L. C. Ferguson, Appellants, v. E.F. von SEGGERN and Angus G. Wynne, Appellees.

No. 17127.

Court of Civil Appeals of Texas Dallas.

Oct. 25, 1968.

Rehearing Denied Nov. 22, 1968.

John R. Feather, of Stroud & Smith, Dallas, for appellants.

Byron L. Williams, of Lyne, Klein & French, Neil D. Anderson and Morris I. Jaffe, of Wynne, Jeffe & Tinsley, Dallas, for appellees.

CLAUDE WILLIAMS, Justice.

Action for specific performance of an option to purchase common stock of a closely held domestic corporation. The suit was originally instituted by L. C. Ferguson complaining of E.F. von Seggern, defendant, and joining Angus G. Wynne as a party designated 'custodian'. Thereafter L. C. Ferguson died and Donn Q. Ferguson and Lindley C. Ferguson, independent Co-Executors of the Estate of L . C. Ferguson, Deceased, were substituted as parties plaintiff. At the conclusion of the presentation of plaintiffs' testimony before the court and a jury the trial court sustained defendant's motion for instructed verdict, withdrew the case from the jury, and denied plaintiffs any relief.

FACTS

At all times material hereto Ferguson Realty Company was a Texas corporation, engaged primarily in the real estate investment business, having 160 shares of stock outstanding. With the exception of 53 1/3 shares the remaining stock in the company was owned by L. C. Ferguson and his sons, Lindley C. and Donn Q. Ferguson. On August 20, 1964, appellee E.F. von Seggern executed a written instrument entitled 'Option Agreement' in which, for a valuable consideration, she granted to L. C. Ferguson, individually, an option to purchase the 53 1/3 shares of the common stock owned by her. The period of time granted to Ferguson to exercise his option was from the date of the signing of the instrument until twelve o'clock noon, July 1, 1970, or at any time prior to Ferguson's death, whichever should occur first. In the agreement appellee von Seggern agreed to deliver the certificates to Angus G. Wynne 'to hold during the term of this option agreement, and hereby grants Mr. Wynne the authority to hold and relinquish said shares on her behalf in accordance with the terms of this agreement.'

Paragraph 3 of the Option Agreement provided that: 'If Grantee elects to exercise his option he shall do so by giving Grantor written notice of his determination to elect to exercise the option.'

To determine the purchase price of the shares the parties agreed in Paragraph 4 of the Option Agreement, to the following procedure:

'4. Purchase Price. The purchase price payable by Grantee for the shares of stock being purchased shall be an amount equal to one-third of the net value of the assets of Ferguson Realty determined as follows:

'A. The parties shall obtain three independent appraisals of the real estate owned by Ferguson Realty. The appraisals shall be made by three independent appraisers each of whom is a member of M.A.I. and each of whom is selected by the Dallas Real Estate Board upon the written request of Grantee. The written request shall be made within 10 days after the option is exercised. If for any reason the Dallas Real Estate Board does not select the three independent appraisers within 20 days following receipt of the written request by the parties hereto for such selection, each party hereto shall within 10 days after expiration of the 20-day period name a qualified independent appraiser, a member of M.A.I., and each of the two appraisers so named shall name a third such qualified independent appraiser, and the three such appraisers shall thereupon appraise the real estate owned by Ferguson Realty. The appraisers will be given 45 days to submit their appraisals. If any real estate is located outside Dallas County, the same procedure will be followed in selecting appraisers from the counties in which such real estate is located. By mutual agreement the parties may appoint a single appraiser for one or more of the tracts. The value of each parcel of real estate shall be the average of the appraisals submitted thereon by the appraisers.'

It is without controversy that Mr. Ferguson elected to exercise the option and did so on July 30, 1965. Pursuant to his obligation contained in Paragraph 4A, above quoted, Ferguson made written request of the Real Estate Boards of both Houston and Dallas requesting that they select appraisers but each board failed or refused to do so. Apparently proceeding to effectuate the alternative provision contained in Paragraph 4A, above quoted, Ferguson, by letter dated September 6, 1965, advised Miss von Seggern that, 'In accordance with the provisions of the Option Agreement relating to an alternative procedure for the appointment of appraisers, I have named J. W. Dunham to appraise the Dallas County real estate.' There was no evidence that 'J. W. Dunham' was a qualified independent appraiser and a member of M.A.I. at the time of his appointment by Ferguson. The evidence revealed that the 1965 Dallas telephone directory contained a listing for one 'Joe W. Dunham' and it was stipulated that neither 'Joe W. Dunham' nor 'J. W . Dunham' was listed in the 1965 American Institute of Real Estate Appraisers' M.A.I. directory. Appellants' plaintiffs in the trial court, offered in evidence for all purposes a letter dated September 7, 1965 by one of appellees' counsel, Mr. Morris I. Jaffe, addressed to the attorneys for appellants, in which said attorney stated that it was his opinion that Ferguson's letter of September 6, 1965 appointing appraisers did not comply with the Option Agreement in that the appraisers so named were not 'qualified independent appraisers' as contemplated by the option. In this letter Mr. Jaffe made reference to 'H. W. Dunham' and pointed out that since Mr. Ferguson and Miss von Seggern had previously mutually employed both H. W. Dunham and M. H. James to appraise the real estate involved such fact would deprive the appraisers so named of occupying the status of 'independent appraisers'. Appellants contended in the trial court, as they do here, that since Mr. Jaffe referred to 'H. W . Dunham', who was admittedly a member of M.A.I., that the act on the part of Ferguson in referring to Dunham as 'J.W.' was of no consequence and not fatal to the exercise of appointment of appraiser as provided for in the agreement.

On February 10, 1966, Ferguson again addressed a letter to Miss von Seggern advising her that, 'Last August I named an appraiser, J. W. Dunham, to appraise the Dallas County real estate, * * *' and that, having recently learned that Mr. Dunham had died he was naming Mr. Will H. Mullenweg to take the place of Mr. Dunham. It was stipulated by the parties that Will H. Mullenweg was not a member of M.A.I.

Prior to writing the February 10th letter, referred to above, Mr. Ferguson had instituted suit in the District Court of Dallas County on February 1, 1966 against Miss von Seggern in which he sought specific performance of the option contract. Subsequently, in May of 1966, this suit was dismissed.

On June 28, 1966 Ferguson again wrote Miss von Seggern in which he said, in part:

'This letter is written to you subject to my letter to you of July 30, 1965, in which I exercised my option to purchase your fifty-three and one-third (53 1/3) shares of stock in Ferguson Realty Company, pursuant to our Agreement of August 20, 1964 * * *.

'Although I completely disagree with any suggestion that I have not exercised my option under our Agreement of August 20, 1964, and although I feel that I have complied with the provisions of that Agreement, I am nevertheless (subject to my letter to you of July 30, 1965, and my efforts since that date) hereby exercising my option by giving you written notice of my determination to elect to exercise the option pursuant to Section 3 of our Agreement of August 20, 1964 * * *.

'Without in any way waiving the rights which I have by virtue of the exercise of my option on July 30, 1965, and subject to my position that I have properly exercised this option, if for any reason I have not previously exercised my option, then I hereby exercise my option by giving you this written notice.'

Thereafter, by letter dated July 7, 1966 and letter dated July 8, 1966, Mr. Ferguson and his attorneys requested both the Houston and Dallas boards of realtors to appoint three appraisers to appraise the Dallas County and Harris County real property involved. While some question was presented during the trial as to whether appraisers were properly and legally appointed by these boards, certain appraisals were made and submitted to Mr. Ferguson. On September 21, 1966 Mr. Ferguson wrote Miss von Seggern advising her that he had the appraisals and asked her to come to his office to compute the purchase price pursuant to the Option Agreement. Responding to this letter appellee Wynne wrote Mr. Ferguson on September 26, 1966 advising that Mr. Ferguson's letter of September 21, 1966 was the first communication received by Miss von Seggern from Mr. Ferguson since his letter of June 28, 1966 and requesting Mr. Ferguson to furnish copies of request for appraisals, the identity of the appraisers, and any appraisals actually made. Ferguson replied to Mr. Wynne by letter dated September 28, 1966 in which he declined to furnish the appraisals, except at his office, because they were 'bulky and heavy and it would be more convenient for her to look at these at my office.'

By letter dated February 14, 1967 counsel for Miss von Seggern advised counsel for Mr. Ferguson that Miss von Seggern did not and had never questioned the validity of the contract but took the position that Mr. Ferguson had failed to timely perform the conditions precedent to Miss von Seggern's duty of performance. The letter also presented a question of substantial delay in the consummation of the agreement.

The instant suit, seeking...