Merchants-Citizens' Nat. Bank & Trust Co. of Allentown v. Mauser
| Decision Date | 01 July 1929 |
| Docket Number | 9 |
| Citation | 297 Pa. 399,147 A. 90 |
| Parties | Merchants-Citizens National Bank, Executor, Appellant, v. Mauser et al |
| Court | Pennsylvania Supreme Court |
Argued May 14, 1929
Appeal, No. 9, Jan. T., 1930, by plaintiff, from judgment of C.P. Lehigh Co., Jan. T., 1927, No. 143, on verdict for defendants, in case of Merchants-Citizens National Bank & Trust Co. of Allentown, Pa., acting executor of will of J Mark Mauser, deceased, v. George B. Mauser and Harry J. Lerch. Affirmed.
Assumpsit on contract. Before RENO, P.J.
The opinion of the Supreme Court states the facts.
Verdict and judgment for defendants.
Plaintiff appealed. Anna S. Mauser, widow, intervened as appellant.
Errors assigned were various rulings and instructions, quoting record seriatim.
The judgment is affirmed.
Fred B. Gernerd, for appellant. -- The successive increases of the capital stock, did not produce such a physical change in the structure of the corporation as to cause in and by itself the cancellation of the agreement of January 2, 1917.
The admissibility of the statement embodying their answer for refusal which was handed to the executors at the time tender of the stock was made, and demand made of defendants for the payment of $242,000, was a serious error: Bassler v. Niesly, 2 S. & R. 352; Galbraith v. Green, 13 S. & R. 85; Parry v. Parry, 130 Pa. 94; King v. King, 281 Pa. 511; Africa v. Trexler, 232 Pa. 493; Grove's Est., 38 Pa.Super. 424.
It was error to admit the will of the late J. Mark Mauser in evidence to show that he no longer regarded the agreement of January 2, 1917, in force, when his widow had elected to take against the will: Cunningham's Est., 137 Pa. 621; Powell's Est., 225 Pa. 518.
Thomas F. Gain, with him Dallas Dillinger, Jr., Morton Z. Paul and Francis Shunk Brown, for Anna M. Mauser, widow, intervening appellant. -- The agreement of 1917 was binding on the survivors to that contract, and the heirs and assigns of the deceased party thereto: Gross v. Machine Works, 277 Pa. 363; Com. v. Neff, 271 Pa. 312; Swarthmore v. Transit Co., 280 Pa. 79; Corona C. & C. Co. v. Dickinson, 261 Pa. 589; Collingdale Boro. v. Transit Co., 274 Pa. 124; Nether Providence Twp. v. Transit Co., 280 Pa. 74; Com. v. Bader, 271 Pa. 308.
Declarations which are favorable to the interests of the person making them, made in the absence of the other party to the transaction and not coming within some recognized exception to the hearsay rule nor offered to rebut evidence of want of credibility, are not admissible on behalf of the person making them: King v. King, 281 Pa. 511; Dempsey v. Dobson, 174 Pa. 122; Murdock v. Biery, 269 Pa. 577; Stybr v. Walter, 272 Pa. 202.
The admission of the will of J. Mark Mauser as evidence of the rescission of the contract of 1917, was improper: Cunningham's Est., 137 Pa. 621; Weichelberger's Est., 135 Pa. 160, 169; Zimmerman v. Zimmerman, 47 Pa. 378, 379, 381; Boyer v. Smith, 3 Watts 449-450.
Owen J. Roberts, with him Reuben J. Butz, for appellees. -- The cancellation or rescission of a written contract may be oral or by implied agreement, which may be shown by the acts of the parties and the attending circumstances: Anstead v. Cook, 291 Pa. 335; Noon v. Rodstein, 89 Pa.Super. 153; Hudson v. Hyman, 85 Pa.Super. 245; Holloway v. Frick, 149 Pa. 178; Brady v. Colhoun, 1 P. & W. 140; Brentwood Realty Co. v. Moses, 73 Pa.Super. 307; Producers Coke Co. v. Hoover, 268 Pa. 104; Achenbach v. Stoddard, 253 Pa. 338; Germantown Dairy Co. v. McCallum, 223 Pa. 554; Reber v. Brownback, 27 Pa.Super. 471; Trumbower v. Woodley, 26 Pa.Super. 249; Colt v. Selden, 5 Watts 525; Hyde v. Kiehl, 183 Pa. 414; Flegal v. Hoover, 156 Pa. 276.
The corporate proceedings and records to show change of capital stock structure, were admissible.
Knowledge of effect on stock by change in capital stock structure is a circumstance to be considered in determining whether the contract was abandoned or rescinded.
The will was proper as evidence.
Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.
The Mauser Mill Company, engaged in the grain milling business in Lehigh and Northampton Counties, was duly chartered as a corporation in 1902, with a capital stock of $200,000, divided into 4,000 shares of the par value of $50 each. It prospered and in 1917, J. Mark Mauser, George B. Mauser and Harry J. Lerch, the principal and controlling stockholders, the former being brothers and Lerch their brother-in-law, entered into a written agreement that, ". . . upon the death of either the survivors shall and will within fifteen days thereafter purchase the shares of stock of the Mauser Mill Company owned by the other at the time of his decease, for the twofold purpose, among others, of converting said stock into cash for the benefit of the deceased and in order that the survivors may acquire said shares of stock, at the price of one hundred dollars per share and the same shall and will be assigned and delivered at said price to such survivors." The contract also provides that the stock shall be paid for in ten equal annual installments and is expressly made binding on the legal representatives, etc., of the parties.
When this agreement was made, the capital stock was $200,000, but in 1920, $100,000 of preferred stock was duly issued and given preference over the common stock. The proceeds of the preferred stock increased the corporate assets. In 1922, a stock dividend of $200,000 was duly declared, which doubled the amount of common stock, but added nothing to the assets. The three parties to the agreement of 1917 joined in the issues of stock to which we have just referred. J. Mark Mauser died on August 3, 1924, having in the preceding June made his last will, item 5 of which reads:
"I give, devise and bequeath all of my shares of common stock that I now own in the Mauser Milling Company, and all monies that shall come into the hands of my executors after my personal obligations and the administration expenses of my estate have been paid, to Harry J. Lerch and the Citizens Trust Company of Allentown, Lehigh County, Pennsylvania, in trust, they to invest all monies coming into their possession, other than that received as dividends and interest, in first mortgage securities upon real estate, and to pay the net annual income thereof unto my dear wife, Anna R. Mauser, during the term of her natural life." Item 7 is: "I hereby empower my executors or trustees, should they deem it for the best interest of my estate, and decide to sell my shares of common stock or any portion thereof, then I direct that my associates in the Mauser Milling Company, shall be given the first opportunity to buy the same, at and for the price of fifty-five ($55.00) dollars per share, and the monies so realized from the sale of said shares of stock is to be held in trust for the same purposes and upon the same conditions as set forth in paragraph five." In item six he also fixes the value of his common stock at $55 a share, which was approximately its selling price in 1924, whereas the selling price in 1917, when but $200,000 of stock was outstanding, was above $100 a share.
The widow of J. Mark Mauser declined to take under the will and at her instance the acting executor brought this suit to recover from the surviving members of the contract of 1917 the $100 a share for the 2,420 shares of common stock owned by J. Mark Mauser at the time of his death. This included his original holding and the stock dividend. The defendants averred that subsequent to the issue of the latter the contract of 1917 had been expressly cancelled by the parties and their copies thereof marked cancelled or destroyed. There was the evidence of three witnesses to the effect that J. Mark Mauser had joined in such express cancellation and attempted to find his copy of the contract...
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