Fitzsimmons v. Lindsay

205 Pa. 79 | Pa. | 1903

Opinion by

Mb. Justice Mitchell,

The decree cannot be sustained on the ground upon which it was put by the court below. If the administrator has revoked the submission by the decedent hi his agreement that fact should be averred by answer. It does not appear on the face of the bill and therefore cannot be set up by demurrer. And even h the administrator has revoked the submission it does not follow that the court under the prayer for general relief may not go on to ascertain “ the fair price or book value of the shares,” so as to give effect to the option provided for in the agreement.

What the bill avers is that the administrator refuses to execute the agreement because he does not consider it legally binding. His objections are not tenable on demurrer. There is nothing illegal in the agreement on its face as set out in the bill. Each subscribing stockholder acquired a preferred right by way of option, to purchase the shares of the others if they died or withdrew from the business first. This was a mutual and sufficient consideration to make a binding contract. Whether equity will enforce it specifically will depend on the circumstances as they may be developed by the evidence. But the demurrer shows nothing in the bill inconsistent with the enforcement of the agreement upon the principles of Goodwin Gas Stove & Meter Co.’s Appeal, 117 Pa. 514, and Northern Central Ry. Co. v. Walworth, 193 Pa. 207.

Nor is the objection that the agreement is in restraint of alienation sufficient. Such agreements are quite common among partners as to their shares in the firm assets and are enforced by courts without hesitation. No reason of overruling public policy is apparent why they should not also be sustained in relation to shares of stock in what is really only a private trading corporation.

But the objection to the jurisdiction of the court is well taken. The shares were the property of the decedent and on his death passed as part of his estate to the administrator who must account for them to the orphans’ court. Even conceding his right to revoke the submission which the agreement of his decedent provided for, his action in doing so must be justified before that court, and on the other hand the question of the complainant’s equity to have specific performance of his agreement must go to the same tribunal. The dismissal of the bill was- therefore proper on the ground of the want of jurisdiction in the common pleas.

Decree affirmed.