102 Wash. 248 | Wash. | 1918
The plaintiff, Woldson, commenced this action in the superior court for Spokane county, seeking specific performance of a contract entered into with
Appellant is a corporation organized and existing under the laws of the state of Washington, having its principal place of business in Spokane. In August, 1916, appellant owned and was engaged in developing and operating its mine known as “The Richmond Mine,” which mine, it may be assumed, it has continued to own and operate ever since. On August 15, 1916, appellant had in its treasury some 300,000 shares of its capital stock which it was holding in trust for its stockholders. This stock was placed at the disposal of the officers of the corporation with a view to selling it as might become necessary to raise funds to defray the cost of the development of the mine. A by-law of the company authorized its board of directors to sell this stock as in their judgment the best interests of the company might require, at not less than ten cents per share. On August 15,1916, the company had developed
“The matter of financing the further development of the company’s property was discussed, and on motion it was resolved.
“Resolved, That an option on one hundred thousand shares of the treasury stock of the company be given to Martin Wolds on at the rate of ten cents per share, to be taken and paid for in such sums and amounts as may be required in the prosecution of the work of the development of the company’s property, Martin Wold-son to have the right to throw up said option at any time on reasonable notice so as not to leave this company in debt for any work contracted. Stock to be issued as each payment is made at the rate of ten cents per share.”
At that time respondent was a member of the board, and was also the president of the company. This resolution was adopted, however, by the vote of the other members of the board and without the necessity of respondent’s vote, in so far as its lawful adoption was concerned. This was done, however, in response to an offer made by respondent to purchase 100,000 shares at ten cents per share to further the development work of the mine and to complete such purchase from time to time as stated in the resolution. Respondent thereupon orally agreed to the terms of the resolution as evidencing a contract between himself and the company. Immediately thereafter the respondent became the general manager of the company and its affairs,
About two weeks following the entering into of this contract, work was done in the mine rendering it evident that there was valuable ore uncovered such as would be profitable to’ mine and market. Thereupon, instead of pursuing development work, respondent caused the work to be changed to that of mining, shipping and marketing the ore. This was pursued under respondent’s management of the mine with such success that the indebtedness owing at the time of entering into contract with respondent was paid off, together with all indebtedness incurred in the mining and marketing of ore, all of which was paid wholly from the proceeds of the ore so mined. It thereupon became apparent that no money was needed from other sources in order to make the mine a profitable working mine. At the beginning of September, 1916, this condition of the mine became so apparent that the market value of the shares of stock of the company was at least twenty-five cents per share, and a short • time thereafter increased very much more in market value. About this time respondent ceased to be president and manager of the company, and thereafter, on December 6, 1916, respondent tendered to the company $10,000 as the purchase price of the sale to him of the stock mentioned in the contract evidenced by the resolution of August 15, 1916, and demanded the delivery of the whole of the 100,000 shares of stock, then claiming the right thereto under that contract. This demand the officers of the company refused to comply with, the board adopting a resolution in effect declaring that it was under no further obligation under the contract made with respondent on August 15,1916. Up to that time neither the corporation nor any one representing it ever made any demand upon respondent to complete
This, it seems to us, is one of those cases which finds, its correct determination in a plain statement of its controlling facts and has little need of argument to demonstrate what the rights of the parties are in the premises. This was not a contract for an outright, unconditional sale of stock by the company to respondent, but it was plainly a conditional sale to be consummated in part or in whole as the need for raising funds to prosecute the development of its mine might arise; nor was it an option open to acceptance by the respondent for an unlimited time in the future, though there
The judgment is reversed and the action dismissed. Appellant mining company shall recover costs in this court.
Ellis, C. J., Mount, Holcomb, and Chadwick, JJ., concur.