Western Securities Company v. Atlee

• Decision Date: 30 June 1912
• Citation: 151 N.W. 56,168 Iowa 650
• Parties: WESTERN SECURITIES COMPANY, Appellant, v. WILLIAM H. ATLEE et al., Appellees
• Court: Iowa Supreme Court

151 N.W. 56

168 Iowa 650

WESTERN SECURITIES COMPANY, Appellant, v. WILLIAM H. ATLEE et al., Appellees

Supreme Court of Iowa, Des Moines

June 30, 1912

TUESDAY FEBRUARY 9, 1915.

Appeal from Lee District Court.--HON. W. S. HAMILTON, Judge.

ACTION in equity for the specific performance of a contract to convey an electric light plant in the city of Ft. Madison Iowa. The trial court sustained a demurrer to the petition and plaintiff appeals.

Affirmed.

Seerley & Clark, for appellant.

Blake & Wilson, and George B. Stewart, for appellees.

DEEMER, C. J. LADD, EVANS and PRESTON, JJ., concur.

OPINION

DEEMER, C. J.

According to the allegations of the petition, which for the purposes of this appeal must be deemed true, plaintiff and appellant is a corporation doing business under the name given in the title of the case, and prior to June 3, 1912, Samuel Atlee and J. C. Atlee were engaged in business in the city of Ft. Madison, Iowa under the firm name of S. & J. C. Atlee. As a part of its business it owned and conducted an electric light plant in said city, and owned the real estate upon which the main plant was conducted, with all the machinery and the wires and poles leading therefrom. J. C. Atlee died long prior to the year 1912, but Samuel Atlee continued the business under the firm name as a surviving partner, down until the time of his death, which occurred after the transactions to which we shall refer took place.

The defendants are the administrators of the Samuel Atlee estate; the heirs at law of J. C. Atlee, deceased; one Trawick, who, plaintiff alleges, claims some interest in the property in virtue of a contract with S. Atlee during his lifetime; and the Ft. Madison Electric Company, which, as is alleged, claims some interest in the property through Trawick, or Stone & Webster, for whom Trawick was acting. As to the two last named parties, Trawick and the Ft. Madison Electric Company, plaintiff alleged that their rights and the rights of each of them are subject and inferior to plaintiff's claim under the contract and arrangement which we shall presently set out, and that they acquired their interests, whatever they may be, with full and express notice and knowledge of plaintiff's claim under its contract. It also avers that none of these third parties have any other claim than under a contract with S. Atlee personally, and not with the firm of which he was a member.

It is conceded that plaintiff originally had an option for the purchase of the electric light plant, signed bye Samuel Atlee in the name of S. & J. C. Atlee, and it is averred that this was converted into a contract for the sale or exchange of the electric light plant. Plaintiff relies upon certain letters or written propositions and acceptances, and its whole case rests upon these writings and not upon any oral testimony.

To understand the case, it is necessary to set these out in the order in which they were written, and we here copy them in full. The original option read as follows:

"Ft. Madison, Iowa June 3, 1912.

"For the consideration of One Dollar ($ 1.00) in hand paid, we hereby give the Western Securities Company a Sixty (60) day option on our electric light and power plant for a consideration of $ 125,000.00 in cash; 40 per cent to be paid in 30 days after acceptance, 40 per cent in 90 days and 20 per cent in four months. (Signed) S. & J. C. Atlee."

This was afterward modified as follows:

"We hereby extend the above option 30 days from expiration. Accepted. Western Securities Co. By C. H. Walsh.

"Above in case deal can be carried by said Western Securities Company, final answer to be given within above limited time. Western Securities Company, By C. H. Walsh.

"If trust agreements and other papers satisfactory, we will accept for the above properties Par preferred stock and to wit $ 125,000.00 and 31,500 common stock. S. & J. C. Atlee. August 27, 1912.

"Extended Fifteen (15) days from August 27, 1912.

"Extended Five (5) Days from September 10, 1912.

"S. Atlee."

It is claimed that this option was merged into a contract by the following instrument, signed by both parties.

"September 13, 1912. Option this day accepted and preferred and common stock of American Power & Light Company to be issued in accordance with price named.

"Western Securities Company,

"By C. W. Walsh.

"S. & J. C. Atlee."

Which was followed by a letter, which we here reproduce:

"Boston, Mass., Oct. 8, 1912.

"Messrs. S. & J. C. Atlee,

"Fort Madison, Iowa.

"Gentlemen:

"As per acceptance of the option given by you for the sale of your electric light plant in Fort Madison, as I telephoned you, we are ready to close up the deal for your property and would ask you to hasten the surveys and abstract and title papers so as to deliver same as soon as possible. Also give Billsby & Company, Engineers, of Chicago, freedom to examine the property. I will be in Fort Madison when I return west.

"Respectfully,

"Western Securities Company,

"By C. H. Walsh."

It is alleged in the petition that:

"At the time of the making of the said acceptance, and at all times since, the plaintiff has been ready, willing and able to comply with the terms thereof, and it hereby tenders into court the amount of stock as provided for in the said agreement as made with the said S. & J. C. Atlee, heretofore herein referred to. . . . That although it has been at all times ready, willing and able to carry out its agreement as aforesaid, and has demanded a specific performance of its contract by the administrators of the estate of Samuel Atlee and the heirs of the said J. C. Atlee, all of whom are made defendants herein, the said defendants, and each of them, refuse to carry out the said agreement and have undertaken to make sales to other parties, regardless of said contract, and they neglect and refuse to carry out the said contract with the plaintiff, or comply with the terms thereof."

Plaintiff also averred:

"That on November 29, 1912, after the acceptance of the contract and after the said S. & J. C. Atlee were asked to furnish abstracts, they made a contract with Stone & Webster, a copy of which is hereto attached, marked Exhibit 'D,' and made a part hereof, but the contract was then signed by only Samuel Atlee, who has since died."

The contract therein referred to was in this language:

"Stone & Webster.

"Boston, November 29, 1912.

"Samuel Atlee, Esq.,

"Fort Madison, Iowa.

"Dear Sir:--

"We will pay you Fifty-five Thousand Dollars ($ 55,000.00) cash for the entire property employed by you in the electric light and power business at Fort Madison, subject to the following terms and conditions:

"1. This offer includes all real and personal property (except accounts receivable and cash on hand), easements, franchise and rights owned, used or occupied in the generation and distribution of electric energy, for light and power, which are to be conveyed free and clear of all incumbrances, indebtedness and liability, actual or contingent. It is understood that the real estate on Johnson Street, on which the power house is located, is about 225 by 200 feet, and that you will grant an easement over your other property to enable us to draw water from the Mississippi River, and will also convey the right to lay a spur track from the power house to the C. B. & Q. track in the rear, in such manner as may be necessary to reach the same. Both easements to terminate if and when the property conveyed shall cease to be used for the location of a plant for generation or distribution of electric energy.

"2. You are to take care of all liabilities, actual or contingent, existing in connection with the business at the date of completion of sale.

"3. The offer is conditional on our obtaining a new franchise satisfactory to us for the term of twenty-five (25) years, for the use of the public streets.

"4. The offer is conditional upon our receiving a satisfactory report from our attorneys on the title to the property and franchises above described; and is also subject to our accounting examination, the results of which are to be satisfactory to us.

"5. The financial, legal and physical status of the property shall not be materially different at the time of purchase from that existing at the time of the accounting and legal examination, and it is understood that no service contracts will be made during this period without our approval.

"6. On receiving your acceptance of this offer, we will proceed to make the legal and accounting examination, and as soon as we receive satisfactory reports, will apply for a new franchise, and as soon as the same is granted will make payment and take over the property, the same to be conveyed as of the first of some month.

Very truly yours,

"(Signed) Stone & Webster.

"I accept the above offer, and as I am to be absent, designate G. B. Stewart to act as my representative in my absence and receive payment. (Signed) Samuel Atlee."

The demurrer to this petition was the general equitable one, and to arrive at the real grounds relied upon we are compelled to go to briefs of counsel for appellees.

It is argued that as plaintiff did not except to the judgment which was rendered for want of amendment to its petition after the demurrer was sustained, there is nothing to appeal from although plaintiff did in fact except to the ruling on the demurrer. Our Code provides that an appeal may be taken directly from a ruling on a demurrer. See Code Sec. 4101, Par. 3. Of course, an exception must be taken to the ruling, and that was done in this case. When a demurrer to a petition is sustained, and plaintiff excepts and does not amend his pleadings, he may appeal directly from the ruling, and if judgment be entered against him...