Waller Carson & Co. v. Leedom (In re Leedom's Estate)

• Decision Date: 25 May 1937
• Citation: 273 N.W. 471,225 Wis. 148
• Court: Wisconsin Supreme Court
• Parties: In re LEEDOM'S ESTATE. WALLER CARSON & CO. v. LEEDOM.

225 Wis. 148

273 N.W. 471

In re LEEDOM'S ESTATE.WALLER CARSON & CO.

v.LEEDOM.

Supreme Court of Wisconsin.

May 25, 1937.

Appeal from a judgment of the County Court for Milwaukee County; D. E. McDonald, Judge.

Affirmed.

Waller Carson & Co., a corporation, filed a claim in the county court against the estate of James B. Leedom, deceased, to recover the purchase price on a sale of corporate stock by the claimant to the deceased. Objections to the claim were filed by the executrix of Leedom's will, and upon a trial of the issues the court entered judgment disallowing the claim upon the merits. Upon an appeal by the claimant that judgment was reversed and the cause remanded for a new trial. In re Estate of Leedom, 217 Wis. 534, 259 N.W. 721, 261 N.W. 683. Upon the second trial judgment was entered allowing the claim; and the executrix appealed from that judgment.Carl F. Geilfuss, of Milwaukee (Peter J. Hayes, Walter D. Corrigan, Sr., and A. C. Backus, all of Milwaukee, of counsel), for appellant.

Bitker, Tierney & Puchner, of Milwaukee (William H. Page, of Madison, of counsel), for respondent.

FRITZ, Justice.

The judgment under review allows a claim filed by Waller Carson & Co. (a corporation, hereinafter referred to as the claimant) for the recovery of the purchase price on an alleged sale on September 11, 1930, by the claimant to James B. Leedom, deceased, of 1,400 shares of common stock of the Wisconsin Investment Company, a Wisconsin corporation. On the first trial the claimant relied primarily upon two instruments dated September 11, 1930, and entitled, respectively, “Wisconsin Investment Co. Subscription Contract,” and “Statement.” The material portions of those instruments are quoted in an opinion which was filed, but subsequently withdrawn, on the first appeal herein, and which appears as a footnote in 218 Wis. 536, 259 N.W. 721. On that appeal, after first concluding that there was apparently no contract because of a lack of mutuality, we ordered a new trial, upon a motion for a rehearing, on all issues, including particularly “whether Waller Carson & Co. ever became legally obligated to Leedom to make delivery of the stock to him, as a purchaser thereof.” Upon the conclusion of the second trial, the court stated in its decision that “the main question in this case is whether there was a mutuality and meeting of the minds” of Leedom and the claimant; and that from all the testimony it could come to but the one conclusion, that the state is liable on the claim.

[1][2] In appealing from the judgment entered pursuant to that conclusion, the executrix of Leedom's will (hereinafter called the appellant) contends that the claimant's proof does not meet the theory upon which a new trial was awarded, and that, therefore, the alleged contract remains unilateral and lacks mutuality. Although neither the so-called “Subscription Contract,” nor the claimant's “Statement” of September 11, 1930, expressly states who is the vendor, or obligated to deliver the purchased stock, it is apparent, upon taking into consideration, in connection with those instruments, all of the competent evidence received on the second trial, that Leedom, as well as the claimant, intended and fully understood that the latter was the vendor, and obligated to deliver the stock to Leedom. There is sufficient credible evidence to fairly and reasonably establish those facts, but particularly significant in that regard are repeated and consistent statements to that effect in letters and statements of account which were sent to Leedom by the claimant between September 11, 1930, and September 11, 1932 (when it brought suit against the former on the contract), to which he never objected or otherwise replied. Thus, by way of illustration, in the very first statement rendered to Leedom by the claimant on September 11, 1930, there was the notation, “Please make check payable to Waller Carson & Company.” In its letter to Leedom on November 3, 1930, the claimant wrote, “Your account with Waller Carson & Co. has been credited with $33.33 covering the dividend on 1000 shares of Wisconsin Investment Company.***” In its letter to Leedom on December 13, 1930, claimant wrote,

+-----------------------------------------+
                ¦“9/11/30¦Purchase of 1400   ¦            ¦
                +--------+-------------------+------------¦
                ¦        ¦shares Wisconsin   ¦            ¦
                +--------+-------------------+------------¦
                ¦        ¦Investment Com-    ¦            ¦
                +--------+-------------------+------------¦
                ¦        ¦pany Common Stock  ¦            ¦
                +--------+-------------------+------------¦
                ¦        ¦at $10.50          ¦$14,700.00  ¦
                +--------+-------------------+------------¦
                ¦12/13/30¦Interest from 9/18/¦            ¦
                +--------+-------------------+------------¦
                ¦        ¦30 to date         ¦208.01      ¦
                +--------+-------------------+------------¦
                ¦        ¦                   ¦$14,908.01  ¦
                +--------+-------------------+------------¦
                ¦10/31/30¦Dividend           ¦33.33       ¦
                +--------+-------------------+------------¦
                ¦12/13/30¦Balance due Wal-   ¦            ¦
                +--------+-------------------+------------¦
                ¦        ¦ler Carson & Co.   ¦$14,874.68”;¦
                +-----------------------------------------+
                

and again in its letter of March 17, 1931, the claimant wrote, “Our books show that you have purchased from us 1,400 shares of Wisconsin Investment Company common (old) on which payment has been extended from time to time to suit your convenience. The amount due on this account is $14,700.00 with accrued interest from September 18, 1930.”

Those and similar statements, to which Leedom never took exception or even replied, furnish ample basis for inferring acquiescence on his part in the mutual intention and understanding that the claimant was the vendor (Ripley v. Sage Land & Imp. Co., 138 Wis. 304, 308, 119 N.W. 108, 23 L.R.A.[N.S.] 787), under the “Subscription Contract” signed by Leedom on September 11, 1930, and that therefore that contract was not invalid because of lack of mutuality. Appellants' contention that the “Subscription Contract” is not in the usual form of either an original sale of its stock by a corporation, or a sale of corporate stock by an owner or through a broker, is of no consequence inasmuch as under all of the facts and circumstances it does appear that an agreement which was actually entered into is not invalid for want of mutuality.

[3][4][5] Appellant contends that the court erred in excluding parol evidence intended by her to establish a contemporaneous oral agreement to the effect that Leedom's purchase under the written contract of September 11, 1930, was dependent upon a condition precedent, under which he was not to pay for the 1,400 shares purchased under that contract until after he realized on the sale by the claimant, at $29 per share, of certain Cities Service Company stock, which he owned; and that the court also erred in excluding testimony of certain witnesses to the effect that several years after negotiating the contract of September 11, 1930, the claimant's former representative made oral statements in their presence, in which he admitted that condition precedent. In substance and character, the excluded evidence was virtually the same as evidence which we concluded was inadmissible for reasons stated in the opinion filed on the former appeal. As the court's rulings on the second trial are in accord with that opinion, they must be sustained in so far as they are again challenged on grounds which were presented on the former appeal, and which were considered insufficient. However, in addition to the former grounds, the appellant, in a reply brief filed after the oral agreement herein, contends for the first time that the excluded evidence was also admissible to establish a fiduciary relationship between Leedom and the claimant, in that the latter was acting as an advisor to enable Leedom to improve his security holdings; and that the claimant, by insisting on payment under the contract of September 11, 1930, without having first sold Leedom's Cities Service Company stock, breached that fiduciary relationship, and therefore cannot recover. It may suffice to note that appellant is not entitled to relief on a ground asserted for the first time at that late stage of the litigation. Roseliep v. Herro, 206 Wis. 256, 263, 239 N. W. 413. But, furthermore, it is evident from the record that Leedom's business and legal knowledge and experience were equal to that of the claimant, and its representative, who negotiated the transactions with Leedom; and that the record does not warrant the conclusion that Leedom was depending upon the claimant's advice, or that there was any such fiduciary relationship between them as to render the rule of caveat emptor inapplicable.

[6][7] Appellant contends that the contract of September 11, 1930, is void because it was entered into in violation or disregard of the statutes, in that its form had not been submitted to and approved by the Railroad Commission as required by section 189.17 (6), Stats.1929; that the names of the agents or brokers, and amounts of their commissions were not stated in the contract as required by section 189.20, Stats.1929; and that the sale was made without the claimant having a written permit from the Railroad Commission as required by section 189.10 (1), Stats. 1929. The claimant denies that there was any such violation of, or failure to duly comply with, any applicable statute, but in addition also contends that, if there had been, the contract would have been merely voidable at Leedom's option, and that he did not elect to avoid it within the time allowed under the statutes. That contention is sound. Contracts, made under circumstances constituting violations or noncompliance in the respects stated in appellant's contentions, are not absolutely void. Instead, they are merely voidable under the provision in section 189.22 (1), Stats.1929, that “every sale of a security in violation of...