76 Ind. App. 272 | Ind. Ct. App. | 1920
Complaint by appellee for damages, alleging that the appellee entered into a contract with a corporation in which the appellants were stockholders, to purchase certain shares of the preferred and common stock and that the appellants in order to induce the appellee to purchase such stock agreed in writing to purchase any and all of said stock of appellee at a fixed price provided the appellee notified the appellants between August 10, and September 10, 1916, of his desire to sell said stock; that relying upon said contract with appellants, appellee purchased 150 shares of the preferred stock and seventy-five shares of the common stock of said corporation, and that on-September 9, 1916, he exercised his option and right to sell said shares of stock at the fixed price in the agreement, and demanded that the appellants purchase said stock which they refused to do.
Judgment against the appellants for $1,700 from which they appeal and assign as error the action of the court in overruling their demurrer to the second paragraph of complaint and in overruling their motion for a new trial.
Appellants insist that the court erred in giving instructions Nos. 1 and 2 as requested by appellee. These instructions were to the effect that the contract for the sale of shares of stock in the corporation being for an amount in excess of $50 was under the statute of frauds required to be in writing and could not be- varied by parol.
Mechem, after quoting the English law as laid down by Mr. Benjamin, wherein it is stated that the statute does not apply to “shares, stocks, documents of title, choses in action, and other incorporeal rights and property,” says: “In the United States, as will be observed from the summary given, the statutes are often more comprehensive than the English act, extending to ‘goods’ in some cases, and in others to ‘personal property.’ The variance has caused a somewhat different line of results to be reached here, though there is doubt
“Stocks in corporations, which are not generally included in England, are here usually deemed to be within the statute, though this ruling in some cases was made under the more comprehensive statute referred to. In the leading case in Massachusetts, where the statutory language was ‘goods, wares and merchandise,’ it was said: ‘There is nothing in the nature of stocks, or shares in companies, which in reason or sound policy should exempt contracts in respect to them from these reasonable restrictions designed by the statute to prevent fraud in the sale of other commodities. On the contrary, these companies have become so numerous, so large amount of the property of the community is now invested in them, and as the ordinary indicia of property, arising from delivery and possession, cannot take place, there seems to be a peculiar reason for extending the provision of the statute to them.’ On the' other hand, in a late case in Maryland, it is said: ‘A subscription for shares of stock in an ordinary corporation is not a contract for the sale of goods, wares and merchandise ; words which comprehend only corporeal movable property. Shares of stock aré but choses in action, and are not within the statute.’ ” 1 Mechem, Sales §§330 and 331. See also, 25 R. C. L. 616, §230; 20 Cyc 243; and Smith, Law of Frauds §373.
Appellants cite Rogers v. Burr (1898), 105 Ga. 432 in support of the proposition that a contract for the sale of corporate stock is not within the rule. This case, however, was overruled in Hightower v. Ansley
The only other American case cited by appellants in support of that proposition is Vawter v. Griffin (1872), 40 Ind. 593, where the court used dicta to the contrary. See 29 Am. and Eng. Ency. of Law 961, note 3, and note to Sprague v. Hosie (1908), 155 Mich. 30, 118 N. W. 497, 139 Am. St. 558, 19 L. R. A. (N. S.) 874, where reference is made to the Vawter case and the statement therein relative to corporation stock declared to be obiter.
The Supreme Court of the United States in Gay’s Gold (1872), 80 U. S. 358, 20 L. Ed. 606, held that “goods, wares and merchandise” meant every species of property which was not real estate or freehold, while the court in French, Exrx., v. Schoonmaker (1903), 69 N. J. Law 6, 54 Atl. 225 said the words “goods, wares ' and rfierchandise” when used in the statute of frauds are equivalent to the term personal property and are intended to include whatever is not embraced by the words “lands, tenements and heriditaments” in the preceding section.
The Supreme Court of Washington in Hewson v. Peterman Mfg. Co. (1913), 76 Wash. 600, 136 Pac. 1158, 51 L. R. A. (N. S.) 398, says: “It is established by the great weight of authority that corporate stock is goods, wares, and merchandise within the meaning of the statute of frauds.” Citing 20 Cyc 244, 2 Cook, Corporations (7th ed.) §339, Helliwell, Stock and Stockholders 15, 4 Words and Phrases 3131 Sprague v. Hosie,
This rule has been followed in Stifft v. Stiewel (1909), 91 Ark. 445, 125 S. W. 1008, 18 Ann. Cas. 597; Russell v. Betts (1913), 107 Ark. 629, 156 S. W. 457; Korrer v. Madden (1913), 152 Wis. 646, 140 N. W. 325; Snow, etc., Co. v. Johnson (1911), 186 Fed. 745; Boardman v. Cutter (1880), 128 Mass. 388; Berwin v. Bolles (1903), 183 Mass. 340, 67 N. E. 323; French, Exrx., v. Schoonmaker, supra; Greemvood v. Law (1892), 55 N. J. Law 168, 26 Atl. 134; Allen v. Sewall (1829), 2 Wend. (N. Y.) 327; Smith v. Wilcox (1862), 24 N. Y. 353, 82 Am. Dec. 302; Tompkins v. Sheehan (1899), 158 N. Y. 617, 53 N. E. 502; Chicago & Aurora R. Co. v. Thompson (1858), 19 Ill. 578; Pippin v. Ellison (1851), 34 N. C. 61, 55 Am. Dec. 403. See, 25 R. C. L. 616, §230; Smith, Law of Frauds §373.
Instruction No. 7 relative to the measure of damages given at the request of appellee is not well worded, but when considered with the other instructions given, its giving is not reversible error. Judgment affirmed.