Harris v. Puget Sound Bridge & Dredging Co.

• Decision Date: 05 December 1934
• Docket Number: 25113.
• Citation: 38 P.2d 354,179 Wash. 546
• Court: Washington Supreme Court
• Parties: HARRIS v. PUGET SOUND BRIDGE & DREDGING CO.

38 P.2d 354

179 Wash. 546

HARRIS v. PUGET SOUND BRIDGE & DREDGING CO.

No. 25113.

Supreme Court of Washington

December 5, 1934

Department 2.

Appeal from Superior Court, King County; Wm. A. Huneke, Judge.

Action by Ernest N. Harris against the Puget Sound Bridge & Dredging Company. From the judgment rendered, both the plaintiff and the defendant appeal.

Affirmed in part, and reversed in part, in accordance with opinion.

BEALS C.J., dissenting.

Battle Hulbert & Helsell, of Seattle, for plaintiff.

Roberts & Skeel and Wm. Paul Uhlmann, all of Seattle, for defendant.

HOLCOMB Justice.

This action was brought by appellant to recover against respondent upon two causes of action stated in the complaint. In his first cause of action appellant seeks to require respondent to repurchase five shares of 7 per cent. cumulative participating, preferred stock of George Hotel Company, Limited, issued to him. In the second cause of action he sues to require respondent to repurchase ten shares of the same class of stock issued to a Mrs. Rogers, at the request of her husband, J. W. Rogers, who bought and paid for the stock. Both Rogers and his wife assigned their rights of action, if any, to appellant.

The rights asserted by appellant are based upon a letter given by respondent to its employees, dated April 21, 1926, which was upon the letterhead of respondent and signed by it by its then vice president and general manager. It is as follows:

'To the Employees of the Puget Sound Bridge and Dredging Company and of The Dredging Contractors Limited:

'This company is in a position to offer to its employees the opportunity to purchase seven per cent Cumulative Participating Preferred Stock of the Georgia Hotel Company Limited, of Vancouver, British Columbia, and has reserved therefor a block of $50,000 par value stock.

'This stock carries with it a bonus of twenty per cent of common stock of the Georgia Hotel Company Limited, in which the ownership of the hotel rests.

'The officers of the company have been mindful of the fact that many of its employees would like to participate in the affairs of the company to a greater degree than they have been able to do in the past, and it is with this thought in mind that the stock is being offered for sale at par on a monthly payment basis, or for cash, as may be desired by the purchaser, a subscription blank being attached hereto on which the purchaser can express his preference. We suggest that the stock be bought on a monthly payment plan of ten per cent cash and ten per cent per month until it is paid for. This suggestion is optional with the purchaser.

'Six per cent interest will be paid by the company on the funds paid in as part payment on the stock, and when the purchase price is completed the stock would be delivered and bear seven per cent interest from said date of delivery.

'Should any of our employees find it necessary to sell this stock, it will be bought back on the same terms at which we are selling it; namely, par plus the common stock bonus. On this basis, this should be an attractive investment.

'Kindly fill out the blank enclosed, being particular to give the full name of the person in whom the title to the stock should rest and the terms on which it is desired to make the purchase.

'As the value of the stock is $100.00 per share, subscriptions should be made so that it will not be necessary to sell a partial share of stock to any one. Subscriptions as low as $100.00 will be accepted.'

Pursuant to this offer, appellant, on July 10, 1926, purchased five shares of the preferred stock of the hotel company to be paid for in monthly installments. The first installment was paid July 10, 1926, and the final installment was paid March 30, 1927. The certificates for the stock purchased by appellant were issued to him by the hotel company under date of March 23, 1927, but were not delivered to him until May 24, 1927.

The second cause of action alleged in the complaint of appellant, the assigned claim of Rogers, is upon his purchase of ten shares of stock of the hotel company in May, 1926, and paid therefor $500 in cash, and the balance in monthly installments of $50 per month; the first installment being paid May 15, 1926, and the last installment on February 15, 1927. This certificate was issued to Mrs. Rogers under date of March 23, 1927, but for some reason was not delivered until May 24, 1927.

The record shows that respondent constructed the Georgia Hotel, in Vancouver, B. C., through a Canadian subsidiary company, the Dredging Contractors, Limited, owned by it, and undoubtedly had an interest in the stock of the hotel company so that it was considered that the sale of the hotel company's stock through respondent, to its employees, would be of benefit to all parties concerned. The hotel company manifestly ratified the offer, issued its stock accordingly, and respondent probably could have been compelled to perform.

This action was not commenced until March 20, 1933. The trial court entered judgment in favor of appellant on his first cause of action, but denied recovery on the second cause of action, consisting of the Rogers assigned claim for $1,000.

The trial court concluded that the statute of limitations began to run from the date of the last payment on each subscription instead of the date of the contract. Judgment was entered accordingly, from which both parties have appealed from the adverse judgment against each of them.

For brevity, we shall mention defendant as respondent only.

The trial court found that both appellant and Rogers found it necessary to sell the stock subscribed for by them and notified respondent of their election so to do, which respondent refused to perform. These findings are not disputed by either party.

The only thing in dispute as to appellant is in making conclusion of law No. 2 and denying appellant judgment on his second cause of action.

The matter contested by respondent on its cross-appeal is in making conclusion of law No. 1 and granting to appellant judgment on his first cause of action.

Appellant urges us to consider as controlling the following dates: April 21, 1926, respondent's offer to sell; February 15, 1927, last installment paid by Rogers; March 23, 1927, stock certificates actually issued to Rogers by Georgia Hotel Company, Limited; May 24, 1927, stock certificates mailed to Rogers; January 23, 1933, Rogers demanded that respondent repurchase, which demand was refused; March 20, 1933, suit was started to compel performance.

On its cross-appeal respondent contends that the statute of limitation began to run on both causes of action as soon as the contracts of purchase of stock were signed. In the case of Rogers the contract was signed and delivered Before July 19, 1926; in the case of appellant, on his own purchase, on July 10, 1926.

Appellant emphatically insists that respondent did not agree to refund all payments made on account of the purchase upon demand, but agreed to buy the stock back upon demand. It is then asserted that respondent's obligation to repurchase could not have been enforced by an employee who had not completed his purchase and obtained possession of the stock. It is argued from that premise that Rogers, to enforce the obligation of respondent to repurchase, would first be obliged to acquire the stock and then make proper demand and tender. To that effect is cited Olsen v. Northern Steamship Co., 70 Wash. 493, 127 P. 112, 113; Handley Investment Co. v. Trenholme, 91 Wash. 146, 157 P. 472; and several outside cases.

The Olsen Case, supra, was upon an entirely different sort of contract. The contract sued upon there was a verbal contract between Olsen and the Steamship Company whereby the Steamship Company sold and delivered to Olsen shares of stock of a certain amount and further agreed that if Olsen should be discharged as master of its steamer by the Steamship Company it would, within six months after the date of the discharge at Olsen's option, take redelivery of the shares purchased by him and repay him the par value thereof. Olsen entered the employ of the Steamship Company and was discharged on Febrary 24, 1910. On August 24, 1910, Olsen mailed the representative of the Steamship Company a letter demanding that it take the company's stock off his hands according to the agreement. The...