Udy v. Jensen

• Decision Date: 08 January 1924
• Docket Number: 4007
• Court: Utah Supreme Court
• Parties: UDY v. JENSEN

222 P. 597

63 Utah 94

UDY v. JENSEN

No. 4007

Supreme Court of Utah

January 8, 1924

Appeal from District Court, First District, Box Elder County; M. C Harris, Judge.

Action by C. A. Udy against Hyrum Jensen. Judgment for defendant and plaintiff appeals.

AFFIRMED.

B. C Call, of Brigham City, for appellant.

W. J. Lowe, of Brigham City, for respondent.

CHERRY, J. WEBER, C. J., and GIDEON, THURMAN, and FRICK, JJ., concur.

OPINION

CHERRY, J.

Plaintiff sued defendant for the price of twelve shares of the capital stock of Tremonton Furniture Company, which it was alleged defendant had in writing agreed to purchase, but had refused to accept and pay for. The defense was that the written agreement constituted an option in favor of defendant, and not a contract to purchase. Defendant had judgment, and plaintiff appeals. The interpretation of the contract is the only question presented. The written agreement is as follows:

"This agreement, made this 15th day of July, 1920, by and between Hyrum Jensen of Collinston, Utah, party of the first part, and C. A. Udy of Ogden, Utah, party of the second part, witnesseth:

"That in consideration of the covenant on the part of the party of the second part hereinafter contained, the party of the first part hereby covenants and agrees to and with the party of the second part to pay to him the par value ($ 100.00) per share for twelve shares of stock in the Tremonton Furniture Company, plus 4 per cent. for accrued gains since January 15, 1920.

"Payments to be made as follows: $ 416.00 (four hundred sixteen no/100) together with interest at the rate of 8 per cent. per annum from date, to be paid on or before January 1st, 1921, at which time the said party of the second part is to deliver to the party of the first part four shares of such stock, together with all gains and dividends adhering thereto.

"On or before January 1st, 1922, a like sum of $ 416.00 with accrued interest at the rate above stated shall be paid for another four shares of said stock, and on or before January 1st, 1923, the final payment of $ 416.00, with accrued interest at the rate stated, shall be paid for the last four shares of said stock.

"This agreement shall not be binding upon the party of the first part for any of his property whatsoever, but the party of the second part shall hold the certificates of said stock until paid for by the party of the first part; that is to say, that upon the payment of the first amount herein mentioned for the first four shares, the, party of the second part shall deliver to the party of the first part certificates for such shares, which shall then be exempt from this contract, and so with respect to the payment and delivery of the second amount and number of shares, when paid for. * * *

"In consideration of the covenant on the part of the party of the first part herein contained, the party of the second part hereby covenants and agrees to and with the party of the first part to sell said stock for the price and terms herein stated, and to claim no share whatever in gains or dividends accruing so long as this contract is observed on the part of the party of the first part."

Apparently deeming the contract ambiguous and uncertain, the trial court, without objection, admitted parol evidence to explain it. This testimony was somewhat conflicting. There was however, substantial evidence to the effect that the defendant was the president and the principal stockholder of the corporation; the plaintiff was the owner of twelve shares of its capital stock, and shares of stock were owned by various other persons. At a meeting held in June, 1920, at which the plaintiff and defendant and several other stockholders were present, the defendant stated that the company was in debt, but he believed he could "pull it through" if he had time; that he offered to purchase all of the stock at par, on the condition that he "placed none of his personal interests in jeopardy," and did not stand personally liable...