Voss Bros. Mfg. Co. v. Voss, 13331.
| Decision Date | 07 October 1946 |
| Docket Number | No. 13331.,13331. |
| Parties | VOSS BROS. MFG. CO. v. VOSS et al. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Charles D. Waterman, of Davenport, Iowa (Alfred Magnusson, W. B. Waterman, and Lane & Waterman, all of Davenport, Iowa, on the brief), for appellant.
Wayne G. Cook, of Davenport, Iowa (F. J. MacLaughlin and Cook, MacLaughlin, Blair & Balluff, all of Davenport, Iowa, on the brief), for appellees.
Before SANBORN, THOMAS, and JOHNSEN, Circuit Judges.
The appellees, on January 16, 1945, contracted to sell to The Industrial Machine Key Corporation a majority of the capital stock of Voss Brothers Manufacturing Co., of Iowa, a family corporation. On February 17, 1945, the buyer assigned its interest in the contract to the appellant. On February 21, 1945, the appellant tendered full performance of the contract, but the appellees refused to deliver the stock contracted for. Appellant brought this action for specific performance. Jurisdiction is based upon diversity of citizenship. The appellees asserted, in defense, that they had rescinded the contract before the appellant tendered full performance. This defense is based upon a provision in the contract stating that if the buyer made a demand for a reduction in the purchase price "prior to the date of actual closing," the sellers might accept the reduction or they might reject it, and that, if they rejected it, the contract should be void.1
The only controverted issue of fact at the trial was whether the appellant had, in the forenoon of February 20, 1945, made a demand for a reduction in the purchase price. The only substantial issues of law were, (1) whether the rejection of the demand, if any, on February 21, 1945, terminated the contract, and (2) whether the withdrawal of the demand after its rejection, revived the contract.
The District Court resolved all of these issues in favor of the appellees. It found that the appellant made a definite demand for a reduction in price on February 20, 1945, and that the appellees, on February 21, 1945, declared the contract terminated. Specific performance was denied and the appellant's complaint was dismissed. The appeal is from the judgment entered upon the findings. The controlling law is that of Iowa, where the contract was made and was to be performed.
The appellant asserts that the District Court erred in determining that there was a demand for a reduction in purchase price within the purview of the contract and that the rejection of this demand terminated the contract; and that the court erred in failing to hold that the buyer's withdrawal of the demand immediately after its rejection by the sellers entitled the buyer to specific performance.
The evidence shows that on February 20, 1945, the day fixed by the contract for its closing, Phillips, the President of the appellant, and Narins, its Vice-President, met in the forenoon with Walter K. and William L. Voss and Bernard F. Balluff, their counsel, in Balluff's office in Davenport, Iowa. The purpose of the meeting was to close the sale. Narins had with him the independent audit which, by the terms of the contract, was to be procured by the buyer. There were discrepancies between the audit and the financial statement which had been furnished by the appellees. These discrepancies were discussed at the meeting. George H. Hansen, a public accountant whose firm supervised the accounting of Voss Brothers Manufacturing Co., of Iowa, was called into the discussion. The testimony of Phillips and Narins was to the effect that they were seeking no reduction in purchase price, but were attempting to secure an explanation of the discrepancies and to satisfy themselves that the financial statement did not constitute a serious overstatement of financial worth. They both testified that no reduction in price was demanded by them at any time.
The testimony on behalf of the appellees was to the effect that the discussion of the discrepancies between the audit and the financial statement culminated in a demand by Narins that the purchase price be reduced. Balluff testified that a net reduction of $12,550 was demanded, and the evidence of Walter K. Voss was to the same effect. William L. Voss testified that Narins finally asked a reduction of $12,500. Hansen testified that there was $12,000 to $14,000 in dispute, and that Narins stated that he wanted a reduction in purchase price. The appellees' evidence also showed that after Phillips and Narins had demanded a reduction, they requested a response to their demand, but were advised that other interested parties would have to be consulted and a reply deferred until the following morning.
On the morning of February 21, 1945, Balluff, on behalf of the appellees, after a conference with Walter K. and William L. Voss and Hansen, advised Phillips and Narins that their demand for a reduction in purchase price was rejected and the contract rescinded. Narins replied that no reduction had been demanded, and that if anything he had said had been construed...
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