Pugh v. Gressett

• Decision Date: 13 October 1924
• Docket Number: 23833
• Citation: 101 So. 691,136 Miss. 661
• Court: Mississippi Supreme Court
• Parties: PUGH et al. v. GRESSETT. [*]

101 So. 691

136 Miss. 661

PUGH et al. v. GRESSETT. ^[*]

No. 23833

Supreme Court of Mississippi

October 13, 1924

Suggestion of Error Overruled Nov. 24, 1924.

(En Banc.) Suggestion of Error Overruled Nov. 24, 1924.

1. FRAUDS, STATUTE OF. Contract for purchase and sale of corporate stock held taken out of statute by part performance.

When corporate stock is bought and sold with a position and salary as manager as a part of the consideration, the giving up of the position by one party and the assuming management and control of the business by the other under the agreement is part performance, which takes the case out of the statute of frauds.

2 CORPORATIONS. Agreement for sale held sufficiently certain though specific terms of notes to be given in payment not set out.

Where corporate stock is sold for a fixed price, and a part is to be paid in cash, and part to be carried in negotiable notes by the seller, to be closed by a named date, there is a contract, even though the maturities and specific terms of notes are not set out. In such case the customary dealings may be looked to, and in such case the seller agrees to take negotiable notes, and the buyer agrees to make and deliver them to the seller in such form and terms as will make them negotiable. The buyer cannot take possession of the business which he gets charge of by the agreement and refuse to carry out his part of the contract.

SYKES J., SMITH, C. J., and COOK J., dissenting.

HON. G C. TANN, Chancellor.

APPEAL from chancery court of Lauderdale county, HON. G. C. TANN, Chancellor.

Action by J. B. Gressett, Jr., against T. N. Pugh and others. From a judgment for plaintiff, defendants appeal. Affirmed.

Judgment affirmed.

Wells, Stevens & Jones, for appellant.

I. EQUITY WILL NOT ENTERTAIN A BILL FOR SPECIFIC PERFORMANCE OF THE SALE OF CHATTELS INCLUDING STOCK IN A PRIVATE BUSINESS CORPORATION OF THIS NATURE. Mr. Pomeroy says: "The doctrine is equally well settled that equity will not in general decree the specific performance of contracts concerning chattels because their money value recovered as damages will enable the party to purchase others in the market of like kind and quality." Aston v. Robinson, 49 Miss. 348; Daniel v. Frazer, 40 Miss. 507; Rimes v. Rimes, 152 Ga. 721, 111 S.E. 34, 22 A. L. R. 1030; Scottish Union & National Ins. Co. v. Warren-Gee Lumber Co., 104 Miss. 636, 61 So. 310. Our court in Aston v. Robinson, supra, said of the action for specific performance: "Ordinarily it will not be exerted in reference to agreements about chattels because the law esteems that ample compensation can be made in damages for a breach."

II. THERE WAS IN FACT NO AGREEMENT BY APPELLANT HOWARD TO PURCHASE THE STOCK. Yazoo & Miss. Valley R. R. Co. v. Jones, 114 Miss. 787; Pioneer Box Co. v. Price Veneer & Box Co., 132 Miss. 189, 96 So. 1003.

III. CONCEDING BUT ONLY FOR ARGUMENT THAT EQUITY WILL MAINTAIN IN ANY EVENT A BILL FOR SPECIFIC PERFORMANCE OF A CONTRACT FOR THE SALE OF CORPORATE STOCK, IT WILL NOT DO SO WHERE THERE IS EITHER FRAUD, MISREPRESENTATION, OR MUTUAL MISTAKE, OR WHERE THE CONTRACT, IF ENFORCED, WOULD BE INEQUITABLE. 4 Pomeroy, pars. 1404, 1405, footnotes on p. 3339; Daniel v. Frazer, 40 Miss. 507; Aston v. Robinson, 49 Miss. 348; Nalty v. Cohn, 117 Miss. 190; Cathcart et al. v. Robinson, 5 Peters, 8 L.Ed. 120.

IV. THE ALLEGED CONTRACT IS UNENFORCEABLE BECAUSE WITHIN THE STATUTE OF FRAUDS.

V. THE ALLEGED CONTRACT IS UNENFORCEABLE BECAUSE LACKING IN MUTUALITY. Pomeroy, par. 1405; Williston on Sales, par. 55, 103; Coldblast Transportation Co. v. Kansas City Bolt & Nut Co., 11 F. 77, 57 L. R. A. 696; Pantages v. Grauman, 112 C. C. A. 61, 19 F. 317; Ryan v. McLane, 91 Md. 175, 50 L. R. A. 514; Deitz v. Stephenson, 51 Ore. 596, 95 P. 803; Strasburg R. Co. v. Echpernacht, 21 Pa. 220, 60 Am. Dec. 49; Chilhowie Iron Co. v. Gardner, 79 Va. 305; Hissam v. Parrish, 41 Va. 686, 56 Am. St. Rep. 892, all of which involved a contract for the sale of corporate stock; Jutte & Co. v. Pfeil, 219 Pa. 520, 69 A. 59; Ryan case above, 50 L. R. A. 514, Am. St. Rep. 438; Thompson v. Harcourt (1722), 1 Bro. P. C. 193, 1 Eng. Reprint 508; Jones v. Newhall, 115 Mass. 244, 15 Am. Rep. 97; Hissam v. Parrish, 41 W.Va. 686, 56 Am. S. Rep. 892; Cowles v. Whitman (Conn.), 25 Am. Dec. 60.

VI. ADDITIONAL AUTHORITIES ON THE GENERAL PROPOSITION THAT APPEAR WAS NOT ENTITLED TO ANY RELIEF BECAUSE HE DID NOT COME INTO A COURT OF EQUITY WITH CLEAN HANDS, AND THE CONTRACT SOUGHT TO BE ENFORCED IS NOT ONLY VOID FOR INDEFINITENESS BUT IS UNCONSCIONABLE. Hafner v. Dobrinski, 54 L.Ed. 277; Pope Mfg. Co. v. Gormully, 144 U.S. 224, 236, 36 L.Ed. 414, 419, 12 S.Ct. 632; Cathcart v. Robinson, 5 Peters, 264, 276, 8 L.Ed. 120, 124; Mortlock v. Buller, 10 Ves. Jr. 292; Day v. Newman, 2 Cox Ch. Cas. 77; Hennessy v. Woolworth, 128 U.S. 438, 442, 32 L.Ed. 500, 501, 9 S.Ct. 109; Nickerson v. Nickerson, 127 U.S. 668, 32 L.Ed. 314, 8 S.Ct. 1355; Rudisill v. Whitener, 15 L. R. A. (N. S.) 81, 25 R. C. L. 44.

VII. APPELLEE WAS NOT ENTITLED TO THE RELIEF BECAUSE THE STOCK WAS SUBJECT TO AN INCUMBRANCE LARGELY IN EXCESS OF ITS TRUE VALUE. 25 R. C. L. 78; Summerlin v. Fronteriza Silver Mining & Mill Co., 41 F. 249; Fry on Specific Performance, 859; Watts v. Waddle, 31 U.S. 6 Peters, 391, 8 L.Ed. 438; Jeffries v. Jeffries, 117 Mass. 184; Bowen v. Vickers, 2 N.J.Eq. 520, 35 Am. Dec. 516; Hinckley v. Smith, 51 N.Y. 21; Walsh v. Barton, 24 Ohio St. 28; Mayer v. Adrain, 77 N.C. 8; Pomeroy, p. 3339; Watts v. Waddle, supra (8 L.Ed. 442).

VIII. EVEN THOUGH APPELLANT HOWARD IS MISTAKEN IN ALL OF HIS FUNDAMENTAL CONTENTIONS AND THE COURT SHOULD HOLD THAT THERE WAS A CONTRACT AND THAT APPELLEE IS ENTITLED TO RECOVER, EVEN THEN THE CASE SHOULD BE REVERSED IN ORDER THAT THE EQUITIES OF APPELLANT HOWARD AGAINST BOTH PUGH AND GRESSETT MAY BE DECLARED AND ENFORCED.

Jacobson & Brooks, for appellant.

I. THE DECREE RENDERED BY THE LEARNED COURT BELOW IS UPON AN ALLEGED CONTRACT WHICH THE APPELLEE ADMITTED IN HIS TESTIMONY HAD BEEN ABANDONED AND WAS NEVER CONSUMMATED. Tomlin, et al. v. Combs, et al., 21 So. 782; Abrams v. Allen, et al., 109 Miss. 688; Isler v. Isler, 110 Miss. 419.

II. THE APPELLANT, PUGH, WAS ACTING AS AGENT FOR APPELLEE GRESSETT AND AT HIS DISCRETION TO OBTAIN A PURCHASER FOR THE STOCK IN QUESTION, AND BROUGHT THE APPELLANT, AND HOWARD, TOGETHER, AND WAS NOT A PARTY TO THE ALLEGED CONTRACT.

III. THE BILL SHOULD HAVE BEEN DISMISSED BY THE COURT BELOW, BECAUSE THERE WAS NEVER A MEETING OF THE MINDS ON ACCOUNT OF THE FALSE REPRESENTATIONS MADE BY APPELLEE OF THE INDEBTEDNESS DUE BY THE CORPORATION. We contend that the evidence plainly shows that the minds of the parties never met and no agreement was ever entered into or trade consummated. We, further, contend that the representations made by Gressett were of such character and nature as to give appellants the right to refuse to carry out the proposed trade for the sale of the corporation stock by Gressett. This court has recently so clearly stated the law pertaining to false representations and so thoroughly reviewed and cited the decisions in our state with reference to same, that we think it sufficient to refer to the case of Alexander et al. v. Meek et al., 96 So. 101, in support of our contention, that the decree in this cause should be reversed and a decree rendered in this court dismissing complainant's bill.

IV. THE LEARNED COURT BELOW SHOULD HAVE DISMISSED THE BILL OF COMPLAINT ON THE DEFENSE OF APPELLANTS THAT THE SUIT IS BASED ON A VERBAL CONTRACT, AND IS WITHIN THE STATUTE OF FRAUDS. Section 4779, Code of 1906, section 3123, Hemingway's Code of 1917, note on p. 394, 14 A. L. R.; Young v. Alexander et al., 86 So. 461, 123 Miss. 708.

V. THERE WAS NO CONTRACT IN WRITING FOR THE SALE OF THE STOCK. Section 175, p. 295, 1 Elliott on Contract; St. Louis & S. F. R. Co. v. Gorman, 28 L. R. A. (N. S.) 637; Yazoo & M. V. Railroad Co. v. Jones, 114 Miss. 787; Pioneer Co. v. Price, 96 So. 103; Packet Co. v. Streuby, 91 Miss. 211; Holt v. Winfield Bank (C. C.), 25 F. 814; Abeles v. Cochran, 22 Kan. 410; 31 Am. Rep. 194; Kimbrough v. Davies, 104 Miss. 722.

Amis & Dunn, for appellee.

I. The facts of the case are so related to the questions of law presented by the assignment of errors, that it seems to us to be more convenient to discuss and consider the pertinent facts under and in connection with the legal questions separately presented and insisted upon. It is contended in this court that the bill of complaint is one for specific performance and cannot be maintained for the reason that only chattels were involved in the contract, and that equity will not undertake to enforce performance of a contract of a sale of such property, except under certain circumstances. The equitable rule invoked is well established and we readily agree that if the bill of complaint was purely one for specific performance the decree of the court below is wrong. But a casual reading of the bill of complaint will suffice to show that neither its averments nor the prayer thereof makes it a bill for specific performance of a contract. It is perfectly manifest that the case as made by the bill of complaint is simply one for the purchase money due on the sale of a chattel. Ordinarily actions of this kind are instituted in courts of law and not of equity, and in some jurisdictions the court of equity is without jurisdiction to try the issues incident to a suit to recover the purchase price of a chattel. This, however, is not the case under section 147 of the Constitution of Mississippi. We submit that the appellee was entitled to sue for the price agreed to be paid for the stock under the facts and circumstances pleaded and proven on the trial of the case. It is not...