Spencer v. McGuffin
| Decision Date | 29 March 1921 |
| Docket Number | No. 23460.,23460. |
| Parties | SPENCER et al. v. McGUFFIN. |
| Court | Indiana Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Wabash County; A. W. McCracken, Special Judge.
Action by John B. McGuffin against Robert J. Spencer and others. Verdict and judgment for plaintiff, defendants' motion for new trial overruled, and they appeal. Reversed and remanded.
O. L. Cline and H. J. Paulus, both of Marion, W. G. Sayre, of Wabash, and Condo & Browne, of Marion, for appellants.
Meade S. Hays, of Marion, Griffith D. Dean, of Indianapolis, and Plummer, Todd & Plummer, of Wabash, for appellee.
This was an action by the appellee to recover damages for the breach by appellants of an oral agreement alleged to have been entered into with the appellee and three other persons who owned stock in the O. H. Keller Chair Company, to the effect that appellee and the other stockholders should surrender all of the preferred stock ($1,700) and $52,324.54 of the common stock in said company, and that appellees would thereupon subscribe and pay for at its par value $7,675.46 of such common stock, being an amount equal to all of the common stock in said corporation to be retained by the appellee and his three fellow owners of the stock.
The complaint alleged: That the O. H. Keller Chair Company had a paid-up common capital stock of $60,000, divided into shares of $100 each, and of these appellee owned $52,300, his wife, Ada McGuffin, $100, Oscar F. Cole, $100, and Andrew Jackson, $7,500, and that said Ada W. McGuffin also owned $1,700 of preferred stock in the corporation, being all there was of it; and that after the appellee and the other three stockholders, as the “first parties,” and appellants as the second parties, had executed a written option contract, giving to appellants the privilege of acquiring a half interest in the corporation by subscribing or purchasing and paying for, at par, an amount of stock equal to the sum in which the value of the tangible property of the corporation, as shown by an inventory, should exceed the amount of the corporation debts, and that after the inventory had been taken, and had disclosed that the tangible assets were $33,676.46, and that the debts owing to others than appellee and his wife amounted to $26,100.00, and after the parties to said option contract had examined the said statement and inventory above mentioned, the said defendants thereupon did not act upon the written option, but orally agreed with said first parties that if the said first parties would surrender to said company all of its common capital stock, then owned by them, except $7,675.46, at its par value, and if the said John B. McGuffin would cancel the indebtedness owing to him from said company, and the said Ada McGuffin would surrender the $1,700 of preferred stock she then owned in said company, the said defendants would at once purchase of said company at its par value $7,675.46 in full of such common stock so surrendered to said company by said first parties and would pay therefor in cash to the said chair company the sum of $7,675.46, and the present directors of the company were then to resign, and the said defendants and the first parties would at once elect as directors of said company John B. McGuffin, Robert J. Spencer, and Frank C. Lenfesty, and that said directors would pay to said John B. McGuffin for his services the sum of $100 per month. That thereupon the said first parties agreed to accept said offer of said defendants, and agreed that in consideration of said agreement of defendants that they would purchase said stock then the first parties would surrender to the company all of its common stock, except the said sum of $7,675.46 at its par value, and the said John B. McGuffin agreed that he would cancel his said indebtedness, and the said Ada McGuffin agreed that she would surrender to the company the $1,700 of preferred stock she then owned, and the said contract above mentioned was thereupon entered into by all of said first parties on the one part and the defendants on the other, and it was thereupon expressly agreed by the first parties, in consideration of the agreements of the said defendants to purchase the said $7,675.46 of the said common stock, that the said first parties would surrender all of their common stock, except the sum of $7,675.46, to the said company, and the said John B. McGuffin thereupon agreed that he would cancel his indebtedness against said company, and the said Ada McGuffin thereupon agreed that she would surrender the $1,700 of preferred stock she held in said company, and appellants agreed that they would purchase at its par value $7,675.46 of the capital stock and pay said amount to the company for the same, and it was agreed by all the said parties that all of the directors of the company should resign, and that appellants and appellee should be chosen as directors, and appellee should receive $100 per month.
The complaint alleged that appellee and his fellow stockholders thereafter notified appellants that they were ready and willing to surrender to the company all of the common stock in excess of $7,675.46, and appellee offered to and notified appellants that he was ready and willing to cancel all debts which the company owed him, and appellee's wife notified them that she was ready and willing and offered to surrender to the company the preferred stock held by her, and all of the said parties were ready and willing to do and perform all things agreed to be done and performed by them in carrying out said agreement, and so notified the defendants, and at all times have been ready and now are ready and willing to carry out their part of the agreement, “but that the defendants (appellants) at all times *** have refused and still refuse to carry out their part of said contract and agreement or any part thereof, and notified the plaintiffs and all the other of said first parties and they would not carry out the same.” It further alleged that the appellants procured certain creditors of said company to bring suit to collect their demands and for a receiver, and then promised and agreed with appellee “and all other of said first parties” that they would cause a receiver to be appointed, and that while the receivership was pending appellants would carry out their agreement to so purchase the stock, and thereafter would cause the receiver to be discharged.
But it is alleged that appellants procured an order for the sale of all of the property of said company under which it was all sold by the receiver for $18,250, and was purchased by appellant Spencer, who organized a corporation in which he owned the controlling interest, which acquired such property, and that the good will of the property of the corporation was worth $25,000, besides the tangible property inventoried at $7,687.46, more than the amount of the company's debts. And the conclusion was stated that if appellants “had purchased said stock as agreed by them,” appellee would have owned stock of the par value of $6,863.94, “besides the good will,” and that because of the receiver's sale he “lost his entire property in all of the stock, property, and assets of the chair company.” There was no allegation that the option in writing was ever accepted, but the complaint is based only on the alleged oral contracts.
A demurrer to the complaint on the alleged grounds that there was a defect of parties plaintiff, in that the other three alleged holders of stock, who joined appellee in making the contract pleaded, should be joined, and that the complaint did not state facts sufficient to constitute a cause of action, was filed by each of the appellants, but was overruled, and appellants excepted. An answer of denial was filed, and the cause was submitted to a jury. After numerous exceptions to the admission of items of evidence had been reserved, as well as many exceptions to the giving and refusal of instructions, the jury returned a verdict in favor of the appellee for $9,863.63, on which judgment was rendered. Appellants each separately moved for a new trial, specifying as errors the admission of each of such items of evidence, the giving of each of 12 instructions, and the refusal to give each of 6 instructions requested by appellants. This motion was overruled, and appellants excepted, and have each assigned as error the overruling of their demurrers to the complaint, and the overruling of their motions for a new trial.
[1] The objection first urged against the complaint is that it counts upon an oral contract for the sale of capital stock of a corporation of value greatly exceeding $50. And it is urged that the statute (Burns' 1914, § 7469; R. S. 1881, § 4910) controls which declares that “no contract for the sale of any goods for the price of fifty dollars or more shall be valid,” where none of the property is received and no part payment is made, “unless some note or memorandum in writing of the bargain be made, and signed,” etc. Many authorities support this contention. 25 R. C. L. p. 616; Statute of Frauds, § 230; 20 Cyc. 244; 4 Thompson, Corp. (2d Ed.) § 4116; 2 Cook on Corp. (7th Ed.) § 339.
An examination of the cases cited in support of the proposition, and of the laws of the states in which they were decided shows that many of them are based upon statutes which expressly require that sales of “personal property” or of “things in action” for a designated price shall be evidenced by a writing, as well as all such sales of “goods.” Thompkins v. Sheehan, 158 N. Y. 617, 53 N. E. 502; California Civil Code, § 1739; Idaho Rev. Code, § 6009: Colorado Mills Ann. St. vol. 1, c. 55, § 2025; Franklin v. Matoa G. M. Co., 158 Fed. 941, 86 C. C. A. 145, 16 L. R. A. (N. S.) 381, 14 Ann. Cas. 302;Snow Storm M. Co. v. Johnson, 186 Fed. 745, 751, 108 C. C. A. 615;Spear v. Bach, 82 Wis. 192, 52 N. W. 97;Southern L. I. Co. v. Cole, 4 Fla. 359, 378: Massachusetts Acts 1908, c. 237, § 4; ...
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