Loxley v. Studebacker

• Decision Date: 27 November 1907
• Citation: 68 A. 98,75 N.J.L. 599
• Parties: LOXLEY v. STUDEBACKER et al.
• Court: New Jersey Supreme Court

68 A. 98

75 N.J.L. 599

LOXLEY

v. STUDEBACKER et al.

Court of Errors and Appeals of New Jersey.

Nov. 27, 1907.

(Syllabus by the Court.)

Error to Supreme Court.

Action by Morris J. Loxley against Clement Studebacker and others. Judgment for defendants, and plaintiff brings error. Affirmed.

Robert H. McCarter, Atty. Gen., for plaintiff in error. Pitney, Harden & Skinner, for defendants in error.

REED, J. This writ of error brings up a Judgment of nonsuit. The action was brought to recover commissions for the sale of a gas plant situated at South Bend, Ind. The gas plant was the property of the South Bend Fuel & Gas Company. The defendants controlled, and with their family connections owned, the stock of the company. The plaintiff is a broker having an office in Philadelphia.

On April 15, 1903, Mr. Loxley, the plaintiff, wrote to Mr. George M. Studebacker, one of the defendants, asking him if he would consider a sale of the gas plant, and stating that the parties that he (Mr. Loxley) represented were amply able to purchase, if the price and terms were satisfactory to them. He also suggested that he should visit South Bend. Mr. Studebacker by telegram advised him not to come. On October 31, 1903, Loxley wrote again to Mr. Studebacker, asking him if he would sell, and telling him that the gentlemen who would consider the purchase were Bertrom & Storrs, 40 Wall street, New York. He also said he would be glad to go to South Bend, and would like to have some figures as to the gross and net income and operating expenses of the plant. The answer to this letter was not produced, but on November 12th Loxley wrote saying he would visit South Bend and get the data and talk over matters. On November 17th he was told to come. On November 17th Bertrom & Storrs wrote to Loxley, inclosing a paper containing questions respecting the gas property which they wished the owners to answer. On December 1st Loxley write to Clement Studebacker stating that he had had a conference with Bertrom & Storrs, and that they were awaiting information. On December 5th Clement Studebacker wrote that they would be able to send the information on the first of the week, and stating that they would not be willing to consider anything but a cash offer at the figures named.

In the meantime, Loxley had visited South Bend and had had an interview with C. Studebacker and made some memoranda and got a statement that the company would accept $400,000 for the stock of the company. Nothing was said about commissions. This information was communicated to Bertrom & Storrs. On December 12th Loxley wrote the gas company, saying that, pending the arrival of detailed information, Bertrom & Storrs were arranging to send their confidential engineer to examine the physical condition of the gas plant. On March 2, 1904, Bertrom, Storrs & Griscom (the latter being a lately admitted member of the firm) wrote to Clement Studebacker, Jr., conveying an offer to purchase. The terms offered were $750,000; the present bonds to remain outstanding and to be deducted at their par value from this purchase price. On April 9th Mr. Studebacker replied that they would not consider anything but a cash offer. Other unimportant letters were interchanged under dates of June 3d, 11th, and 17th. On June 16th C. Studebacker inclosed a statement of their gross and net income, operating expenses, and expenses for improvements and for a new site. He also called attention to the fact that they had bonds to the amount of $450,000 outstanding, instead of $500,000, and conveys other now unimportant information. On June 20th C. Studebacker, Jr., sent Loxley by his request a report by Haskin & Sells on the affairs of the company for 1902 and 1903, the acceptance of which report is acknowledged June 23d. On June 28th Loxley inclosed a letter from one Frank Tilford making a cash offer for the bonds of the company. This offer was withdrawn by letter July 13th. In this letter Loxley states that he believes he could sell the plant if they would take $375,000 for the stock, less his commission of 3 per cent. On July 19th the gas company made a proposition to sell for $400,000 net to them. On July 21st Loxley wrote to Bertrom, Storrs & Griscom thus: "After a great deal of hard work, I have gotten those South Bend people to quote me a price for $400,000 for the stock of the plant, subject to the bond issue for $450,000 and not $500,00, as quoted you by them." On July 22d Bertrom, Storrs & Griscom wrote to Loxley declining the offer, which letter Loxley forwarded to the gas company in a letter of his under date of July 23d. In the last letter Loxley asserted his ability to sell the gas company stock for $305,000, subject to the bond issue of $450,000 upon the verification of the figures furnished by Loxley obtained from the gas company.

So far, it is perceived that Loxley was acting for some proposed purchaser, and not acting as a broker for the gas company. In answer to his suggestion contained in the letter of July 13th that he could sell the plant for $375,000 less his 3 per cent. commission, he was plainly told that the company's terms were $400,000 net. On July 28, 1904, the gas company wrote a letter which conferred upon Loxley the exclusive right to sell the stock, treasury bonds, and real estate of the gas plant; that exclusive right to terminate on December 1, 1904. By a confirmatory letter of the same date, the lowest price at which the sale could be made was fixed at $365,000 cash; the company agreeing to pay 3 per cent. commission on the price, as well as on the amount of stock which the gas company should receive at the value that it received it. A right was granted Loxley to receive commission from the purchaser. By letter of August 17, 1904, the terms contained in the letter of July 17th were confirmed, and the gas company agreed that commissions should be paid upon the aggregate amount of bonds outstanding, plus the price received for the stock.

After November 15th the correspondence displays a variety of offers for options to purchase given to different parties, none of which were accepted by any one of them. On November 15, 1904, Loxley wrote to C. Studebacker, and after speaking of these fruitless negotiations, said: "I have advised you of an offer of $300,000 cash for all the stock, subject to the usual examination of statements and figures. I believe it is the best price that will be offered." C. Studebacker, Jr., replied that, if the amount of cash was raised to $325,000 after commissions were paid, he might induce the company to accept it, but it was doubtful. He also reminds Loxley that his time for making a sale would expire on December 1st. On November 22d Loxley requested the gas company to renew his exclusive right to sell for three months longer, namely, until March 1, 1905. On November 25th the company wrote that it would not accede to this request, but would extend the time to January 1, 1905, which proposition was accepted by Loxley. On December 1, 1904, the company, on the strength of a letter from Loxley, reduced its cash price from $325,000 to $315,000. On December 14th Loxley calls attention to the last offer from Bertrom, Storrs & Griscom of $100,000 in cash, $100,000 preferred stock, and $100,000 common stock, but says that he does not know that this price can now be obtained from them. The gas company refused to consider this offer by letter of December 24th, reminding Loxley that his option expired January 1st, and that, if he was not able to do business with Kleybolte & Co. (a firm mentioned in a preceding letter from Loxley), the company would prefer that he (Loxley) would stop any further negotiations. The company also requested him to return the statement and other data which they had sent him. On December 29, 1904, Loxley wrote that he would keep the papers until he had concluded the negotiations with Kleybolte & Co., for whom one Bylles seems to have been making an examination of the gas plant. On January 7, 1905, C. Studebacker wrote Loxley that he could wait but a few days longer to know the intentions of Kleybolte & Co., and asked Loxley to return all papers not later than the last of the week. On January 13th Loxley wrote that as soon as Kleybolte & Co. returned to him the papers he would forward to the gas company. On January 14th, C. Studebacker, Jr., wrote that if they did not hear from Loxley concerning the Kleybolte & Co. negotiations some time during the next week the matter would be closed, and that they did not wish Loxley to negotiate with any one whatsoever for the sale of the plant. He added: "As you know your option expired on the 1st of January, and you have no authority from us to further negotiate for the sale of the plant." On January 21st, C. Studebacker, Jr., wrote Loxley acknowledging the receipt of some documents, and asked the return of a map. On January 30th, Loxley advised C. Studebacker, Jr., that Kleybolte & Co. refused to purchase. He further wrote: "If after further consideration of this business you care to have me approach Bertrom, Storrs & Griscom again, advise me and I will do so." On February 1st C. Studebacker, Jr., wrote Loxley: "I do not care to have you take this up with Bertrom, Storrs & Griscom as you say they would not make any better proposition, and we are not willing to accept the proposition which they made to us." On February 6th Loxley sent another proposition from Bertrom, Storrs & Griscom. On February 8th the company wired Loxley they could not consider the proposition, and that they did not wish him to offer the property further. On February 8th Loxley wrote to Bertrom, Storrs & Griscom: "I have just received information to the effect that in about two weeks I can offer you the stock of the South...