Vye v. Parker

• Decision Date: 16 June 1954
• Docket Number: No. 11957.,11957.
• Citation: 214 F.2d 73
• Parties: VYE v. PARKER.
• Court: U.S. Court of Appeals — Sixth Circuit

214 F.2d 73 (1954)

VYE v. PARKER.

No. 11957.

United States Court of Appeals, Sixth Circuit.

June 16, 1954.

Bruce Parkhill, Chicago, Ill., Harry S. Manchester, Youngstown, Ohio, on brief, for appellant.

Ashley M. Van Duzer, Cleveland, Ohio, Thomas A. Quintrell, Cleveland, Ohio, Lewis L. Guarnieri, Warren, Ohio, on brief, for appellee.

Before ALLEN and McALLISTER, Circuit Judges, and FORD, District Judge.

ALLEN, Circuit Judge.

The sole question presented in this appeal from a judgment of the District Court dismissing an action for broker's commission is whether the case should have been submitted to the jury. The appellant had been instructed by appellee to sell the stock of The Standard Transformer Company, an Ohio corporation of which appellee was president and majority stockholder. Through his wife and daughter's holdings appellee had complete control of the stock. He desired to sell the business but wished to continue to control and operate the company and to maintain and protect his organization. Appellant suggested that Illinois Institute of Technology, an educational institution, might be interested and appellee authorized appellant to take up the matter with the Institute. Appellee set the price of the business at $2,500,000 and made his retention of control as managing head of the business and protection of his organization a condition of the sale. This was specifically admitted by appellant. Appellee wanted a down payment of $500,000 but later this requirement was withdrawn. Also, he desired to carry out the transaction in such a way that corporation and personal taxes should be minimized. Appellant suggested that if the property was sold to a non-profit organization such as the Institute the income of the company might be held tax exempt. But agreement was never reached as to the correctness of this proposition, concerning which appellee's advisors were extremely doubtful. The Institute itself said that it could not consider any deal based upon tax exemption of the operating company. However, it declared it was interested in acquiring appellee's business and wished to retain him and his organization. Several negotiations along these lines were held between appellee and representatives of the Institute. At a meeting in Chicago February 21, 1950, after a conference with the president and assistant secretary and treasurer of the Institute (R. J. Spaeth), appellee and appellant met with Louis S. Hardin, counsel for and a trustee of the Institute, who had specialized in federal taxes. Hardin assured appellee that the Institute would endeavor to obtain exemption from income taxes for the operating company, and suggested that the Institute form an independent foundation to make the purchase and organize a Delaware corporation to operate the business. Hardin explained the Institute's view of the advantages of organizing the new foundation and of having the Delaware corporation carry out the purchase, said that the Institute did not wish to furnish management and would give appellee a management contract which Hardin agreed to prepare. He stated that the Institute was not concerned about term or salary and that appellee might have anything within reason he wanted. Appellee did not know what term or salary he wanted. On the matter of control of the board of directors of the operating company Hardin suggested that appellee name a minority of the board and choose the majority from the 60 trustees of the Institute. Appellee at the close of this meeting said he was generally satisfied and agreed that Hardin should prepare the necessary papers to reduce "the oral agreement to writing."

The draft contracts prepared and for warded to appellee included a management contract with appellee, a contract of sale of The Standard Transformer Comany, and an indenture. The amount of down payment of the business was left blank in the contract of sale, which ran to the technology foundation instead of to the Institute. The term and the amount of salary were left blank in the employment contract. When the papers were presented to appellee's attorneys, they advised him that the proposed contracts did not protect him and he refused to go on with the deal. Appellant claims that the conversation of February 21, 1950, of appellee with Hardin, in which appellee stated that he was generally satisfied and agreed that papers should be prepared to reduce the oral agreement to writing, taken together with the preliminary negotiations, constitute evidence of a completed contract under which appellant secured for appellee a purchaser ready, willing and able to buy, thus entitling him to a commission. Hence he contends that the District Court was required to submit the case to the jury.

The District Court in a memorandum, part of which is appended in the margin,¹ held that appellant did not produce a purchaser willing and able to buy upon the terms laid down by appellee and dismissed the complaint. We think the judgment must be affirmed.

Appellant's contention that this case was required to go to the jury is based upon loose statements by appellee, such as that he was generally satisfied and that a deal to sell the stock had been secured by appellant. But appellant's obligation was not satisfied unless he did more than generally to satisfy the appellee. If on the undisputed facts no contract was secured conforming to the terms laid down by appellee and never withdrawn and if no purchaser was secured ready, able and willing to buy, the judge was required to take the case from the jury.

Appellee's principal terms which were a condition of the sale and were never changed were: (1) that the price should be $2,500,000; (2) that the operation should be subject to his complete control through a long-term employment contract in which he should direct the operation and the protection of his organization. In the contract submitted by Hardin appellee's term of employment and the amount of his salary were not fixed; his office was not defined. Hardin stated that appellee could have anything "within reason;" but this is not a legally enforceable contract term. What is within reason to one person may be totally unreasonable to another and this statement had no legal force and effect. As to control, this was proposed to be obtained by appellee's choosing a minority of the directors and choosing the remaining majority from the Institute's own directors. In view of these undisputed facts the District Court correctly found that Hardin's propositions on behalf of the Institute constituted a counteroffer differing...