« AnteriorContinuar »
of sale to defendant of 3,400 shares of stock | stock is not procurable in the open market in the Mary Mining Company, a corpora- for any known price, and its value is not tion, tendering therewith the certificates of readily ascertainable; that the stock has no stock duly assigned to defendant. He avers provable value, and is sold by the holders that he tendered the certificates, so assigned, thereof at different prices; that the enteron the day the sale was to be consummated prise of the corporation, from a financial by delivery of the stock and payment of the standpoint, is uncertain, and therefore he money therefor. He exhibits the contract of cannot be compensated in damages for desale, which he avers was written by defend fendant's breach of contract. ant himself, which is as follows:
Defendant answered, denying that he had
contracted to buy the stock, but admitting
Aug. 29, 1910. that on the 29th of August, 1910, he and I agree to take 3,400 shares of Haze Mor- plaintiff had a conversation in regard to the gan (Mary mining stock) at 35¢ per share purchase of the stock, and that the price on or before Sept. 15, 1910.
talked of was 35 cents per share. He also [Signed] M. J. Bartlett. admits that, on that day, a memorandum in I, Haze Morgan, bind myself to deliver writing was made of their agreement, which, to M. J. Bartlett the above number of shares he alleges, was an option, and not a sale. of Mary mining stock at 35¢ per share on That memorandum he exhibits with his anthe above date.
swer, and avers that it was made at a later [Signed] Haze Morgan. hour in the day than the writing claimed
by plaintiff to be their contract; that neithHe also avers that said corporation is of er of them was bound by the agreement, but recent creation, and is reputed to have large that it was only an option on the part of copper and gold mineral holdings in the Re- both; and that either party had a right to public of Mexico, which it is just beginning refuse to consummate it. The memorandum to develop, but that it has not yet paid any reads as follows: dividends; that it has issued an sold all the stock that it now proposes to sell, and Memo. 8/29/10. Dr. Bartlett agrees to no more stock is now for sale by it; that its | buy Morgan's Mary Mining Company stock, formance if the shareholder had refused to rights of the other party to the contract. comply with the contract; and that since If defendants accept their offer, complainthere was a part performance of the con- ants cannot afterwards retract it, and thus tract by the shareholder of which the cor- escape a decree in favor of the defendants. poration had taken advantage, the damages If, on the other hand, defendants refuse the to the shareholder caused by the failure of offer, and unsuccessfully resist specific perthe corporation to perform its part of the formance, they cannot be compelled to percontract, under the circumstances of the form, unless performance of every stipulacase, could not readily be ascertained or tion of the contract for their benefit is compensated if the shareholder was com likewise coerced from complainants. In pelled to keep his stock and sue for damages either event complete enforcement of the in a court of law.
legal and equitable rights of the parties will And in First Nat. Bank. v. Corporation be effected by one comprehensive decree, Securities Co. Minn, —, 150 N. W. 1084, and the defendants cannot be remitted to a it was held that a shareholder who elected court of law for the enforcement of any of to sell his stock within the time prescribed their rights.” in the contract for repurchase by the cor- But a contract for the sale of a part of poration, and made a sufficient tender there the corporate stock of an amusement comof, was entitled to a degree of specific per- pany in consideration of certain payments, formance notwithstanding the fact that the which also provided that the amusement agreement before the time of election was company should be entitled to first call lacking in mutuality of remedy. The court upon a certain theater company—of which said that mutuality of remedy is not the the purchaser owned a majority of the stock sole test of specific enforceability, and is --for theatrical attractions that the latter not always essential thereto. The court company should produce for the period of quoted with approval from the opinion in ten years, will not be specifically enforced Henry L. Doherty & Co. v. Rice, 186 Fed. at the instance of the purchaser to compel 213, where it was said with reference to a a delivery of the stock, since it could not contract for the sale of corporate stock, be enforced at the instance of the seller to which originally lacked mutuality of rem- secure a performance on the part of the edy: “The objection of want of mutuality theatrical company to furnish the stipulated of remedy in the sense in which equity uses talent to the amusement company continuthose terms no longer exists. Complain- ously throughout the time designated, as ants seeking specific performance offer to equity will not award specific performance perform on their part, and unreservedly where the duty to be enforced is continuous submit themselves to the court to decree and reaches over a long period of time, rewhatever may be proper in enforcing the 'quiring constant supervision by the court. 3,400 shares, for $1,190, on or before and the court entertained jurisdiction and 9/15/10, if Morgan will sell at that price granted relief in both cases. McGuffin had when Bartlett gets ready to buy. Morgan organized a corporation for the purpose of agrees to sell at that price unless offered a mining coal in Mingo county, aand induced better price.
Hogg to purchase 50 shares of the capital [Signed] H. M. stock at the par value of $100 per share,
agreeing with him, at the time of his pur. Plaintiff replied generally, and deposi- chase, that, if he should wish to dispose of tions were taken by both plaintiff and de- it within two years thereafter, he (McGuffendant, and on the 22d of January, 1913, fin) would give him in exchange therefor 50 the cause was finally heard, and the decree shares of stock in the Harvey Coal Comdenying relief and dismissing plaintiff's bill pany. Hogg elected to make the exchange was made.
within the time, and so notified McGuffin. Apparently the court dismissed the bill But in the meantime McGuffin had sold his for want of jurisdiction in equity. In this Harvey Coal Company stock to a third perwe think the court erred. That equity has son, and therefore could not comply with his jurisdiction to grant relief by decreeing spe contract. The court held, however, that by cific performance of a contract for the sale virtue of his contract Hogg had a right to of stock in a corporation, when the stock the funds derived from the sale of the Harhas a special or peculiar value and is not vey stock. This was as near to a specific readily purchasable in the market, or when performance of the contract as the court it has no certain ascertainable value, there could approach in that case on account of can be little doubt, That such is the law of the intervening rights of innocent third parthis state was held in Hogg v. McGuffin, 67 ties. The first point of the syllabus in that W. Va. 456, 31 L.R.A.(N.S.) 491, 68 S. E. case is as follows: 41, and Bumgardner v. Leavitt, 35 W. Va. “Equity will decree specific performance 194, 12 L.R.A. 776, 13 S. E. 67. The former of a contract for exchange of shares of stock was a suit by the purchaser of stock in a in corporations when legal remedy is not coal company, and the latter was a suit by adequate because the stock sought is of the seller of stock in a steamboat company, special and peculiar value, or is not readily Pantages v. Grauman, 112 C. C. A. 61, 191, nection with the corporation, is too indefiFed. 317.
nite to be specifically enforced. Sheehan v.
Humphreys, 81 N. J. Eq. 416, 83 Atl. 189. Defenses—uncertainty and incompleteness of
-lack of mutuality. contract.
See notes in 50 L.R.A. 507 and 31 L.R.A. Supplementing notes in 50 L.R.A. 507, (N.S.) 499. and 31 L.R.A.(N.S.) 497.
See in this connection cases cited, supra, A contract for the sale of corporate stock under heading “Mutuality of remedy." may be specifically enforced over the objection of uncertainty in regard to the price to
fraud. be paid and the time and manner of pay.
Supplementing notes in 50 L.R.A. 508, ment, where it appeared that the contract
and 31 L.R.A. (N.S.) 500. clearly stated the price to be paid, and pro
A contract for the sale of corporate stock vided that a certain sum due from the seller to the buyer should be applied upon tion that it is unfair, where it did not
may be specifically enforced over the objecthe price; that the buyer should assume and pay a certain sum, being one half of appear that advantage had been taken of the seller's indebtedness to a third person, the valuation was placed upon the stock
the seller's financial circumstances; that and should deposit the balance-$2,500— subject to call to meet future assessments, by both parties, and was to be paid for by in consideration of the performance of canceling the seller's present debts and adwhich the seller agreed to deliver the stock vancing part of the price to meet expected as soon as it was released from pledge; it obligations of the seller which he otherwise
could not pay.
Gilfallan v. Gilfallan, being held that since there were no assess
Cal. 141 Pac. 623. ments, the payment of the balance-$2,500 —was due when delivery of the stock was
--disposition of stock to other persons. offered or by the terms of the contract should have been offered. Gilfallan v. Gil- Supplementing notes in 50 L.R.A. 509 fallan, Cal. — 141 Pac. 623.
and 31 L.R.A.(N.S.) 501. But an agreement by one for the sale and Specific performance will not be ordered transfer of stock owned by him in a certain to compel the transfer of a given number of corporation at a certain price per share, shares of corporate stock, where it is not which did not mention the number of shares, shown that defendant has the shares of and in which it was expressly understood stock in his possession. Lamb v. General that the seller would retain a portion of his Film Co. 130 La. 1026, 58 So. 867. stock as he did not wish to sever his con
A. L. R.
purchasable in the market, or has no certain A number of persons in and around ascertainable value, or a money judgment Clarksburg, where the parties to this suit against the party would be worthless be- resided, owned stock in the Mary Mining cause of his insolvency, or other circum- Company, and it is contended that plaintiff stance in the case calling for specific per- could easily have proved the value of his formance as the only adequate relief.” stock, and consequently the amount of his
In the Bumgardner v. Leavitt Case, Mrs. damage, if any he suffered. But it is shown Bumgardner had purchased stock from by the depositions of witnesses that about Leavitt in a steamboat which he was build the time the alleged agreement was made, ing, under a contingent agreement that he and before and after that time, the stock would repurchase the stock, at cost, or, if had sold at different prices, ranging all the the boat depreciated in value, then at a way from 15 cents to 65 cents per share, fair cash value. The contingencies hap according to the degree of faith that the pened, and she gave him notice of her elec- sellers and purchasers, respectively, haption to resell him the stock, and requested pened to have in the success of the corporahim to comply with his agreement. He de- tion's enterprise. Defendant was the own. clined and she sued for specific relief and er of 19,000 shares at the time he made obtained it. The same rule was again an- the alleged agreement with plaintiff, and he nounced in Lathrop v. Columbia Collieries says he was offered shortly thereafter 2,000 Co. 70 W. Va. 58, 73 S. E. 299. The follow- shares, at 25 cents per share, by Mr. A. J. ing authorities are also in point: Safford Simmons, of Clarksburg, who was the owner v. Barber, 74 N. J. Eq. 352, 70 Atl. 371; thereof. Northern C. R. Co. v. Walworth, 193 Pa. This evidence proves that the stock had 207, 74 Am. St. Rep. 683, 44 Atl. 253; Man- no certain market value. It had no rating ton v. Ray, 18 R. I. 672, 49 Am. St. Rep. in the stock market, and every man who had 811, 29 Atl. 998; Palmer v. Graham, 1 Pars. stock, and wanted to sell it, sold at such Sel. Eq. Cas. 476; 36 Cyc. 560; 26 Am. & price as he was able to get. It also appears Eng. Enc. Law, 2d ed. 122.
that about this time many of the stockholdThe general rule is that for a breach ofers, in and about Clarksburg, had lost faith contract for the sale of personal property in the ultimate success of the corporation's the parties are left to their remedy at law. enterprise, and wanted to sell their stock. But there are many exceptions to the rule. Under such conditions and circumstances, it Where, because of the peculiar and excep. would have been impracticable for plaintional value of the property, as in the case tiff to prove the amount of his damages, and of slaves (Summers v. Bean, 13 Gratt. 404), therefore his remedy at law was not adeor in case of heirlooms (26 Am. & Eng. Enc. quate. Consequently, if he has proved his Law, 104), or the inability to duplicate the contract, ne is entitled to have it enforced. property in the market, and the uncertainty The next question is: Has the contract of its value, and, therefore, uncertainty in of sale been proved? We think it has. Dethe matter of ascertaining the amount of fendant admits, in his deposition, that he damages. In such cases equity will gener- signed the agreement exhibited with the bill, ally compel performance. St. Regis Paper but insists that the option which he filed Co. v. Santa Clara Lumber Co. 173 N. Y., with his answer, signed “H. M.," was later, 149, 65 N. E. 967. Stock in a corporation, on the same day, left on his desk, and that not procurable in the market and having it annulled the agreement signed earlier in an uncertain value, comes within the ex- the day by both parties. He does not say ception to the general rule respecting spe. he was present when the option was writ. cific performance. Inadequacy of legal ten, or that it was handed to him by Morremedy is the basis for equity jurisdiction
gan. He says: “My recollection does not to enforce performance.
serve me correctly as to the exact time I The general rule also is that the remedy found it, but I found this on my desk after is a mutual one. Bumgardner v. Leavitt, we had made this other contract.” supra, and 26 Am. & Eng. Enc. Law, 28.
We are forced to the conclusion, from this To this general rule there may also be ex- and other evidence, that defendant must be ceptions, as, for instance, where one party mistaken as to the time this option was is bound by a writing signed by him, and written out and signed with the initials of the other has not signed it and is not so bound because of the statute of frauds, plaintiff and left on his desk. It must have But it is not necessary to inquire into the been before, and not after, the contract exexceptions to the rule, because the present hibited with the bill was written and signed case falls within the general rule respecting by both parties. Plaintiff and defendant mutuality of remedy. If one party has the occupied adjoining office rooms, which comright to enforce the contract the other has municated with each other, and they met also.
frequently, sometimes more than once on
the same day. Plaintiff swears that they WISCONSIN SUPREME COURT. had two transactions on the 29th of August, one before noon and one after noon; that in
WILLIAM DIBBERT, Respt., the former they had a conversation, and agreed orally to what is stated in the option METROPOLITAN INVESTMENT COMsigned “H. M.;" that after their talk he
PANY, Appt. wrote out the option, retaining a carbon
(158 W’is. 69, 147 N. W. 3.) copy, and placed it in an envelop addressed to Dr. Bartlett, and then returned to de- Elevator liability of owner to pasliver it to him, and did not find him in his
senger. office, and left it on his desk; that at that 1. The liability of the owner of an eletime he (plaintiff) did not wish to enter yator in an office building to those rightinto a binding contract to sell at 35 cents fully using it is that of a common carrier
to passengers." a share, because he hoped to get a better
Evidence - burden of proof fall of price, and says that, a week before that, he
passenger elevator. had been offered 50 cents a share by E. F.
2. Proof by a passenger in an elevator Goodwin, an officer in the Mary Mining in an office building that he was injured Company, who lived in Clarksburg; that, by its fall due to a defective bolt casts after talking with defendant, he again went upon its owner the burden of showing that
he took all the precautions to safeguard to Goodwin and asked him what he ought to get for his stock, and found that Goodwin passengers which the law required him to or his clients were not so anxious then to
Same test by manufacturer buy, and he again went to defendant's of
sity. fice in the afternoon and told him, if he 3. The owner of an elevator in an office would enter into a positive agreement of building which falls to the injury of a sale, he would sell him the stock at 35 passenger, because of the breaking of the
bolt which unites the cables to the car has cents per share, and that thereupon the con
the burden of showing that the manufactract sought to be enforced was written out turer made a test of the tensile strength of by defendant, and was then signed by both the bolt if that would have disclosed its of them. Defendant does not deny that the weakness, or if the apparatus had been paper was then turned over to plaintiff
, or used so long that the manufacturer's neg. that he wrote it. Is it not highly improba- accident, he must show that he examined
ligence might not have been the cause of the ble that experienced business men (and they and tested the parts to ascertain whether both appear to be such) should make a or not they had been weakened by use. written contract, mutually binding, and Elevator liability for manufacturer's then later attempt to convert it into an negligence.
4. The owner of an elevator in an office option, not binding on either of them, without canceling the original agreement? It building is liable for injuries to passengers
because of the negligence of the manufacwas not only wholly unbusinesslike, but the turer of the apparatus in using an unsafe so-called option was valueless and useless. bolt to unite the cables to the car. It is not even a unilateral contract; it obli- Judge prejudice calling other gated neither party to do anything. It judge. makes no reference to the original contract,
5. There is no error in one of several and therefore does not seem to have been judges of a trial court having co-ordinate intended as a cancelation of it. The only a case after an allidavit of prejudice had
jurisdiction calling in another judge to try rational explanation to be found for the been filed against himself, although the affiexistence of the two papers, the execution davit was not filed within the time specified of both of which admitted by the parties, by statute. is that the so-called option was made first *Generally as to liability for injury to and the sale contract later.
an elevator passenger, see notes in 25 L.R.A. This conclusion leads to a reversal of the 33, and 2 L.R.A. (N.S.) 744. decree. A decree will be entered here requiring defendant to pay to plaintiff the Vote. - Liability of a carrier for injury
to passenger by latent defect in car. sum of $1,190, with interest thereon from the 15th day of September, 1910, and that The earlier cases on this question are he be then entitled to the 3,400 shares of discussed in the note to Morgan v. Chesastock, and that he pay plaintiff his costs, peake & 0. R. Co. 15 L.R.A.(N.S.) 790. both in this court, and in the court below. When a passenger is injured because of
a latent defect in a car of the carrier, his Reversed, and decree entered here.
right to recover for such injuries may be
based either upon the negligence of the Lynch, J., absent.
carrier or upon the theory that the carrier,
Evidence transfer of office building Statement by Barnes, J.: injury by fall of elevator.
On February 28, 1912, plaintiff, while rid6. In an action against a corporate owner ing as a passenger in an elevator in the of an office building to hold it liable for office building of the defendant in the city injury to a passenger the elevator
of Milwaukee, was injured by the dropping through a structural defect, there is no error in admitting evidence of the original of the elevator from the fourth floor to the owner of the building that he had conveyed basement. This action was brought to reit to the corporation of which he and his cover damages for injuries sustained. It wife were the principal stockholders. was a cable-hoisted hydraulic passenger ele
vator, running on guides. The elevator cage (May 1, 1914.)
was attached to the cables by means of a
drawbolt or kingbolt. The upper end of the PPEAL by the defendant from a judg. drawbolt contained five eyes A
holes. ment of the Circuit Court for Milwau. Through these holes three hoisting cables kee County in plaintiff's favor in an action were fastened on one side, and two counterbrought to recover damages for personal in- weight cables on the other side. The lower juries alleged to have been caused by de- end of the bolt passed through a saddle fendant's negligence. Modified.
strap, and a nut was screwed onto the is an insurer. The latter theory, viz., that gence of the carrier itself in failing to make the carrier is an insurer, has never been proper tests. adopted, but the passenger's right to re- It is apparent that this theory carries cover is based upon negligence. It is a the liability of the carrier to an extreme. general rule that the carrier owes to pas- The fact that the carrier has selected a sengers a very high degree of care, and any competent manufacturer is not alone suf. failure to exercise this high degree of care ficient to relieve it of liability, if such is regarded as negligence. It is in deter- manufacturer has been negligent. See the mining what acts or omissions of the carrier cases in the earlier note holding the conamount to a failure to exercise this degree trary doctrine. of care that a difference of opinion arises.
Take the abstract case of an injury to The general rule that a carrier is not a passenger due to a latent defect in a car. liable for latent defects is well established It is admitted, on the one hand, that the and is adhered to in Roanoke R. & Electric carrier is not an insurer, but is liable only Co. v. Sterrett, 108 Va. 533, 19 L.R.A. for negligence. But negligence is a relative (N.S.) 316, 128 Am. St. Rep. 971, 62 S. E. term, and depends upon the duty of the car385, in case of a defective bridge which rier. One theory might be that the duty of the carrier had purchased from a thorough- the carrier-and this seems to be the least ly reputable and competent manufacturer. duty that can be imposed on the carrier-is
It is the theory of some cases that the fulfilled when he has purchased the car of a liability of the carrier is not determined reputable manufacturer; that he is under solely by his care, that is, although he may no obligation to inspect it. Another theory have exercised the requisite degree of care might impose more of a duty upon the in inspecting the car and maintaining the carrier, and require him not only to pursame, yet if the manufacturer has been chase of a reputable manufacturer, but to negligent in failing to discover the latent inspect after the car had been in use. Or defect, the carrier is liable for the manu- a still more burdensome duty might be facturer's negligence. This is the theory imposed upon the carrier, and that would adopted in DIBBERT V. METROPOLITAN IN- be to require him not only to purchase of VEST, Co.
a reputable manufacturer, but to inspect the This was the theory of Morgan v. Chesa. car before it is put into use and continue peake & 0. R. Co. '15 L.R.A. (N.S.) 790, this inspection at seasonable times thereand this theory was followed in a second after. appeal of this case reported in 129 Ky. 731, It is conceivable that a court which ad112 S. W. 859. As shown in that note this heres to the first theory might still be of theory is also adopted in New York and the opinion that the carrier should not be California.
relieved of liability for an injury due to a This seems also to have been the theory | latent defect, and might, in order to furnish of Gaiser v. Niagara, St. C. & T. R. Co. 19 a basis for its decision, say that the car. Ont. L. Rep. 31, 14 Ont. Week. Rep. 42. rier is liable for the manufacturer's negliIn that case, however, there was the addi- gence, whereas the defect may have been tional fact that the carrier did not make one that could have been discovered by the a proper examination of the car wheel; carrier by a proper inspection by it. In and the flange which broke owing to a such a case it is more accurate to require latent defect arising from an air hole there a higher degree of care of the carrier, and in had been worn down so as to become thin base the decision upon a failure to comply over the air hole, and there was testimony with this degree of care; in other words, to the effect that it might have been dis- upon its own negligenc
rather than upon covered by a proper examination, which the negligence of the manufacturer. the carrier failed to make; so that the A failure to distinguish in the degree of decision might have rested upon the negli. I care or the duty which the carrier is held