Hightower v. Ansley

• Decision Date: 27 July 1906
• Citation: Hightower v. Ansley, 126 Ga. 8, 54 S.E. 939 (Ga. 1906)
• Parties: HIGHTOWER v. ANSLEY.
• Court: Georgia Supreme Court

54 S.E. 939

126 Ga. 8

HIGHTOWER v. ANSLEY.

Supreme Court of Georgia

July 27, 1906

Syllabus by the Court.

A contract for the sale of stock in an incorporated company, at the price of $50 or more, is within Civ. Code 1895, § 2693 par. 7, which requires contracts for the sale of goods wares, and merchandise, to the amount of $50 or more, to be in writing.

If the holder of the stock agrees to sell the same at a stipulated price, on condition that the purchaser shall give up a lucrative position, and enter into the service of the corporation at a fixed salary, and the latter complies with this condition, the contract will be taken out of the statute of frauds by such performance on his part.

Evidence tending to show a subsequent recognition of the contract by the holder of the stock, including a written calculation made by him as to the amount due by the purchaser under a contract of like effect made with another stockholder, is admissible to show upon what terms the parties understood the stock was to be sold.

Proof of the consideration moving to the holder of the stock which induced him to agree to sell it at the stipulated price is admissible, though the evidence on this point should properly be so restricted as to eliminate all unnecessary details.

On the trial of a suit for damages because of an alleged breach of the contract, the plaintiff insisting and the defendant denying that demand has been made for a delivery of the stock, it is error to admit in evidence a letter written by the plaintiff to the defendant which does not establish the alleged demand, but simply discloses a self-serving declaration on the part of the plaintiff that such demand had previously been made and the defendant had refused to comply therewith.

Where the court, in charging the jury as to the respective contentions of the parties, not only failed to correctly present those of the losing party, but practically instructed the jury that he admitted the contention of the opposite party concerning one of the vital issues in the case, a new trial is demanded.

Error from Superior Court, Thomas County; R. G. Mitchell, Judge.

Action by F. J. Ansley against J. W. Hightower. Judgment for plaintiff. Defendant brings error. Reversed.

J. H Merrill, Foudren Mitchell, and W. E. & W. A. Harris, for plaintiff in error.

Shipp & Kline and S. A. Roddenberry, for defendant in error.

EVANS J.

This was an action to recover damages for the refusal of the defendant to deliver the stock of an incorporated company in accordance with the contract of purchase. The case was before this court on demurrer (120 Ga. 719, 48 S.E. 197), where a summary of the allegations of the petition will appear. The defendant in his plea denied the execution of the contract alleged and affirmatively pleaded that even if the contract was made as alleged, the same was not in writing nor had there been part performance thereof. A verdict was rendered for the plaintiff, and a motion for a new trial was made which being overruled, the points therein made are now under review.

1. In determining the respective rights of the parties, it becomes necessary first to decide whether a contract for the sale of shares in an incorporated company subsequently to be issued, or an option for the purchase of shares in an incorporated company, is within the provisions of Civ. Code 1895, § 2693, par. 7. That section requires that a contract for the sale of goods, wares, and merchandise, in existence or not in esse, to the amount of $50 or more, except the buyer shall accept part of the goods sold and actually receive the same, or give something in earnest to bind the bargain, or in part payment, shall be in writing in order to be valid. The early English decisions were conflicting as to whether a sale of stock in an incorporated company was within the statute of frauds, and the rule was not definitely settled in that jurisdiction until about the year 1839, when the rule was adopted that stock in a corporation was neither goods, wares, nor merchandise, as those terms are used in the statute of frauds. Since that time, corporate stock has been held by the English courts to be not within the statute. Cook on Stock and Stockholders, § 339. In the United States it has been very generally held that corporate stock is a species of intangible personal property and is within the statute. 20 Cyc. 244; 3 Clark & Mar. Priv. Corp. § 610. The first expression of this court as to the comprehensiveness of the terms "goods, wares, and merchandise," is found in the case of Walker v. Supple, 54 Ga. 178. In that case it was held that a contract to purchase an account for $50 or more is within the reason and spirit of the statute of frauds, and must be in writing. An account is but a chose in action, a form of intangible property, and if the reason and spirit of our statute should be construed to include accounts, as goods or merchandise, a fortiori corporate stock, which by statute is the subject-matter of levy and sale, should likewise be included within the statute. The case of Walker v. Supple was decided in 1875, and the construction put upon the statute was acquiesced in for more than 20 years. Its principle seems to have been disregarded in the later case of Rogers v. Burr, 105 Ga. 432, 31 S.E. 438, 70 Am.St.Rep. 50, decided by five justices, and it is noteworthy of remark that the previous case was not referred to by the learned judge in his opinion in the later case. In the case in 105 Ga. 31 S.E. , it was held that a contract to purchase shares of the capital stock of a manufacturing company was not within the statute of frauds, because the subject of the purchase was neither goods, wares, nor merchandise, as contemplated by the statute. The principles decided in these two cases are directly in conflict, and the cases cannot be harmonized. According to our well-settled rule, the binding force of the older case must control. Besides, it is more in accord with the spirit of the law that personal property, which is capable of assignment or transfer, should not be distinguished from goods, wares, and merchandise, as taken in their literal sense. If the terms "goods, wares, and merchandise," are given their most limited significance, it would exclude, without reason, from the operation of the statute a large class of personal property.

2. The plaintiff contends that although the original contract was not in writing, the defendant subsequently in a letter admitted its existence. The material part of this letter which was written by the defendant to the plaintiff on September 10, 1901, is as follows: "Some time in May last, or a few days after you left our service, I had a short talk with Mr. Heath about the stock we agreed to sell you when we entered this enterprise here. I told Mr. Heath to say to you that if you wanted that stock, you could have it at the original cost. This was in accordance and in compliance with our agreement to let you have it. Mr. Heath told me yesterday that he had not mentioned this to you, and I write this letter to tell you that if you desire it you can have ten thousand of the stock on the ground-floor basis; you know what that is." This letter does not specify the shares of stock of any particular corporation, or the original cost, or when payment was to be made. These vital particulars of the contract asserted by the plaintiff would have to be supplied by parol. Whenever the writing of itself does not contain a complete contract, and it is necessary to supply omissions by parol, it is insufficient to take the case without the statute. North v. Mendel, 73 Ga. 400, 54 Am.Rep. 879. The plaintiff further contends...