Hyde v. Hagen

STURTEVANT, J. The plaintiffs Alex Hyde and Mae Sewell commenced an action against the defendants P. 0. Hagen, Margery Hagen, his wife, Robert P. Hagen, his son, and Hagens, Inc., to recover damages for an alleged breach of contract. The defendants answered and the action was tried before the trial court sitting without a jury. The court made findings in favor of the plaintiffs and from the judgment entered thereon all of the defendants have appealed.

Prior to August 1, 1940, the defendant P. 0. Hagen was the owner and operating a store in San Mateo. Por a few months prior thereto Mrs. Mae Sewell occupied space in the store and was engaged in selling corsets. Shortly prior to August 1, 1940, Mr. Hagen and Mrs. Sewell commenced conversations regarding the investment by Mrs. Sewell in the business so conducted by the defendant Hagen. In those conversations the matter of opening other stores was mentioned and discussed. Mrs. Sewell advised Mr. Hagen that she had financial backing by the plaintiff Alex Hyde, and at times Mr. Hyde appeared and took part in said conversations. Prior to said conversations Mr. Hagen from time to time wrote down certain memoranda and after-wards the parties met and discussed said memoranda. The first document discussed by them was as follows: “Officers of Corporation would be as follows P. 0. Hagen, Pres. Mae Sewell V. Pres. Robert Hagen Secy. & Treas. Suggested [519]salaries P.O.H. 200.00 pr. mo. Mrs. Sewell 150 Robert No salary until needed. These could be changed as profits would permit. The reason I want Robert in is to train him to be able to take charge of the business in the future and would take him in when we could and when the buying and managing would be too much for one. P.O.H.”

Mr. Hyde was dissatisfied with said document claiming it was incomplete. The parties met later and Mr. Hagen produced a document in words and figures as follows:

“Mr. Hyde Proposed Plan for incorporating—Stock to P. O. Hagen for net worth of present store and good will ($1000) should be about $4500 Mr. Hyde and Mrs. Sewell to subscribe for $4000 to be issued and paid for as needed —Salaries until profits would permit increases P.O.H. 150 Mrs. Sewell 100 Mae Hagen 100. Stock in present store to be taken at cost value (It is practically all new) and fixtures at cost.”

At a later meeting Mr. Hagen produced another document which is as follows:

“Suggested plan for expansion Incorporate (100 shares @ 100 ea. $10,000. Issue stock as follows—Take in San Mateo store in which mds. and fixtures would be about $3500 net.