278 P. 876 | Cal. Ct. App. | 1929
This action is for the purpose of recovering the purchase price of certain stock and is *272 predicated upon a clause in a written agreement executed on June 25, 1923, between the Altomont Creamery, Inc., (respondent's assignor), as the party of the first part, Acme Ice Cream Company, as party of the second part, and C.O. Swanberg (appellant), as party of the third part, which is as follows: "The Third Party further agrees that at any time prior to July 1, 1926, should the first party not have exercised the option next hereinabove given it to exchange the said preferred stock for common stock, he, the Third Party, at the option and upon the request of the First Party, will purchase the said 130 shares of preferred stock at the price of $100 per share, payable at the rate of $1000 upon transfer of the said stock, and not less than $1000 per month thereafter until the entire sum of $13,000 is paid, provided, however, that in case the First Party shall desire to exercise either of the options herein granted, it shall so notify the Third Party not less than 30 days prior to the time when such option shall be exercised, said stock to be pledged as security for payment of the said repurchase price." Respondent A.T. Nielsen, the assignee of Altomont Creamery, Inc., was the owner of all of the stock of the Altomont Creamery, Inc., with the exception of two shares, one of which was owned by his wife and the other by one R.W. Johnstone, and while one Roseberg was the general manager of the Acme Ice Cream Company, appellant C.O. Swanberg appears to have been the controlling spirit of the corporation — at least he dictated its action with reference to the agreement under consideration in which he agreed to purchase the Acme Ice Cream Company stock from Altomont Creamery, Inc., respondent's assignor, which stock was to be pledged as security for the payment of the "repurchase price." Judgment was entered for plaintiff for $3,000, as the monthly installments found to be due under the contract up to the filing of the complaint, and from such judgment defendant has appealed.
Appellant specifies the following errors: the court erred in finding that respondent elected to exercise the option contained in the agreement sued upon; that respondent tendered the stock to appellant; that the Altomont Creamery, Inc., or its assignee, performed all the terms and conditions of the agreement sued upon on their part; that defendant did breach, break and repudiate said agreement, *273 and that there is now due, owing and wholly unpaid and was at the time of the commencement of this action due, owing and wholly unpaid by appellant to respondent the sum of $3,000. The first and main question presented is, did respondent exercise his option, for under the terms of the agreement sued upon it was incumbent upon him to notify appellant thirty days prior to July 1, 1926, that he elected to do so.
[1] The testimony relative to the demand or notification that respondent desired to exercise his option is without dispute that respondent called upon appellant at the Granada Hotel in San Francisco in February, 1926, and said to him: "I asked him if he bore in mind that I had 130 shares of stock that would be due and payable about June or July, and he said `yes,' he was aware of that fact and that it would be taken care of. Q. Did he say anything as to what was meant by the expression `taken care of'? The Court: You say you made a demand upon him? A. Yes. Q. Now, what was that demand? A. The demand that he pay me $1000 a month on the preferred stock, which he had guaranteed to repurchase. Q. Did you say that to him in the same language you have used here, or substantially that language: A. I said to him exactly as I said before. I asked him if he was aware of the fact that that would be due and payable at that time, and he said yes, that he had that in mind, and that it would be taken care of." In this conversation respondent requested that appellant purchase the stock, "that he pay me $1000 a month on the preferred stock, which he had guaranteed to repurchase." Appellant contends that this statement that he demanded that appellant pay him $1,000 a month on the preferred stock is qualified by respondent's answer to the question by the court: "I said to him exactly as I said before. I asked him if he was aware of the fact that that ($1000 a month) would be due and payable at that time and he said yes, he had that in mind, and that it would be taken care of." We question appellant's claim that respondent intended to qualify his statement that he demanded that appellant pay him $1,000 a month on the preferred stock. In any event, appellant must have understood that respondent was exercising his option and requesting *274 him to purchase the preferred stock. This is shown by his answer: "Yes, he was aware of that fact and that it would be taken care of." This is further evidenced by appellant's statement to respondent when the latter called at the Granada Hotel in July, as testified to by respondent: "I know what you are here for and I have a long story to tell you . . . He was very sorry to have to tell me that he wasn't able to pay me for the stock right now, but if I would not get excited about it and go to court about it, he would make arrangements to pay me a little later on."
In Flickinger v. Heck,
[2] As to appellant's contention that the notification should be in writing to take it out of the statute of frauds, it may be said that appellant had bound himself in writing in the original contract to perform his obligation to purchase the stock upon Altomont Creamery, Inc., respondent's assignor, notifying appellant of its desire to exercise the option. [3]
Furthermore, as no objection was interposed at the trial nor motion for nonsuit made, the objection cannot now be insisted upon (Nunez v. Morgan,
[6] A rehearing was granted in this case in view of appellant's contention that the original decision was in conflict with the rule announced in Levinson v. Silverman,
"The complaint clearly states a cause of action for the return of the purchase price of the stock with interest in accordance with the terms of the agreement executed by the defendant to Hulen. (Schulte v. Boulevard Gardens Land Co.,
The case of Williamson v. Marshall, referred to as in accord, is found in
In Hulen v. Stuart the certificates were not indorsed over, and the court held that, the certificates being produced in court, the plaintiff should recover the full purchase price and indorse and deliver the stock to the defendant.
[7] Furthermore, appellant was a party to the agreement; was the active representative of the Acme Ice Cream Company, the second party therein in consummating the agreement, and as such his promise to purchase back the stock which was to be pledged for the "repurchase price" constituted an agreement of repurchase as in Hulen v. Stuart. As is said in Williamson v.Marshall, supra, which we again quote: "The sole purpose of the present action, notwithstanding the form of the prayer of the complaint, is to recover from the defendants the sum of money agreed to be repaid in accordance with the terms of the agreement. . . . The consideration had passed to the obligor and the only duty imposed upon the defendants was the obligation to repay the sum of money specified. . . . Having alleged that the defendants had promised to pay the fair and reasonable value of the stock (here $13,000 in monthly instalments of $1,000) and for which, when determined by the court to be fair and reasonable, judgment is prayed, it is unnecessary to allege that plaintiff has been damaged in such sum." *279
[8] Appellant contends that respondent failed to prove the performance of the conditions of the lease which in paragraph 2 of the agreement was made a part thereof in this: "that the lessor (Altomont Creamery, Inc.), or its assignee, did furnish light, water, power or refrigeration, as provided in paragraph 4 of said lease." Paragraph 2 of the agreement refers only to the agreement not to engage in the business of selling ice-cream within the limits of Palo Alto for a period contemporaneous with a certain lease entered into between the parties and "to which said lease reference is hereby specifically made." The agreement, it seems, refers to the lease for but one purpose — to fix the term during which respondent's assignor should not engage in the ice-cream business in Palo Alto. Where reference is made in a contract to another writing for a specified purpose, such writing becomes a part of the contract for such purpose only (Moreing
v. Webber,
This disposes of the questions raised by appellant's specifications of error, and from what has been said it follows that the judgment should be and it is affirmed.
Tyler, P.J., and Cashin, J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on July 3, 1929, and a petition by appellant to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court, on August 1, 1929.
All the Justices present concurred. *280