Haglin v. Ashley

• Decision Date: 15 May 1942
• Docket Number: No. 33206.,33206.
• Citation: 4 N.W.2d 109,212 Minn. 445
• Parties: HAGLIN et al. v. ASHLEY et al.
• Court: Minnesota Supreme Court

4 N.W.2d 109

212 Minn. 445

HAGLIN et al. v. ASHLEY et al.

No. 33206.

Supreme Court of Minnesota.

May 15, 1942.

Rehearing Denied May 29, 1942.

Appeal from District Court, Hennepin County; A. W. Selover, Judge.

Suit by Margaret W. Haglin, and others, against L. S. Ashley, and another, to compel specific performance of an agreement to sell certain stock. From an adverse judgment, the named defendant appeals.

Affirmed.

Ernest A. Rich, of Minneapolis (Fletcher, Dorsey, Barker, Colman & Barber, of Minneapolis, of counsel), for appellant.

Snyder, Gale & Richards, of Minneapolis, for respondents.

JULIUS J. OLSON, Justice.

Plaintiffs' suit to compel specific performance of an agreement to sell certain shares of stock in Northwestern Casket Company resulted in findings and judgment against defendant Ashley. Although Ashley and Downer were both named as defendants, process could not be served upon Downer because he was a resident of New York, and he refused to become a voluntary party. Accordingly, we shall refer to Ashley as the defendant. His motion for amended findings being denied, judgment was entered, and he appeals.

As its name implies, the casket company, a domestic corporation, is engaged in the business of manufacturing and selling caskets. Nine thousand shares of common stock, at $50 per share par value, have been issued and are outstanding. The stock has never been listed on any stock exchange. It has no established market value. The ownership is held by relatively few persons. The actual value of the stock, which is not readily ascertainable, is rather conjectural and problematical. Although the book value as shown by the corporation's last annual audit was $56.85 per share, defendant in his verified answer alleged that it was of the value of not more than $21 per share.

Stock ownership lies largely in the hands of two main groups. Plaintiffs', known as the "Williams group," represents the ownership of 2,882 shares; defendant's, known as the "Johnson group," represents 4,651 shares. The remaining 1,467 shares are held by divers persons not involved in this litigation.

Disagreement having arisen between the two principal groups, negotiations were carried on between them through their respective counsel, Mr. James I. Best representing plaintiffs' group, and Mr. Orren E. Safford the Johnsons. Both are lawyers of recognized ability and integrity. Oral negotiations had so far progressed between them that on March 27, 1941, defendant, through Mr. Safford, his attorney and duly authorized agent, wrote plaintiffs' firm of attorneys the following letter:

                "Messrs. Best, Flanagan & Rogers
                 "Rand Tower
                  "Minneapolis, Minnesota
                   "Attention Mr. James I. Best
                

"Dear Mr. Best:

"Confirming the conversation I had with you today I advise you that Mr. Ashley and Mr. Downer offer to your clients to sell the shares of Northwestern Casket Company owned by them for $21.00 per share cash. Mr. Ashley informs me that the purchasers of his stock must agree to purchase other stock on the same basis to the extent of 4,651 shares in all.

"Mr. Ashley has authorized me to tell you that every facility will be extended to any persons your clients nominate to make an investigation of the value of the shares of the Company. With this offer to sell is the offer to buy your clients' stock at the same price — that is, $21.00 per share.

                  "Yours very truly
                   "Orren E. Safford" (Italics supplied.)
                

From the date of that letter until May 2, plaintiffs, with the knowledge and consent of defendant, employed an auditor to investigate the value of the stock by making an examination of the company's books and records and preparing an analysis of its accounts receivable. This having been done, on May 2, 1941, Mr. Best, in behalf of plaintiffs' group, wrote Mr. Safford as follows:

                "Mr. Orrin E. Safford
                 "First National Soo Line Bldg.,
                   "City.
                

"Dear Mr. Safford:

"Referring to your letter to me of March 27th, wherein you advised me that Mr. Ashley and Mr. Downer offered to my clients to sell the shares of Northwestern Casket Company owned by them for $21.00 per share cash, I wish to advise you that my clients accept such offer to sell and tender you the purchase price. Wish to further advise you that the purchasers of Mr. Ashley's stock agree to purchase other stock on the same basis to the extent of 4,651 shares in all.

                                      "Yours very truly,
                                        "James I. Best."
                

On that day plaintiffs and their counsel duly tendered to Mr. Safford, defendant's attorney and agent, $23,625 in cash, the purchase price of his 1,125 shares at $21 per share, and demanded performance. Ever since then plaintiffs have kept their tender good, and they are now and always have been ready, able, and willing to pay not only for the 1,125 shares owned by Ashley but likewise all the shares represented by his entire group.

The court construed the letter of March 27 as an offer to sell all the shares owned by Mr. Ashley "on condition that plaintiffs also agree to purchase other shares of said corporation on the same basis to the extent of 4,651 shares in all, thereby giving the holders of such shares the opportunity to sell their shares on said basis if they should desire to do so"; and it construed the letter of May 2 as an acceptance of that offer, thus constituting a completed and enforceable contract.

The findings are challenged as being without support, in that the two letters do not constitute an agreement to sell and purchase; that no valid offer was ever made; that the letter of March 27 is a joint offer of defendant's and Downer's stock and that Downer never authorized said letter; hence that no valid joint offer was made; that Best, as plaintiffs' agent, knew that Safford either exceeded his authority or made a mistake in making it; that the purported offer of March 27 was never ratified by defendant; that even if there was a valid offer it...