Sherman v. Herr

220 Pa. 420 | Pa. | 1908

Opinion by

Mr. Justice Mestrezat,

The court below found the following contract to have been entered into by the parties : “ Ray T. Sherman, the plaintiff, and R. F. Herr, the defendant, on August 20, 1906, mutually and verbally agreed with each other- to procure by purchase the 150 shares of stock of A. G-. Stauffer and the 150 shares of stock of W. A. Wengert in said Calcite Quarry Company for their mutual benefit, the purchase to be made by either of them, as opportunity might offer, and after being so purchased the said shares were to be equally divided between them, each paying one-half of the purchase price.”

There was ample evidence before the court to support this finding. At least three disinterested -witnesses in addition to the plaintiff and the admissions of the defendant sustain the contract as found by the court. The responsive answer of the defendant to the bill was, therefore, overcome by the testimony on the part of the plaintiff. In fact, the defendant’s own admissions when on the witness stand tend to contradict his answer filed to the plaintiff’s bill. The learned judge was clearly right in finding the contract to be as he has stated it in his opinion.

There was no lack of mutuality in the contract. Sherman and Herr agreed to buy the 300 shares of stock owned by Stauffer and Wengert, and divide the shares between them. Either party was to make the purchase as opportunity might offer, and each was to pay one-half of the purchase price. The contract was, therefore, mutual, and the mutual promises constitute a valuable consideration and make the contract valid : Berger’s Appeal, 96 Pa. 443 ; Fitzsimmons v. Lindsay, 205 Pa. 79 ; 23 Cyclopedia of Law and Procedure, 452.

The contract between the parties contemplated the purchase of the Stauffer and Wengert stock and its division equally between the plaintiff and the defendant. It is true there was no specific price fixed by the parties in their agreement at which the stock was to be purchased. This, however, was not necessary to the validity of the contract. The stock was to be purchased for the mutual benefit of the parties, and either was authorized to make the purchase whenever there was a favorable opportunity. The price at which the purchase was made fixed the price which the one making the purchase was to receive from the other party. The main and important feature of the agreement was the purchase of the stock, both parties being willing to pay the price at which it could be obtained. Each party, therefore, was unrestricted as to the price he should pay the owner of the stock, and the other party was bound to accept it at the price at which, in good faith, the purchase was made. Either party making the purchase had the right to enforce contribution from the other for the one-half of the money expended to obtain the stock. The contract as to price, therefore, is capable of being made certain, and hence the maxim id certum est quod cerium reddi potest is applicable.

¥e have no doubt as to the right of the plaintiff to have specific performance of the contract. It appears from the findings of the court that the stock is not procurable in the market and its pecuniary value is not readily ascertainable. It further appears that the stock is of peculiar value to the plaintiff in order that he may obtain a proper and legitimate control over the management of the corporation. In such cases, the court will require the party to specifically perform the contract and deliver the stock: 26 Am. & Eng. Ency. of Law (2d ed.), 122; Leach v. Fobes (Mass.), 71 Am. Dec. 732 ; Cushman v. Thayer Manufacturing Jewelry Company (N. Y.), 32 Am. Rep. 316; Bumgardner v. Leavitt (W. Va.), 12 L. R. A. 776. Under such circumstances, the injured party would sustain irreparable injury and adequate relief could not be given by an action at law. Equity would, therefore, afford him relief : Northern Central Railway Company v. Walworth, 193 Pa. 207; Goodwin Company’s Appeal, 117 Pa. 514; New England Trust Company v. Abbott, 162 Mass. 148.

The contract entered into by the parties required them to act in the utmost good faith towards each other in purchasing the stock. Each acted for the other as well as himself. Equity, therefore, will not permit the purchaser to hold the stock which was purchased for the other party. A party purchasing stock under the circumstances of this case becomes a trustee and holds it for the other party in the joint venture: 23 Cyclopedia of Law and Procedure, 455. He is a trustee ex maleficio for the plaintiff and as such is required to account to the plaintiff for the one-half of the stock he purchased: Kennedy v. McCloskey, 170 Pa. 354; Fairlamb v. Hempshire, 7 W. N. C. 92. Confidence was reposed by the plaintiff and defendant in each other in entering into the .contract to make the purchase of this stock, and justice forbids that it shall be abused: Rankin v. Porter, 7 Watts, 387.

It is argued by the defendant’s counsel that the plaintiff is not entitled to relief in equity because it would violate the agreement between the original subscribers which provides that in case any of them might desire' to sell their stock they shall first offer it to the remaining subscribers who should have the option to buy. That argument, however, overlooks the fact that there are only three of the original stockholders owning stock at this time, two besides the plaintiff; and that these two stockholders have by their action in selling their stock to other parties waived their right to insist upon the enforcement of the agreement between the original stockholders. There are, therefore, none of the present owners of the stock who are in a position to assert his right to enforce the agreement between the original stockholders to buy the stock of anyone who desired to sell.

Under the facts found by the court below, which are amply supported by the evidence, the plaintiff is entitled to the relief he seeks in the bill filed in this case, and, therefore, the decree is affirmed.