Fitzsimmons v. Lindsay
| Decision Date | 05 January 1903 |
| Docket Number | 187 |
| Citation | 54 A. 488,205 Pa. 79 |
| Parties | Fitzsimmons, Appellant, v. Lindsay |
| Court | Pennsylvania Supreme Court |
Submitted November 7, 1902.
Appeal, No. 187, Oct. T., 1902, by plaintiffs, from decree of C.P. No. 2, Allegheny Co., July T., 1901, No. 766, dismissing bill in equity in case of J. O. Fitzsimmons et al. v. David G. Lindsay et al. Affirmed.
Bill in equity for specific performance.
RODGERS J., filed the following opinion:
This is a bill filed by J. O. Fitzsimmons, Thomas McMurray, A. J Bihler and George W. Diehl against David G. Lindsay administrator of the estate of John S. Lindsay, deceased, and A. W. Lorentz, guardian of Mary A. Lindsay, a minor child and sole heir at law of said decedent. Thomas McMurray et al executors and trustees under the will of James C. Lindsay, deceased, and James C. Lindsay Hardware Company, a corporation, are only nominal parties.
It appears that the James C. Lindsay Hardware Company has a capital stock of $150,000, and that on April 13, 1895, James C. Lindsay, John S. Lindsay, J. O. Fitzsimmons, Thomas McMurray, A. J. Bihler and George W. Diehl were the owners of all its stock, and on that date these stockholders entered into an agreement for the evident purpose of continuing the concern as a close corporation, and provided therein that in the event of the death of any one or more of the parties the remaining stockholders should have the option to purchase and acquire the stock of the deceased party at its book value. This book value, it was further provided, should be ascertained by mutual agreement, but in case no agreement could be arrived at then each of the parties should have the right to appoint an arbitrator, who, with power to select an umpire, should fix a price for the stock, and the surviving parties should then have a right to take or refuse the stock at the price so determined.
John S. Lindsay was the owner of 225 shares of the stock and died on November 23, 1900, and David G. Lindsay was appointed administrator of his estate and A. W. Lorentz was appointed guardian of the estate of his minor daughter, Mary A. Lindsay. The plaintiffs thereupon notified the administrator and guardian of their desire to purchase the stock, but were unable to secure an agreement as to price, whereupon the plaintiffs made demand upon the administrator and guardian for the appointment of arbitrators to fix a price on the stock. This the administrator and guardian refused to do, and the plaintiffs now seek to compel the administrator and guardian to select an arbitrator and go into an arbitration. To this bill David G. Lindsay, the administrator, files a demurrer.
We are constrained to sustain the demurrer on the ground that the agreement to submit to arbitration is revocable, and it appears in the bill that the administrator has revoked it. [*] As was said by Mr. Justice CLARK in the case of Commercial Union Assurance Company v. Hocking, 115 Pa. 407, "But it is equally true, that where the agreement in question does not provide for submitting matters in dispute to any particular person or tribunal named, but to one or more persons to be mutually chosen by the parties, it is revocable by either party; and such a provision is not adequate to oust the jurisdiction of the courts having cognizance of the subject-matter of the dispute."
Demurrer is sustained.
Error assigned was decree dismissing bill.
Decree affirmed.
John D. Brown, for appellants. -- An agreement substantially the same as the present was sustained in New England Trust Co. v. Abbott, 162 Mass. 148 (38 N.E. Repr. 432).
The plaintiffs seek to enforce their option or right to acquire title to the shares of stock held by John S. Lindsay at the time of his death. If the agreement be valid, the title to the said stock is in dispute, and under these conditions, it is clear that equity has jurisdiction: Willard's Appeal, 65 Pa. 265; Odd Fellows' Savings Bank's Appeal, 123 Pa. 356; Tyson's Estate, 191 Pa. 218.
As to the legality of the contract and the right of plaintiffs to ask specific performance thereof, it seems to us there can be no doubt. The case of New England Trust Co. v. Abbott, 162 Mass. 148 (38 N.E. Repr. 432), is directly in point.
Thomas C. Lazear, Charles P. Orr and Jesse T. Lazear, for appellee. -- To entitle a party to a decree for a specific performance, the contract must be mutual; both parties must have a right to compel specific performance. Bodine v. Glading, 21 Pa. 50; Ballou v. March, 133 Pa. 64.
Courts of equity will not enforce agreements to submit controversies to arbitration, or to refer unsettled questions of price and values to arbitrators, especially if the agreement is executory. Federal Oil Co. v. Western Oil Co., 112 Fed. Repr. 373.
An agreement among stockholders not to sell or transfer their stock without the unanimous consent of all parties signing the agreement, is a restraint on alienation, and void as against public policy: 1 Weimer's Pennsylvania Corporation Law, 237; Fisher v. Bush, 35 Hun (N.Y.), 641.
We submit that the orphans' court has exclusive jurisdiction of the matters complained of in this case: Hammett's Appeal, 83 Pa. 392; Phillips v. Allegheny Valley R.R....
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