Pratt v. Prouty

• Decision Date: 22 January 1898
• Citation: 104 Iowa 419,73 N.W. 1035
• Parties: PRATT v. PROUTY.
• Court: Iowa Supreme Court

104 Iowa 419

73 N.W. 1035

PRATT

v.PROUTY.

Supreme Court of Iowa.

Jan. 22, 1898.

Appeal from district court, Polk county; C. P. Holmes, Judge.

Action for damages for failure to sell and deliver certain shares of stock. Trial to jury. Verdict and judgment for defendant. Plaintiff appeals. Affirmed.Earle & Prouty, for appellant.

Cummins, Hewitt & Wright, for appellee.

WATERMAN, J.

As to many of the facts presented by appellant, there is no dispute. We may state the case in this way: In November, 1888, plaintiff and defendant, together with Isaac W. Aikin and P. H. Skinner,incorporated as the Prouty & Pratt Company, for the purpose of carrying on a wholesale grocery business in Des Moines, Iowa. The capital stock of the corporation was $162,000, divided into 324 shares, of $500 each, which were held by the different parties in the following amounts: Defendant, 164 shares; plaintiff, 108 shares; Isaac W. Aikin, 50 shares; P. H. Skinner, 2 shares. At or about the time of the incorporation of said company, an agreement was entered into by defendant, a copy of which is as follows: “Des Moines, Iowa, Nov. 24, 1888. In consideration of one dollar in hand paid, I hereby agree to sell to W. J. Pratt, Isaac W. Aikin, and P. H. Skinner, my associate partners in the Prouty & Pratt Co., enough of the capital stock that I may hold in said Co. to reduce my capital stock to one-third of the whole capital stock in said Co.: provided, said stock is to be purchased by said W. J. Pratt, Isaac W. Aikin, and P. H. Skinner at par, in amounts of ten thousand dollars, at the end of each business year of said Co., after a dividend has been declared and paid on said stock; and I further agree to sell and deliver to the above parties the ten thousand dollars stock in the number of shares to each that they may agree upon. C. C. Prouty.”

It is claimed by appellant that the trial court erroneously construed this contract as providing that plaintiff and his associates Aikin and Skinner could call each year for exactly the amount of $10,000 of said stock,--no more and no less. We are by no means sure that the record shows the lower court to have so construed the contract. We are called upon, however, to give our interpretation of it. It must be admitted that the $10,000 mentioned in the contract was a limitation of some kind. Was it meant to limit the purchaser's rights to exactly $10,000 worth of said stock, or did it mean that no less, or that no more, than $10,000 in amount was to be taken in any one year? Appellant says that it could not have been a restriction to the exact amount stated, because defendant held $28,000 more than one-third of the stock, and to say that the purchaser could demand only the particular sum of $10,000 would be to deprive them of the ability to get the whole of the surplus offered them in this agreement; for, after two calls, there would remain a sum of $8,000 in defendant's hands. He insists that the agreement meant that no less than $10,000 should be demanded at any one time. But we think that this leaves him in the same dilemma he has stated as arising from the construction which he says was given by the lower court. Plaintiff claims to have demanded $10,000 the first year, and a like sum the second year. This would leave, under his construction, a remainder of $8,000, which could never be obtained. We suggest that the $10,000 mentioned was an amount that could not be exceeded; that it was fixed as the largest sum that could...