Wood v. Kansas City Home Telephone Co.

• Decision Date: 01 July 1909
• Citation: 123 S.W. 6
• Parties: WOOD v. KANSAS CITY HOME TELEPHONE CO. et al.
• Court: Missouri Supreme Court

123 S.W. 6

WOOD v. KANSAS CITY HOME TELEPHONE CO. et al.

Supreme Court of Missouri, Division No. 1.

July 1, 1909.

Rehearing Denied November 27, 1909.

1. SPECIFIC PERFORMANCE (§ 70)—CONTRACTS ENFORCEABLE—SALE OF CORPORATE STOCK.

A contract for the sale of corporate stock will be specifically enforced, where the stock is not procurable in the market, and the pecuniary value thereof is not ascertainable, or where the stock is of peculiar value to plaintiff to enable him to obtain a legitimate control of the corporation; but specific performance will not be decreed where the stock is purchasable in the market, or has a money value which may be readily computed, or where the contract involves an attempt improperly to interfere with the rights of other stockholders, and hence, in a suit for the specific performance of a contract to transfer corporate stock, evidence that the stock is unlisted, that it is held in a pooling trust so that it cannot well be purchased, and, if purchased, the rights of a stockholder under the pool will be limited, that the corporation is in its infancy, and that the value of the stock is not known, justifies the granting of relief.

2. COMPROMISE AND SETTLEMENT (§ 23)—IMPEACHMENT —BURDEN OF PROOF.

A party asserting the invalidity of a compromise on the grounds of want of consideration and duress has the burden of proving the grounds alleged.

3. COMPROMISE AND SETTLEMENT (§ 19)— IMPEACHMENT —DURESS.

A contract, which effects a compromise between the parties thereto, may be impeached on the ground of duress.

4. CONTRACTS (§ 95)—"DURESS."

The common-law doctrine of "duress," divided into duress by imprisonment and duress per minas, which arises when a person is threatened with loss of life or limb, or with mayhem, or with imprisonment, is in force in Missouri as modified by the decisions of the courts, and in its extensive sense duress is the degree of constraint which is sufficient to affect the mind of a person of ordinary firmness, and includes the condition of mind produced by the wrongful conduct of another, rendering a person incompetent to contract with the exercise of his free will power.

5. COMPROMISE AND SETTLEMENT (§ 8) — AGREEMENT—VALIDITY.

A triparty agreement compromising alleged disputes arising under a municipal telephone franchise was signed by all the parties with knowledge of the facts which they had learned nearly a month before. The agreement was made because one of the parties threatened to refuse to comply with a prior contract and to avoid a threatened civil lawsuit because thereof. All the parties were in full possession of their faculties. Held, that the contract was not procured by duress.

6. COMPROMISE AND SETTLEMENT (§ 18)—RESCISSION —ESTOPPEL.

A party to a compromise agreement having three constituent parts, who accepts the benefits under two parts thereof, cannot repudiate the third on the ground of duress, since, to cancel a contract on the ground of duress, the entire contract must be repudiated and the parties placed in statu quo.

7. CANCELLATION OF INSTRUMENTS (§ 23)— CONDITION PRECEDENT.

A contract induced by duress is ordinarily voidable only, and the party seeking to avoid it must place the parties in statu quo.

8. COMPROMISE AND SETTLEMENT (§ 19)—ESTOPPEL.

A party to a triparty compromise agreement, made in view of threatened litigation, who keeps property to which he was not entitled except under the agreement, and who delayed for two years or more before seeking to set aside the agreement on the ground of duress, could not set aside the agreement on the ground of duress.

9. CONTRACTS (§ 270)—DURESS—RESCISSION.

A rescission of a contract on the ground of duress must occur when the duress is removed.

10. COMPROMISE AND SETTLEMENT (§ 6)— CONSIDERATION.

Where a right is disputed and a compromise ensues, the compromise is supported by a sufficient consideration, and it will not be disturbed on it subsequently appearing that one of the parties thereto had no right in law.

11. COMPROMISE AND SETTLEMENT (§ 6)— AGREEMENT—VALIDITY.

Where the parties entering into a compromise agreement had a bona fide dispute between themselves as to their rights under a municipal telephone franchise, and the parties knew the facts, the agreement was supported by a sufficient consideration and was enforceable.

Appeal from Circuit Court, Jackson County; John G. Park, Judge.

Action by Henry Wood, trustee, against the Kansas City Home Telephone Company and others. From a judgment for defendants, plaintiff appeals. Reversed and remanded, with directions.

Charles B. Stark and Elijah Robinson, for appellant. A.F. Broomhall and Ward, Hadley & Neel, for respondents.

GRAVES, J.

For some months prior to November 9, 1901, one John Enoch had been diligently engaged in trying to procure a franchise from Kansas City to construct and maintain a telephone system in said city. From the evidence it appears that the city had previously granted a franchise to what is thought was an independent concern, but nothing came from it, and the old telephone company continued to hold the field undisputed as to competition. It would appear that the purpose of the then mayor was to secure competition in the telephone business in the city, and if possible to obviate what had been denominated "sell outs" in franchises granted. The mayor had conceived the idea of requiring a deposit to be made by applicants for franchises, which deposit was to his mind the best evidence of good faith, and which deposit as he thought would tend to compel the applicant to accept the terms of the ordinance granting the franchise, and thus compel the building of a new telephone system in the city. It appears that Enoch had put up a guaranty of $1,000 and had succeeded in getting his ordinance through the lower branch of the common council. At this point the mayor took a hand. Recalling past experiences, and fearing that another "sell out" was apparent, he interested himself in opposition to the ordinance, and frankly told Enoch and his representatives his reasons therefor, which were as above indicated. The mayor had the matter blocked in the upper house of the common council. Enoch, who lived at St. Charles, Mo., was introduced to Charles B. Stark by a mutual acquaintance, Mr. Player, then a prominent official of the city of St. Louis. This was some time prior to September 15, 1901. Enoch was trying to get parties interested so that he could get this franchise through the common council and build the plant. Stark was a personal friend of the mayor of Kansas City, and had a clientage in St. Louis among men of means, who could furnish the money with which to finance the deal. Stark went to Kansas City and had a talk with the mayor, and further proceeded to get together a syndicate of St. Louis capitalists to handle the proposition. Enoch frequently met Stark in St. Louis, and the result of it all was an agreement to organize a corporation to take over the franchise granted to Enoch. Mr. Stark and his associates incorporated the People's Telephone Company. At the suggestion of Enoch, Stark and his friends had first drawn up articles of association in the name of the Home Telephone Company; but when on December 24, 1901, he visited Jefferson City to obtain a charter from the Secretary of State, it was found that a company under that name had been chartered, and that Enoch was one of the incorporators. On December 21st Enoch had, by written assignment duly acknowledged, assigned his interest to the People's Telephone Company. When Stark found the name Home Telephone Company already appropriated, he took out his charter by changing to the new name in the Secretary of State's office, and further had the assignment of the franchise again re-executed by Enoch. Under this assignment Stark and his friends in St. Louis claimed title to the franchise which had been granted to Enoch. There was also an agreement between Enoch and Stark, as trustee for the syndicate, of the same date, December 21, 1901. This agreement covered the details of the organization of the corporation.

Now, going back to where we left off in the history of the ordinance: As stated, the mayor had blocked the passage of the ordinance. Early in November, or on November 4th, the work of the mayor brought fruition. Enoch got the Central Construction Company, a copartnership composed of Ed. L. Barber, James S. Brailey, and O. C. Snider, to put up a guaranty fund of $20,000 in order to secure the passage of said ordinance in the upper house of the common council. This money, at the mayor's suggestion, was placed in the hands of three prominent citizens of Kansas City, who took and received it under written conditions signed by them, thus: "Received the 4th day of November, 1901, from John Enoch, the sum of twenty thousand ($20,000.00) dollars, upon the following terms and conditions to wit: Whereas, there is now pending before the upper house of the common council of Kansas City, Missouri, an ordinance entitled `An ordinance granting for a term of thirty years to John Enoch, his successors and assigns, the right, privilege and authority to construct, lay and maintain and operate in Kansas City, Missouri, and through the public streets, avenues, alleys and thoroughfares thereof, underground conduits, poles, wires and other appliances for the purpose of furnishing and supplying to Kansas City and the inhabitants thereof a telephone system,' which said ordinance passed the lower house of the common council of Kansas City, Missouri, September 3, 1901: (1) Now, if said ordinance shall not become a law within fifteen days from the date hereof, then said $20,000 is to be returned to the said John Enoch, his order or assigns, upon the said John Enoch or his assigns, duly delivering to the undersigned, for and on behalf of Kansas City, Missouri, a written relinquishment of all rights which they may have under and by virtue of said ordinance. (2) If said...