No. 22400 | Neb. | Sep 22, 1923
This is an action by the Atlas Refining Corporation, plaintiff, to recover from Joseph H. Vaughan and Jacob C. Vaughan, partners, doing business as J. H. Vaughan &
Defendants admitted the execution of the contract rescinding the sale and their liability for improvements and merchandise aggregating $13,831.68, but filed a cross-petition pleading an itemized indebtedness of $25,-727.64 due from plaintiff to defendants, a credit of $17,-231.68, and demanding judgment for the difference, or $8,495.96. The indebtedness pleaded by defendants consisted of charges for equipping an additional oil station at Hemingford; for trucks used in distributing oils; for debts assumed by plaintiff; for depreciation in the value of property; for salaries and expenses of defendants, while in the employ of plaintiff, and for other enumerated items.
In an answer to the cross-petition plaintiff pleaded that ali matters and differences between the parties had been adjusted and settled by the contract rescinding the sale.
The trial court admitted proof tending to show that the items of indebtedness pleaded in the cross-petition were not included in the rescission or settlement and permitted the jury to find in favor of defendants on that issue. As a result the verdict contained findings that defendants were indebted to plaintiff in the sum of $13,-831.68, that plaintiff owed defendants $22,327.64, and-that the latter were entitled to recover the difference, or $8,-495.96, which, with interest, amounted to $9,105.52. To prevent a new trial defendants remitted from the verdict $3,882.50, and from a judgment in their favor for $5,223.02, plaintiff appealed.
“At a directors’ meeting of the Atlas Refining Corporation held. September 4, 1920, the sale of the J. H. Yaughan & Son oil stations was considered, and, owing to a failure on the part of the Atlas Refining Corporation in obtaining a permit to sell or issue stock of said company, said company is unable to carry out its contract with J. H. Vaughan & Son; and J. H. Vaughan & Son are desirous of rescinding said contract, and have heretofore and do hereby demand a rescission of said contract of the sale of said stations at Alliance, Antioch and Hemingford; and said J. H. Yaughan & Son hereby tender-back to the Atlas Refining Corporation $30,000 of the capital stock of the Atlas Refining Corporation and return to said company, $8,640 put into said stations by the Atlas Refining Corporation; and said J. H. Yaughan &*756 Son also agree to pay the Atlas Refining Corporation the invoice price of all merchandise on hand on the 30th and 31st days of August, 1920; and the Atlas Refining Corporation by good and sufficient bill of sale is to convey all interest of the Atlas Refining Corporation in and to said properties.
“The Reliance Refining Corporation of Delaware, claimed some right in a certain contract with J. H. Vaughan & Son for the sale and purchase of the above oil stations, but said Reliance Refining Corporation have heretofore waived and disclaimed any right in any contract with said J. H. Vaughan & Son for the reason that they were unable to carry out the conditions of the same.
“With the assent of the holders of two-thirds of all the capital stock of the corporation issued and outstanding and by authority of the board of directors now in session, the said board of directors hereby consent to the rescission of the contract between J. H. Vaughan & Son and the Atlas Refining Corporation and hereby, as a board of directors, rescind said contract, on the conditions hereinbefore set forth, by putting each party in the same plight that they were formerly in, and the board of directors by this resolution hereby authorizes the officers of the Atlas Refining Corporation and instruct them by good and sufficient bill of sale or any other instrument in writing that may be necessary to convey back all title, claim or interest that the Atlas Refining Corporation may have claim in and to the oil properties of J. H. Vaughan & Son at Alliance, Antioch and Hemingford, Nebraska, so that said J. H. Vaughan & Son shall have said properties free and clear of any claim or claims of the Atlas Refining Corporation.
“September 4, 1920.
“I hereby accept the terms and conditions of the foregoing resolution and we are accepting bill of sale under said conditions and agree to carry out the terms thereof and attach this to said resolution and make it a part thereof.
*757 “J. H. Vaughan & Son, by J. H. Vaughan.
“J. C. Vaughan.”
Does this contract defeat a recovery for the items of indebtedness enumerated and described in the cross-petition of defendants? They were stockholders and officers in both the Reliance Refining Corporation and the Atlas Refining Corporation. In the negotiations resulting in the sale of the oil stations to the former, in the obligations assumed by the latter as successor and in the contract of rescission, defendants not only acted for themselves but were at the time interested financially and officially in the corporations. In addition, they were experienced in business affairs and had been conducting oil stations for several years. There is no evidence to sustain a finding, that they were induced by fraud to sign the contract of rescission or that they did not understand its terms. There is no reason to construe the circumstances or the writings in their favor.
Prom the date of the purchase 'by plaintiff until the sale was rescinded defendants managed the oil stations without making substantial profits for plaintiff, their employer. They knew plaintiff could not perform it* contract of purchase after investing in the enterprise $8,640, and keeping on hand merchandise inventoried at $5,191.68. They wanted the oil stations back, and before plaintiff made any reconveyance to them they had entered into an agreement to sell the properties to the Mutual Oil Company. They met September 4, 1920, with the other officers of plaintiff to make a settlement. At that meeting the claims pleaded in the cross-petition were discussed, including salaries. Any indebtedness of plaintiff to defendants was then due. Depreciation by use of the personal property to be reconveyed had already taken place. Monthly salaries claimed by defendants had not been demanded or collected when due. Defendants, now pleading that plaintiff owed them $8,495.96 September 4, 1920, then agreed to pay plaintiff $13,831.68,
Reversed.