Preszler v. Dudley

VALLÉE, J.

Appeal by plaintiff from a judgment in his favor for $400 in an action for damages based on an alleged agency to purchase shares of capital stock in a corporation.

Plaintiff is the brother of defendants Alvin Preszler and Helmuth Preszler who were the principals in Concrete Equipment Manufacturing Company, a corporation. Defendants had been operating the business for some time. One of the stockholders in the corporation was Richard Dudley, a brother-in-law of defendant Alvin. Early in 1952 Dudley expressed a desire to defendants to sell his stock and withdraw from the company. Defendants, needing additional help and desiring to keep the corporation in the family, made an offer to plaintiff that if he would devote his time and energies to the business they would help him purchase the stock from Dudley. Defendant Helmuth testified he talked to plaintiff about the latter’s becoming employed by the company, “ [t]hat is the only way that it would be possible for bim to buy the stock.” About March 1952 plaintiff went to work for the corporation. A few days after he started to work plaintiff told defendants he could raise only $600. Defendants told plaintiff they would loan him $2,400 so that he could make the initial down payment of $3,000. Plaintiff told them how he could get the money to repay the $2,400.

On April 2, 1952, Dudley agreed in writing to sell 6,955 shares of his stock to plaintiff for $6,955. Plaintiff’s $600 together with the $2,400 from defendants was given to Dudley by Alvin. The agreement stated that the balance of $3,955, representing 3,955 shares, was to be paid on or before July 2, 1952, without interest “with any balance unpaid after that date to be paid on or before April 2, 1953, with interest

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at the rate of 6% per annum starting July 2, 1952. Transfer of stock to be made after full amount of $6955.00 has been paid.”

In August, 1952, plaintiff told Alvin he intended to quit working for the corporation. Alvin testified he then advised plaintiff that “in the original agreement he [plaintiff] agreed to stay with the company and that we [defendants] had advanced most of the money for his benefit and that if he intended to be part of the company he was going to have to complete this agreement, including working for the company.” Plaintiff then quit working for the company. After plaintiff had quit Helmuth talked to him about returning to work. Plaintiff said he would not work for Alvin; and when Helmuth mentioned the purchase agreement, plaintiff said, “Well, I can’t possibly raise the money.” Later Helmuth stated to plaintiff, “If you don’t pay for that stock we will have to protect our interest that we already have in the stock.” Alvin testified plaintiff never made any effort to complete the agreement to purchase the stock; Dudley was anxious to receive the balance of his money; defendants felt obligated to make the final payment to him; consequently, they felt to protect their own interest in the deal the stock should be registered in their names. In December, 1952, defendants paid Dudley the balance of the purchase price for the stock and received the stock certificates which were taken in their names. In March, 1953, plaintiff telephoned Dudley about paying the balance. Dudley told him he did not know anything about the money plaintiff owed him and that he should contact Alvin.