McLean v. Archer

• Court: Washington Supreme Court
• Writing for the Court: SIMPSON, Justice.
• Citation: McLean v. Archer, 201 P.2d 184, 32 Wn.2d 234 (Wash. 1948)
• Decision Date: 30 December 1948
• Docket Number: 30654.
• Parties: McLEAN et al. v. ARCHER.

201 P.2d 184

32 Wn.2d 234

McLEAN et al. v. ARCHER.

No. 30654.

Supreme Court of Washington

December 30, 1948

Department 2

Action by Charles R. McLean and Archer Blower & Pipe Company, a corporation, against Lena Dalpe Archer, individually and as the executrix of the last will and testament of Alfred Charles Archer, deceased, for specific performance of an oral contract to convey realty. From an adverse judgment, the plaintiffs appeal.

Judgment affirmed.

See also 201 P.2d 191.

Appeal from Superior Court, King County; Robert M. Jones, judge.

Bell McNeil & Bowles and George W. Martin, all of Seattle, for appellants.

John J Kennett and James D. McCutcheon, Jr., both of Seattle, for respondent.

SIMPSON Justice.

This appeal involves an action for specific performance of an oral contract to convey real estate. The party plaintiff to the original complaint, filed June 24, 1947, and first amended complaint was Charles R. McLean. Demurrer to the original complaint was sustained upon the grounds that, (a) the complaint did not state facts sufficient to constitute a cause of action; (b) the plaintiff did not have legal capacity to sue; (c) there was a defect of parties plaintiff. The record does not disclose the reason for sustaining the demurrer to the first amended complaint. Parties plaintiff to the second amended complaint, upon which the trial was had were Charles R. McLean, and Archer Blower & Pipe Co.

The last complaint filed alleges that: A. C. Archer had been for many years a majority stockholder, president, and manager of the Archer Blower & Pipe Co., a Washington manufacturing corporation, whose plant was located upon property belonging to Archer. Charles R. McLean had worked for the corporation for a period of eight years prior to September 13, 1945. On or about the day just mentioned, Archer represented to plaintiff McLean that he, Archer, intended to retire as the actual manager of the corporation; that the business had always been a successful venture, and that its good will was of very great value. Archer further represented to McLean that he intended to leave the business to his son, August C. Archer, who was interested in the company and an officer thereof at the time of the conversation, and that he and his son desired McLean to remain with the corporation and purchase a substantial interest in it. Archer conveyed the further information to McLean that he would deed the real property in controversy to the corporation so that it would be secure in its location and not have to pay rent. He also agreed that if McLean would purchase eighty shares of stock in the corporation he would give him five shares, and would convey title to the real property upon which the company's building was located, to the corporation. McLean accepted the proposition made by Archer, and performed his agreement fully and completely by remaining with the corporation and paying to Archer the sum of $12,000 for the eighty shares of stock. Archer, however, failed to convey the real property to the corporation.

In her answer, defendant denied the allegations relative to the contract and the failure of Archer to comply with it. She also set up four affirmative defenses. The first defense was the statute of frauds relating to conveying of realty. The second defense set up the fact that the landlord-tenant relationship existed between the plaintiffs and Mr. Archer, and that the plaintiff could not deny title to the property in the defendant. The third defense alleges conduct on the part of plaintiffs which she claimed estopped them from denying the ownership of the land in the defendant. And the fourth defense alleged a lack of legal capacity in either McLean or the corporation to maintain the action.

The trial of the case resulted in the granting of a motion made by defendant which challenged the sufficiency of plaintiff's evidence.

The assignments of error, eight in number, challenge all of the orders made by the trial court, including the judgment of dismissal.

The facts produced at the trial may be summarized as follows:

The Archer Blower & Pipe Company was organized in 1905 by Alfred C. Archer and two of his brothers. This business has occupied the building and land in question since 1908. In its progress, Alfred C. Archer bought the interests of his brothers, and from that time the stock has been held in a close family circle. Just prior to the alleged contract, Alfred C. Archer owned 250 shares, August C. Archer owned 149 shares, and one share was held by August Archer's wife, Julece, Alfred C. Archer died March 8, 1947. His will was admitted to probate and the respondent in this case was named as executrix thereof.

August C. Archer, a son of decedent and stepson of respondent, testified for the plaintiffs. He stated that the business had been in its present location since 1905, and that it served sawmills, planing mills, and other varied industries with airconditioning systems. He testified that the buildings were built to house the present plant; that some of the equipment was old, and unusuable if moved to any other place becuase it was accommodated with two-phase wiring and the electric companies would not service such motors at any other place. He said that many years ago the real property was in the name of his father, and subsequently transferred to the name of Emma Archer, a previous wife of decedent, and upon her death was again placed in the name of his father. He stated that he had on many occasions talked with his father concerning the rental of the land occupied by the corporation, and in the summer of 1945 his father appointed him to go ahead and make a deal 'with the boys.' This was in the early part of the year. His father said it did not make any difference to him whether he received the money as rent or as salary. The witness identified plaintiffs' exhibit No. 1 as the corporation minute book. He stated that he had kept the minutes for the last several years; that there was an election of officers subsequent to December 24, 1941; that the last prior election was February 5, 1938. The minutes showed that there was a meeting on September 13, 1945; that the trustees waived notice. Alfred C. Archer, August Archer and Charles McLean were present at that meeting. He further testified that the minutes were prepared in the book in late 1947 after his father's death, but that he had prepared a rough draft prior to the death of his father and these minutes were absolutely correct as taken from them. The witness admitted that the minutes of the meeting were typed in an attorney's office in Portland, Oregon. The witness and his attorney conferred over the minutes, and with Mr. Archer's notes and suggestions and suggestions from the attorney, they were written.

The evidence of Frank W. Hall, given by way of deposition, showed that prior to September 13, 1945, he was approached by A. C. Archer, relative to acquiring an interest in the Archer Blower & Pipe Company by buying some stock therein and entering the employ of the company in a supervisory capacity. Thereafter, Mr. Hall, who was a former employee of the corporation, came back to the company and worked for it about a month prior to September 13, 1945. The pertinent portions of his testimony are as follows:

'Mr. Archer came to me and wanted me to buy an interest in the company, and after several discussions I decided to spend a month on a trial basis getting the feel of the thing, so I left my employment with Albers and went over there with Archer, and the agreement was that we were going to each buy twenty per cent of the stock of the company. I think $12000.00 was what we were going to pay, each.'

'We were to operate the business, with other stockholders, of course. McLean and I were each going to have twenty per cent of the stock, that is * * * [Interpolation] fourth per cent, and he was--as I recall, another one thing that he was going to do on that is that the property itself was separate from the corporation and he was going to deed the property to the corporation when we drew up our contract. * * * I think that we had three meetings with Mr. Archer, McLean and I, and it was during the months of July and August; I cannot fix the date, but during those two months. And one more meeting that August Archer was present. * * * Yes, there was a final meeting. The final meeting I had with Mr. Archer was when I decided not to invest in the company, but to leave, and that was the final meeting I had, when I told him that I was not going to buy into the company and return to my old job, or to a new one that was offered me. * * * After I told him I was not going to buy into the company he was provoked about it and he turned to McLean and he said, 'Well, how about you?' And McLean answered that he was going to carry on the business arrangements.'

Rosetta Gifford, an employee of appellant corporation as a bookkeeper and secretary, testified for appellants. She stated that Mr. Archer came to her desk frequently and talked to her about different matters concerning the company and its business, and that she had talked with him concerning the company prior to September 13, 1945. In answer to a question relating to conversations, she stated:

'He came to me and told me that a former employee, Frank Hall, was going to come back to work for him and he would buy stock in the property with Charlie McLean, and he would be able to step out. And he said, 'I'll turn the property over to them and to August and they will have a good business here.''

Later, in response to a question as to what the next conversation was, she said:

'I believe the next time was when he came to me and informed me that Frank Hall had--[Interpolation by counsel and court] This was in...