O'Neill v. Webb

¶1This action is based on a bill in equity to compel defendant to transfer to plaintiff three shares of' stock in the Webb City Ice & Storage Company. The trial court gave plaintiff a decree and defendant appeals.

¶2Statement. It appears that plaintiff commenced the erection of an ice plant in Webb City, Missouri, and had given his notes for $18,000 for machinery to be placed therein. That then the defendant became enlisted in the enterprise and the two entered into a contract, set out in another place,. which, as we understand it, is substantially as follows: reciting that they had organized a corporation named and called the Webb City Ice & Storage Company, that according to the articles of incorporation plaintiff was to have one hundred and seventy-one shares of the stock and defendant one hundred and seventy-six shares;, that the shares had been so issued to each, that defendant had advanced all the money for the building and ground for the plant. It was, therefore, agreed that defendant was to-furnish the money for. the building and ground and to pay the plaintiff’s said notes of $18,000 and save plaintiff harmless thereon; that these payments were to be made out of the profits of the enterprise; if not so made plaintiff was to repay him one half of what the profits lacked of paying. Plaintiff, by the terms of the contract, transferred and assigned to defendant his one hundred and seventy-one shares of the stock in the company upon the condition and express understanding that defendant would reassign them to plaintiff when he, defendant, had been reimbursed for his outlay of money as above referred to. Plaintiff, by the terms of the contract, further agreed to procure a contract with a local water company .(of which he and defendant were the principal stockholders) by which the water company was to-furnish free of charge to the ice company all the water the latter would use for a period of nineteen years. The eon-*4tract further provided that defendant would assign to plaintiff one half of the stock of the ice company as soon as he was reimbursed for the moneys he had paid out as provided for in the contract.

¶3The business seems to have proved a success and defendant having reimbursed himself for moneys advanced, he, before the commencement of this action, reassigned and transferred to plaintiff the one hundred and seventy-one shares which plaintiff had assigned to him. But he refused to assign to plaintiff three additional shares which plaintiff •claims the contract provides for and together with the one hundred and seventy-two shares which he did assign, as just stated, would make plaintiff the owner of one half the stock as contemplated by the contract. This action is to compel •defendant to specifically perform that part of the contract and assign to him the three shares, the number necessary to make plaintiff the owner of one half the stock.

¶4The defendant, while not denying the contract sued on, set up what he alleges was a later one between them and wherebythe first was superseded. The difference between the two consists in the latter omitting the clause as to assigning plaintiff one half the stock. We will dispose of this by stating that this contract was properly regarded by the trial court as an attempted copy of the original with the clause as to the transfer of one half the stock inadvertently omitted.

¶5Defendant in his effort to overturn the decree rendered for plaintiff in the trial court has stated a great many general propositions pertaining to the principles of equity as applied to an action for specific performance. These we do not care to question. "What we shall rule will be within the limits of all the principles stated which can find practical application to the case presented.

¶6*5Specific performance: transfer of stock: influence in management.*4In the first place the relief sought here by plaintiff is *5questioned, viz.: Compelling defendant to transfer to plaintiff three shares of his stock in the corporation so as to make plaintiff an owner of one half of the entire capital stock. It is contended that full relief may be had in damages. We grant that ordinarily specific performance of a contract for the transfer of corporate stock will be denied. But we think this a proper case for the relief asked. It is an exceptional case. It will be noticed that the contract contemplates not merely the transfer to defendant of three shares of stock, but that he shall transfer stock sufficient that plaintiff shall be the owner of one half of the entire stock. The words of the contract are “one half of all the stock” of the corporation.

¶7It so happens, in this case, that added to what stock plaintiff owned and which was retransferred to him by defendant as directed by the contract, it only required the transfer of three more shares to put plaintiff into the ownership of one half of all. But the chief value would not be the money value of. the three shares, but rather the power and influence it would give plaintiff in the management and direction of the corporation. By becoming owner of one half the stock plaintiff would be enabled to check any proposed management of the company’s affairs which he might think was detrimental. And so it appears clear to us that this is not like a case where one should merely seek the compulsory transfer of some, shares of stock, which would only have the effect of putting him into possession and ownership of such shares the loss of which might readily be made good by damages in the shape of the money value of such stock. We think, therefore, that the case is exceptional and that plaintiff has no adequate remedy at law. We are fully justified in this .view by Cook on Stock and Stockholders, sections 337, 338. And we likewise regard the case of Jones *6v. Williams, 139 Mo. 36-38, as an authority in support of the proposition.

¶8Contracts: independent and dependent covenants: different times of performance: consideration. It is however insisted by defendant that the provision in the agreement whereby plaintiff bound himself to furnish a contract on the part of the water works company to the ice company, whereby the former was to furnish water, free of charge, to the latter for nineteen years, was a condition precedent and that plaintiff could not maintain-this action unless he could show that he had obtained such a contract from the water company, before the institution of this action. The facts are that plaintiff did not obtain the contract from the water compan"* before bringing this suit, but did do so-a short time before the hearing of the cause in the trial court.

¶9In our opinion the facts of this case, as demonstrated by the acts of the parties, if not the words of the contract itself, show that furnishing the water contract to the ice company was not regarded as being dependent upon, or as a condition precedent, or concurrent with the transfer of the stock now in question. In such case the courts should not so regard it. Larimore v. Tyler, 88 Mo. 661. Dependence or independence of covenants is generally a question of intention. Freeland v. Mitchell, 8 Mo. 487. The water has been in fact furnished by the water company during the series of years elapsing since the date of the contract. The ice com-.; pany has gone on in business chiefly under the direction of ■ defendant. It has made the profits out of which moneys-advanced by defendant have been repaid to him. He has retransferred to plaintiff the large block of stock aforesaid.', which plaintiff transferred to him and the failure to furnish the free water contract was not considered by defendant in such light as to prevent him from carrying out every provision of his obligation save the one now seeking enforce-*7meat. Besides the words of the contract itself regarding that part of the agreement now sought to be enforced, do not indicate an intention that the transfer of the stock should depend upon the water contract being first furnished. The provision stands alone independent of the water contract. It seems to contemplate only one condition to the transfer and that is, that “as soon as the said company (ice company) or said James O’Neill has paid the said Webb all money so advanced by him as above provided,” he shall assign one half of all the stock. All money has been paid him as provided and therefore the contingency has arisen making it obligatory on defendant to transfer the stock in question. It is true that the undertakings and agreements .'if the two parties as shown by the writing furnished the consideration for their respective undertakings. But it is not always that the consideration of a contract is a precedent condition. So the general rule of law is that where the covenants of the parties are to be performed at different times they are independent. Turner v. Mellier, 59 Mo. 526; Sawyer v. Christian, 40 Mo. App. 295. In this case the water contract was to be furnished immediately, while the stock was to be transferred some time in the future when certain moneys had been refunded out of profits to 'be made.

¶10Again the agreement to obtain the water contract was only a part of the consideration of the contract between these parties, and therefore the agreement to transfer the stock did not depend on the contract. The rule is that where the covenant goes only to a part of the consideration, it is independent. Turner v. Mellier and Sawyer v. Christian, supra.

¶11What we have said in the foregoing substantially disposes of the questions presented. We have not been able to discover any reason for interfering with the decree of . the trial court and hence affirm the judgment.