Douglas v. Bergere

VALLÉE, J.

Appeal by plaintiff from a judgment for defendants in an action for damages for the alleged breach of an oral contract to deliver shares of stock to plaintiff.

Douglas Oil & Refining Company is a corporation. Pursuant to a preorganization agreement between appellant Douglas, respondents and one Stratton, 110,000 of its common shares were issued to respondents Bergere and Andrews, 55,000 shares to each. The stock is called “nickel stock” as it was purchased at 5 cents a share. The corporation needed additional funds. About November 1, 1941, appellant and Stratton on the one hand, and Bergere and Andrews on the other, made an oral contract whereby Douglas and Stratton agreed to assist in raising the additional funds, and Bergere and Andrews agreed to transfer 55,000 shares of the nickel stock to them. Douglas claims Bergere and Andrews jointly and severally agreed to transfer 55,000 shares of nickel stock to himself and Stratton. Respondents claim the contract was several and that it was agreed Bergere was to transfer 27,500 shares of nickel stock to Stratton and Andrews was to transfer

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27,500 shares of nickel stock to Douglas. Douglas and Stratton performed and the additional funds were secured. Thereafter Bergere transferred 27,500 shares of nickel stock to Stratton and Andrews transferred 13,252 shares of nickel stock and 14,248 shares standing in the name of Comet Oil Company, Ltd., to Douglas. Comet was a limited partnership, of which Andrews was sole- general partner.

Comet was adjudicated bankrupt about one month after the transfers to Douglas. Andrews was adjudicated bankrupt about five months later. The bankruptcy proceedings were consolidated. The trustee instituted proceedings against Douglas to recover the stock delivered to Douglas by Andrews or its value. A compromise was effected between the trustee and Douglas, which was approved by the bankruptcy court, by which the 14,248 shares transferred by Andrews to Douglas were transferred by Douglas to the trustee and the proceedings instituted by the trustee dismissed with prejudice.

The complaint sought recovery of damages for the alleged refusal of Bergere and Andrews to transfer 14,248 shares of nickel stock to Douglas. The court found that: Stratton was agent for Douglas; the contract was several; Bergere agreed to and did transfer 27,500 shares of nickel stock to Stratton; Andrews agreed to transfer 27,500 shares of nickel stock to Douglas; Andrews, pursuant to instructions of Stratton as agent of Douglas, and pursuant to agreement between Douglas and Stratton, transferred to Douglas 13,252 shares of nickel stock and 14,248 shares standing in the name of others, but which had arisen out of the 55,000 nickel shares belonging to Andrews, and which were the subject of the original contract; Bergere and Andrews performed all covenants and conditions of the contract.