Scranton Axle & Spring Co. v. Scranton Board of Trade
| Decision Date | 26 May 1921 |
| Docket Number | 240 |
| Citation | 271 Pa. 6,113 A. 838 |
| Parties | Scranton Axle & Spring Co., Appellant, v. Scranton Board of Trade |
| Court | Pennsylvania Supreme Court |
Argued April 13, 1921
Appeal, No. 240, Jan. T., 1920, by plaintiff, from judgment of C. P. Lackawanna Co., Jan. T., 1919, No. 829, on pleadings, for defendant, in case of Scranton Axle & Spring Co. to use of S. S. Spruks et al. v. Scranton Board of Trade. Reversed.
Assumpsit on agreement of defendant to purchase stock from plaintiff. Before NEWCOMB, J.
Defendant filed an affidavit of defense raising questions of law.
The opinion of the Supreme Court states the facts.
Judgment for defendant. Plaintiff appealed.
Error assigned, inter alia, was judgment, quoting it.
The judgment is reversed with a procedendo.
William J. Fitzgerald and John P. Kelly, for appellant. -- If a subscription has been accepted by the corporation, or an offer of shares by the corporation has been accepted by a subscriber, and statutory or charter requirements have been complied with, there is a sufficient consideration for the promises of both parties.
The usual measure of damages for breach of an agreement to purchase stock is the difference between the purchase price and the market value of the shares: Bole v. Fulton, 233 Pa. 609. This, however, is where the stock has a market value. But where the evidence discloses that the stock has not a market value the measure of damages is the purchase price and interest: Flannery v. Wessels, 244 Pa 321; Rhey v. Ebensburg, etc., Co., 27 Pa. 261.
Frank E. Donnelly and W. L. Hill, of Knapp, O'Malley, Hill & Harris, for appellee. -- The proposal was not accepted.
The proposal offered was a mere gratuity: Nolle v. Mut. Union Brewing Co., 264 Pa. 539; Richards v. Richards, 46 Pa. 78.
The stock was not legally issued: Dorsey v. Packwood, 50 U.S. 126; Tally-on-top Salesbook Co., 17 Pa. C.C.R. 199.
Before FRAZER, WALLING, SIMPSON, KEPHART and SCHAFFER, JJ.
The parties hereto are Pennsylvania corporations, and, on January 16, 1915, the defendant, the Scranton Board of Trade, by resolution, offered to purchase of plaintiff $10,000 worth of its seven per cent preferred stock, at par, in four annual installments of $2,500 each. At a meeting of plaintiff's board of directors, held four days later, it was unanimously resolved: "That in compliance with the resolution of the board of trade herewith presented, the proper officers of this company be authorized to take the necessary steps to legally issue $10,000 worth of preferred stock at 7% payable semi-annually and to secure any authorization from the stockholders that may be necessary to comply with the requirements in such a case." Thereafter, on the 28th day of the same month, at the annual meeting, at which all of plaintiff's stockholders were present, it was resolved by their unanimous vote that the board of directors be instructed to issue "$10,000 of preferred stock of such kind and quality as said board may deem best and to place, sell or otherwise dispose of the same according to its discretion." On February 11, 1915, at a meeting of plaintiff's board of directors, the president and treasurer were unanimously authorized to issue and sell $10,000 of the company's 7% preferred stock. Thereupon on the same day, plaintiff's president and secretary notified defendant's secretary, "that the plaintiff company would sell and deliver, and was ready to sell and deliver to the defendant company the preferred stock of the plaintiff company mentioned in the resolution of the defendant company on the terms and conditions therein set forth"; and, on March 18, 1915, plaintiff's secretary delivered such preferred stock, to the par value of $2,500, as the first installment thereof, unto defendant's secretary who accepted and paid for same. Plaintiff was ready, able and willing to deliver defendant certificates for the remaining installments of stock as called for...
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