Griffin v. Bankers Realty Inv. Company
| Decision Date | 23 December 1920 |
| Docket Number | 21190 |
| Citation | 181 N.W. 169,105 Neb. 419 |
| Parties | MARY M. GRIFFIN, APPELLEE, v. BANKERS REALTY INVESTMENT COMPANY, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Douglas county: CHARLES LESLIE JUDGE. Affirmed.
AFFIRMED.
Isidor Ziegler, for appellant.
Sutton McKenzie, Cox & Harris and Ralph E. Weaverling, contra.
This is a law action. On August 11, 1915, Mary M. Griffin, plaintiff herein, purchased from defendant, Bankers Realty Investment Company, 1,000 shares preferred capital stock of defendant at $ 1.20 a share. Also on December 27, 1917, she purchased 50 shares more at $ 1.20 a share.
In paragraph two of plaintiff's petition she alleges as follows: "That on or about the 12th day of August, 1915, the defendant, by and through its agent Smith, entered into an oral contract and agreement with the plaintiff, whereby it agreed with the plaintiff that the plaintiff was to purchase from the defendant a certificate of stock in said defendant company for the sum of $ 1,200, and the said defendant on its part agreed that, if the plaintiff should at any time thereafter, within a period of four years, desire to return said stock to the said defendant, the said defendant would pay to plaintiff, upon demand, the amount so paid by the plaintiff to the defendant, with interest thereon at the rate of seven per cent. per annum from the date of purchase to the date of demand."
It was orally agreed further that, if at any time after one year plaintiff should desire to return the stock to the defendant, plaintiff should give three days' notice in writing to the manager of the resale fund of such intention.
In compliance with the oral contract which the parties entered into, plaintiff desired to obtain from defendant the sum of $ 300. She made a demand for the same as provided in her oral contract for the return of $ 300 and interest. The defendant, strictly in conformity with this oral contract, did return to plaintiff $ 300 and interest.
It is admitted that pursuant to this oral contract plaintiff purchased from defendant 1,000 shares of stock, and that she did return to the defendant the stock so purchased by her, and demanded payment of the money by the defendant to the plaintiff and interest thereon from the 15th day of October, 1918, less certain sums stated which defendant acknowledged was paid to plaintiff. The defendant company was represented in this transaction by an agent named Smith who sold the 1,000 shares of stock, together with another 50 shares, at $ 1.20 a share. It is admitted that plaintiff purchased these shares. The defendant delivered this stock to the plaintiff and plaintiff paid the money, the purchase price, and the defendant accepted the same. Under this state of facts the case was tried to a jury under instructions of the court, and the jury rendered a verdict for $ 877.86, and from this judgment defendant appeals.
Appellant in the beginning lays down the proposition of law that one who deals with an agent, knowing that he is clothed with certain circumscribed authority, cannot hold the principal where the act of the agent transcends such authority. As a general proposition of law this is good, but it is not absolute under all circumstances. A limitation of this proposition would be that a contract which by its terms may be performed within a year is not within the statute of frauds. It was said in Carter White Lead Co. v. Kinlin, 47 Neb. 409, 66 N.W. 536:
A contract providing for sale which contains an agreement to repurchase this stock is one and the same transaction, and as a matter of law may be considered as constituting but a single and original contract.
The sale and agreement to repurchase by the defendant and the acceptance of stock by the purchaser constituted a part performance sufficient to take the entire transaction out of the statute of frauds. The evidence on this proposition in the record is clear and undisputed. Further in answer to defendant's proposition hereinbefore quoted, see Hankwitz v. Barrett, 128 N.W. 430 (143 Wis. 639). The law laid down in that case is as follows: "The sale and delivery of stock and payment of the price, under a contract whereby the seller agreed to repurchase at the buyer's option, constituted an entire transaction which was sufficiently performed to take it out of the statute of frauds, relating to contracts for sale of goods, though the agreement to repurchase was oral."
Further answering defendant's first law proposition we call attention to the case of Fremont Carriage Mfg. Co. v. Thomsen, 65 Neb. 370, 91 N.W. 376. This case holds: "A contract with a corporation by which it sells certain of its shares of stock and agrees to repurchase the same upon the happening of a certain specified event, is not ultra vires; and for a breach thereof the purchaser may recover of the corporation the amount agreed upon as the price of such repurchase."
In this connection we discuss the proposition that a corporation cannot be heard to contend that the sale of its stock was valid and that the contract to repurchase was void when they are made up of the same contract. In this case the corporation must approve the contract as a whole or return the purchase money and place the parties in statu quo. It is the overwhelming weight of authority that a private corporation while it may purchase its own stock, the transaction must be fair and in good faith. It must be free from fraud both actual and constructive. Porter v. Plymouth Gold Mining Co., 29 Mont. 347, 101 Am. St. Rep. 569, 74 P. 938. That case lays down the following propositions of law:
"A contract for the sale of stock by a corporation, whereby the corporation agreed to take back the stock if the purchaser should become dissatisfied therewith, is not objectionable as a secret contract between a corporation and a subscriber, by which the subscriber is at liberty to withdraw his subscription, but is valid and enforceable."
It is plain that, when a seller of stock under a contract of purchase agreed to repurchase the same from the corporation and to pay therefor the same price, the purchaser must, as a condition precedent to the right to compel the corporation to repurchase, perform all the concurrent things necessary for the redelivery to the corporation.
It must be conceded to be true as a matter of law that, where an agent practices deceit in procuring...
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