Stewart v. Pierce

• Decision Date: 14 February 1902
• Citation: 89 N.W. 234,116 Iowa 733
• Parties: STEWART v. PIERCE ET AL.
• Court: Iowa Supreme Court

116 Iowa 733

89 N.W. 234

STEWART

v.PIERCE ET AL.

Supreme Court of Iowa.

Feb. 14, 1902.

Appeal from district court, Polk county; C. P. Holmes and S. F. Prouty, Judges.

This is an equitable action, in which the plaintiff alleges that he is the owner of one-half of the capital stock of the Homestead Company and of the Pierce-Wallace Publishing Company. He asks a decree establishing his ownership in the stock claimed, and for other relief as herein stated. The Homestead Company was a corporation with a capital stock of $20,000, divided into 200 shares. The Pierce-Wallace Publishing Company is a corporation with a capital stock of $60,000, divided into 600 shares. On the 8th day of January, 1895, the plaintiff owned 70 shares of the stock of the Homestead Company, the Pierce-Wallace Publishing Company owned 118 shares of its stock, the defendant owned 1 share, Henry Wallace owned 1 share, 9 shares stood in the name of Frank Dunning, and 1 share in the name of A. G. Lucas. The Pierce-Wallace Publishing Company stock was owned in equal shares by Henry Wallace and the defendant Pierce. The Pierce-Wallace Company owned a publication known as the “Wisconsin Farmer” and one known as the “Live Stock Indicator.” Both of these papers were issued from the Homestead office in Des Moines. On the 8th day of January, 1895, the plaintiff and the defendant Pierce entered into a written agreement, which is set out in full as follows:

“This agreement, made this eighth day of January, 1895, by and between James M. Pierce, of Des Moines, Iowa, and Samuel F. Stewart, of Evanston, Illinois, witnesseth:

1st. That by the terms of this contract all differences between them are settled, compromised, and adjusted forever.

2nd. That from and after January 1, 1895, said Stewart shall be employed by the Homestead Company, of Des Moines, Iowa, as advertising solicitor, to have general charge of the territory east of the Mississippi river, until otherwise agreed upon, and said Pierce shall be employed by said company as business manager, each to receive a salary of three thousand dollars (3,000) per annum and hotel and traveling expenses while engaged in the business of the company, payable monthly; such employment to continue until July 1, 1900.

3rd. That the Homestead Company shall pay to said Stewart in settlement of his claim for salary since October, 1892, and up to January 1, 1895, twenty-two hundred and forty-five dollars ($2,245), the same to be paid in installments within a reasonable time.

4th. The Homestead Company will, whenever it can be done upon satisfactory terms, acquire the assets of the Pierce-Wallace Publishing Co., and also the lot of ground upon a part of which the building now occupied by said Homestead Company stands, and which lot is now owned by said Pierce and Henry Wallace. To this end said Pierce hereby agrees with said Stewart that he will sell and convey an undivided half of his interest in said real estate to said Stewart at net cost to him, and they shall both convey their interests to the Homestead Company as soon as it shall acquire the interest of said Wallace.

5th. It is the purpose, intent, and spirit of this agreement that said Pierce and Stewart shall stand and continue in every respect equal in the ownership, management, and control of said Homestead Company; and to this end it is expressly agreed and understood that, should either of them at any time hereafter acquire the stock of Henry Wallace in the Pierce-Wallace Publishing Company, or in any part of it, or the stock now owned by said Wallace or that formerly owned by him in the Homestead Company and now held by said Pierce-Wallace Publishing Company, or any part of it, or the lot described in paragraph 4 hereof, he shall be deemed and understood as holding, and it is hereby agreed that he will hold, the same one-half for himself and one-half as trustee for the use and benefit of the other; he to be reimbursed for one-half the cost of same, including the expenses of acquisition, if any, and will thereupon, upon request, make transfer accordingly.

6th. In specifying the equality of interest of said Pierce and Stewart in the Homestead Company, it is agreed and understood that said Stewart owns and represents the seventy shares of stock now standing in his name on the books of said company, and that said Pierce represents and can and will control the seventy shares of stock now standing on the books of company, nine shares in the name of Frank Dunning, one share in the name of A. G. Lucas, one-half of one hundred and eighteen shares in the name of the Pierce-Wallace Publishing Company, and one share in his own name; and said Pierce hereby agrees to be personally responsible that said shares of stock shall at all times act in harmony with and assist in carrying out this agreement, as well as an agreement executed by and between the Homestead Company and said Stewart concurrently herewith.

7th. Upon the execution of this agreement, and also of a concurrent agreement to be executed by and between said Stewart and said Homestead Company, it is agreed that the suits of said Stewart against said Pierce and against Lafayette Young, now pending in the district court of Polk county, Iowa, shall be disposed of as settled and dismissed; and it is further understood and agreed that the suit of said Stewart against the Homestead and others now pending in the United States circuit court for the Southern district of Iowa, Central division, shall be considered settled as to said Pierce, but shall be retained on the docket for such hearing and decree, if any, as may hereafter be deemed advisable in the interest of the parties hereto and of said company; but whenever it is apparent that said suit cannot be of further service to the parties hereto and to said company in carrying out this agreement, it shall also be disposed of, settled, and dismissed. All costs and attorney's fees and expenses for complainant and for Pierce in said cause shall be paid by the Homestead Company. Any advantages accruing from the continuation of the said suit shall be for the equal benefit of the parties hereto.

8th. As soon as convenient hereafter, Frank Dunning shall resign as secretary and member of the board of control of the Homestead Company, and said Stewart shall be elected to fill said positions, and shall be continued in them, and said Pierce shall be continued as president and member of the board of control, both until July 1, 1900. Should a vacancy occur in the office of treasurer, either said Pierce or said Stewart, as they may agree, may be elected treasurer; but in such event it is distinctly understood and agreed that he shall not be entitled to two votes in the board of control because of holding two offices.

9th. Every effort will be made by the parties hereto to avoid friction, misunderstanding, or difference; but if and as often as disagreement between said Pierce and Stewart shall arise upon any matter concerning said Homestead Company, its business, management, or policy, or concerning the discharge by said Pierce or Stewart of his duties to said company under his contract of employment, which disagreement they cannot harmonize, the same shall, at the request of either party, be submitted to arbitration in the usual manner. Should either party hereto refuse to choose his arbitrator for five days after written notice served on him by the other party, then application may be made to any judge of the district court of Polk county, Iowa, assigned to the chancery docket, to appoint such arbitrator, and, should he decline to make such appointment, then the arbitrator for the party so refusing shall also be selected by the other party. In case of arbitration as herein provided, the decision of the arbitrators shall be entered on the books of the Homestead Company with the proceedings of the board of control, and such decision shall be final.

10th. There being certain provisions in this agreement concerning the Homestead Company which it may not be legally bound to perform, at least without the unanimous consent of the stock, the parties hereto expressly agree that each of them will be responsible personally for, and it is hereby guarantied, that the same will be ratified and performed to the extent of the seventy shares of stock in said company owned and represented by him as well as of any other stock in said company which he may hereafter acquire, failing in which he agrees to be personally responsible for any loss or damage which the other party may sustain by reason of such failure.

11th. The charter of said Homestead Company will expire about July 1, 1900. Should no satisfactory agreement be made for renewal or extension of such charter, or some satisfactory plan agreed upon for the disposition of the property and plant of said company, on or before May 1, 1900, then it is hereby agreed that the entire property, plant, and good will of said Homestead Company as a whole, except the real estate, shall be advertised for not less than thirty days, and shall be sold at public sale to the highest bidder not later than July 1, 1900. The real estate shall be disposed of as may hereafter be agreed upon, or, in the absence of any such agreement, as the law may direct.

12th. Should either of the parties hereto desire to sell his entire holding of stock in the Homestead Company, he shall give the other party the option for twenty days to take the same at the selling price. There being no way of proving the damage which might be sustained by reason of a breach of this provision, it is hereby agreed that for a breach of the same the selling party shall forfeit and pay to the other party the sum of five thousand dollars (5,000), the same being expressly agreed upon as liquidated damages, and not penalty. It is further expressly agreed and understood that in the event of the death of either said Pierce or Stewart this provision shall apply to, govern, and control...