Seagraves v. Wallace, 5706

• Citation: 41 F.2d 679
• Decision Date: 18 July 1930
• Docket Number: No. 5706,5725.,5706
• Parties: SEAGRAVES v. WALLACE et al. WALLACE et al. v. SEAGRAVES.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

41 F.2d 679 (1930)

SEAGRAVES v. WALLACE et al.

WALLACE et al. v. SEAGRAVES.

Nos. 5706, 5725.

Circuit Court of Appeals, Fifth Circuit.

June 13, 1930.

Rehearing Denied July 18, 1930.

Clyde A. Sweeton, of Houston, Tex. (Clyde A. Sweeton and Vinson, Elkins, Sweeton & Weems, all of Houston, Tex., on the brief), for appellant Seagraves.

S. J. Brooks and John Neethe, both of San Antonio, Tex. (Williams, Neethe & Williams, of Galveston, Tex., and Templeton, Brooks, Napier & Brown, of San Antonio, Tex., on the brief), for appellees Wallace and others.

Before WALKER, BRYAN, and FOSTER, Circuit Judges.

WALKER, Circuit Judge.

This suit asserted claims against O. R, Seagraves (herein called the defendant), based on a written contract entered into in July, 1923, between him and Henry M. Wallace (herein called the plaintiff), as agent for the owners of 2,946½ shares of the capital stock of the Corpus Christi Gas Company, an Arizona corporation, the issued and outstanding capital stock of which was 3,500 shares, each of the par value of $100. That contract (in which the plaintiff as agent was referred to as party of the first part and the defendant was referred to as party of the second part), after recitals as to the capital stock of the corporation mentioned, as to bonds secured by first mortgage on the property of that corporation, some of which had been issued and sold and some of which remained subject to be sold, and that the party of the second part desires to purchase control of the above mentioned 2,946½ shares of capital stock at 25 per cent. of its par or face value, stated that the party of the second part, for and in consideration of the agreements of the party of the first part expressed in the contract, agrees to purchase and pay for the above-mentioned 2,946½ shares of capital stock at 25 per cent. of its face value; the contract providing for the defendant paying $5,000 upon the signing of the contract, $4,600 on or before ten days after the signing of the contract, $3,200 within sixty days from the signing of the contract, for his giving at the time of signing the contract three interest-bearing promissory notes for sums aggregating $10,000, and for his paying the balance of the stated price in minimum installments payable, respectively, in each month from November, 1923, to and including September, 1924; the contract providing for the party of the second part having the right to pay at any time more than the stipulated minimum installments for the purpose of liquidating in full the entire purchase price at the earliest possible date, the party of the second part to receive a ten per cent. per annum discount on cash payments made in advance of the dates prescribed for the payment of the stated minimum installments. The contract contained the following provisions:

"The party of the first part hereby agrees:

"First: That he will receive and receipt for all moneys transmitted or delivered to him by the party of the second part, in compliance with the terms hereof, and that he will collect and hold in his possession, all certificates of stock of the Corpus Christi Gas Company, referred to herein, and amounting to two thousand nine hundred forty six and one half (2946½) shares of the par value of One Hundred ($100.00) dollars per share, and

"Second: That upon receipt from the party of the second part of the cash payments provided for herein, and amounting to the sum of Seventy Three Thousand Six Hundred Sixty Two Dollars and fifty cents ($73,662.50) he will then cause said capital stock to be immediately delivered to the party of the second part, or his order, and that he will also cause a meeting of the board of directors of said Corpus Christi Gas Company to be duly called and held, within ten days thereafter, at which time he will also cause the resignation of all officers and directors of the Corpus Christi Gas Company to be duly presented and accepted, at which meeting he will also cause such persons to be elected, in their steads, as directors and officers of the said Corpus Christi Gas Company, as shall be designated by the party of the second part, after they shall have been first qualified by the transfer of at least one share of the capital stock of the Corpus Christi Gas Company to the name of each of said persons:

"* * * The party of the second part hereby agrees * * *:

"Eighteenth: That after the party of the second part shall have made all payments hereunder, and shall have received the capital stock of the Corpus Christi Gas Company, purchased hereunder, and shall have assumed the control and management of the business of the said Corpus Christi Gas Company, that it will immediately take all such steps as shall be necessary for the accomplishment of the following purposes.

"1st. To provide for the establishment and maintenance of a fund for the payment of all semi-annual bond interest coupons, as same shall fall due, on April first and October first of each year thereafter, and the first payment of said semi-annual bond interest shall be made on April 1st, 1924, and

"2nd. To establish and maintain a fund for the purpose of paying off and retiring all the past due unpaid semi-annual interest coupons belonging to the outstanding first mortgage bonds of the said Corpus Christi Gas Company, and that all of said past due unpaid semi-annual interest coupons shall be retired at the rate of two serial coupons, each year, one of said serial coupons to be paid and retired on January first, and one on July first; and further that the first retirement of said past due unpaid semi-annual interest coupons shall be made not later than January 1st, 1925; and further, that...