Carlton v. Sevin-Vincent Seed Co.

THE COURT.

Respondent purchased from the appellant corporation 4,500 shares of its preferred stock under an agreement which he claims was subsequently breached by the corporation; thereupon he rescinded the transaction and brought this action to recover the amount paid for the stock. Judgment was entered in his favor, and the corporation appeals.

The corporation was organized in June, 1928, for the purpose of acquiring a business operated by its president, J. R. Walsh. The latter’s wife was the treasurer of the corporation, his brother was secretary, and the three constituted the board of directors. In June, 1929, the corporation advertised in a newspaper for a

“

bookkeeper for secretaryship”. Continuing, the advertisement read: “ . . . successful moderate-sized wholesale firm; invest $5000; salary $225 and share profits. Reply in detail to Box 15,560 . . . ” Respondent, being a man of some business experience, having been employed by another corporation for several years as bookkeeper and paymaster, and later for some ten years as representative on the Pacific Coast for the United States Shipping Board, responded to said advertisement, and after

[224]

several conferences with Walsh, and in June, 1929, the corporation entered into the agreement with respondent, which is the basis of this action. With respect thereto the trial court found that respondent agreed to purchase from the corporation 4,500 shares of its preferred and 500 shares of its common stock for $5,000, but that “as a condition precedent to and a further consideration for the purchase of said stock” it was agreed that respondent would be made a director and the secretary of the corporation and should “receive immediate and continuing employment” with the corporation, for which he was to be paid a monthly salary of $225; that if at any time said employment should cease or be terminated said corporation would return to him the money he had paid for said stock. Continuing, the court found that in part performance of said agreement respondent paid to the corporation $1,000 on July 3, 1929, and $3,500 on July 9, 1929, for which he received 4,500 shares of preferred stock; that in partial compliance with said agreement the corporation employed respondent for a period of five months, and paid him therefor $225 a month, but that at the end of said period of time, to wit, on December 9, 1929, “without reasonable or any cause, provocation or excuse ’ ’ the corporation wrongfully dismissed respondent from its employ and thereafter refused to give him employment of any kind. Furthermore, the court found that respondent was not made a director or the secretary of said corporation, although respondent frequently requested that such action be taken, as agreed; that he offered and at all times was ready to pay the additional $500 for the common stock, as agreed, but that such payment was waived by said corporation; that all of the other conditions respondent agreed to perform were performed by him. The court also found that upon the breach of said agreement by said corporation and on January 2, 1930, respondent tendered the corporation the stock theretofore delivered to him, together with the full amount of dividends received by him thereon from the date of the delivery of the stock to him, and made demand for the return to him of said sum of $4,500; but that the corporation refused to accept the return of the stock or to repay to respondent any portion of said purchase money.