Giroux v. Bockler

• Decision Date: 04 January 1921
• Parties: GIROUX ET AL. v. BOCKLER.
• Court: Oregon Supreme Court

194 P. 178

98 Or. 398

GIROUX ET AL. v. BOCKLER.

Supreme Court of Oregon

January 4, 1921

In Banc.

Appeal from Circuit Court, Baker County; Gustav Anderson, Judge.

Suit by Maurice Giroux and others, as Giroux Bros., and another against Charles Bockler. Decree for plaintiffs, and defendant appeals. Affirmed.

This is a suit, among other things, to compel the specific performance of a written agreement signed by the defendant to purchase the capital stock of the Durkee Mercantile Company a corporation operating a general store at Durkee in Baker county.

The complaint, after alleging the ownership of the stock by plaintiff, sets up an agreement, which is as follows:

"This agreement made by and between Maurice Giroux, J. T. Giroux and J. I. Giroux doing business as Giroux Bros., and Charles Bockler; the said Giroux Bros. agree to sell to Charles Bockler all the capital stock of the Durkee Mercantile Company, the value of said stock to be determined by an inventory of all the merchandise at flat cost in the store, and store building and store fixtures excluding the post office fixtures, for the agreed price of $3,500 for said store building and fixtures and one acre of ground. The said Charles Bockler to pay for this stock as follows: Five thousand ($5,000) dollars, cash, balance to be settled by notes as follows: Two thousand dollars on or before April 1, 1919; one thousand dollars on or before November 1, 1919; one thousand dollars on or before November 1, 1919; [sic.] Bal. due on stock as per inventory on or before November 1, 1920, and $3,500 on or before November 1, 1921. Said notes to be deposited in the Citizens' National Bank together with the certificates of stock, and said certificates of stock held as collateral until the notes are paid. The said Giroux Bros. to assume all indebtedness and collect all accounts outstanding at the time of the transfer. It is also understood and agreed that said Charles Bockler will keep stock, fixtures and building insured for value until notes are paid. Eight per cent. interest and interest paid semiannually.

"Charles Bockler.

"Giroux Bros. by Treffle."

It is alleged that immediately after the execution of the agreement the parties thereto mutually made the inventory required therein, and thereby ascertained and determined the flat cost in the store, of the goods so inventoried to be approximately $12,000; said inventory and ascertainment of cost being completed on November 9, 1918, prior to which date defendant had paid to plaintiff in compliance with the terms of the agreement the sum of $5,000; that on said date defendant took over from plaintiffs and assumed complete possession and control of all the store building and fixtures of said company, together with all the goods and merchandise then owned by it, of all books and accounts of said company and all of its real and personal property of every kind and character whatever; and that the plaintiffs performed on their part all of the conditions of the contract, and delivered to defendant all of said property except the certificates of stock which were to be held in the Citizens' National Bank of Baker, Or., as security to plaintiffs for the purchase price of the property.

Another paragraph details with greater particularity the property turned over to defendant, and alleges that on the date of so turning over the property the plaintiffs paid and satisfied all debts, contracts, and obligations of the Durkee Mercantile Company, and passed its books to defendant completely closed up, except as in the contract otherwise provided, so that defendant took said property subject to no debts or liabilities whatever; that he acquired in addition to said store building merchandise and fixtures, valuable rights in certain executory contracts for the purchase of goods; for the lease of lands; for the insurance of property for the license to do business, and certain other choses of action; that plaintiffs completely withdrew from the business and affairs of the Durkee Mercantile Company; and that defendant has ever since been in the complete control thereof. The complaint sets forth at length the nature of the business transacted by the Durkee Mercantile Company, and alleges that in order to conduct the business profitably it was necessary that the stock of goods be kept up, the lease on the warehouse renewed, insurance on the stock kept up, and accurate accounts of the affairs of the store be kept, but charges that in these and many other particulars defendant had been negligent to the extent that there was danger that the business would become bankrupt.

It is charged that defendant sold merchandise to the amount of about $12,000, and had kept no account of such sale; that he was conducting the business in his own name and appropriating the proceeds to his own use; and that he had commingled a block of about $2,400 worth of his own goods with the stock of the Durkee Mercantile Company so that it was impossible to segregate them. In short, without going further into the prolix details of the complaint, its tenor and substance amounted to a charge that the business was being managed in a way that would ultimately destroy it, and thereby render the stock of the Durkee Mercantile Company valueless.

There was a prayer for an order enjoining defendant from further disposing of the property and merchandise; for a receiver pendente lite; for an order directing defendant to execute the notes specified in the original contract; for a sale of the goods and property on hand to pay the amount due plaintiffs; and for general equitable relief.

A general demurrer was interposed and overruled. The defendant then answered, admitting that plaintiffs were partners, but denying generally every other allegation of the complaint except as thereafter affirmatively stated. The affirmative matter in brief is this: That for about two years before the execution of the contract set forth in the complaint defendant was conducting a country store at Pleasant Valley in Baker county; that about October 5, 1918, J. T. Giroux (usually called Treffle Giroux) came to defendant's store, and offered to sell him a stock of goods and a store building at Durkee, conducted by Giroux Bros., and informed defendant that if he would buy said stock and building the plaintiffs would invoice and sell said goods at flat cost in the store, and to determine the flat cost he said that plaintiffs had and would furnish defendant the invoices and bills at the store, showing the same, and would sell defendant their store buildings, ground, and fixtures excluding post office fixtures, for $3,500; that on October 12, 1918, defendant at the request of plaintiffs went to Durkee and looked over the store buildings and location, and plaintiffs for the purpose of deceiving defendant at that time informed him that the firm had at one time carried a stock of between $10,000 and $11,000, but that at that time it had run down to about $8,000; that for the same purpose plaintiffs falsely and fraudulently represented to defendant that Giroux Bros. were doing an average cash monthly business of from $3,300 to $3,500, which said statement plaintiffs knew to be false, when in fact their cash business did not exceed $700 or $800 monthly; and that:

"The defendant had never been in plaintiffs' store before said time, and had never been in the town of Durkee but once before, and had no knowledge or information as to the volume of the cash business being conducted by the plaintiffs, and that defendant at said time was in the plaintiffs' store but a very few minutes, and did not have sufficient time to examine or investigate the same and at the said time the defendant had full and complete confidence in the said plaintiffs, and believed and relied upon the said plaintiffs' statements so made to him as aforesaid.

"That thereafter, and on or about the 25th day of October, 1918 the said plaintiff again came to the defendant's store at Pleasant Valley, Or., and again informed the defendant that the said stock of goods would invoice about the sum of $8,000, and that the cash business which the plaintiffs were doing at their said store at Durkee, Or., would average throughout the year at least $3,300 per month, and that the said firm was also doing a large credit business, and again assured the defendant that if the defendant would purchase the said stock of goods, buildings, and fixtures, the plaintiffs and the defendant would invoice the goods from the bills and invoices which the plaintiffs then had at the store at the actual cost price of said goods in the store, and that in making said invoice none of the goods which were unmerchantable or shelf-worn or unsalable would be invoiced, and that all such unmerchantable, shelf-worn, and unsalable goods would be removed from the store by the plaintiffs, and should not be included in the invoice by the plaintiffs; and the defendant at said time, believing the said statement, falsely and fraudulently made by the plaintiffs, that the plaintiffs were doing an average cash business at said store of not less than $3,300 per month, and relying upon the same, and believing that the plaintiffs would furnish the invoices and bills showing the flat cost of the goods in the store, signed the said contract mentioned in plaintiffs' complaint, and then and there paid over to the plaintiffs the sum of $1,000.

"That thereafter, and on or about the 3d day of November, 1918 the defendant went to plaintiffs' store at Durkee, Or., and with the plaintiff Treffle Giroux commenced to list the goods in said store and warehouse of the plaintiffs, leaving the flat cost price of the goods to be inserted later; and for a short time the plaintiff Treffle Giroux and this defendant...