Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1861-01-23

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pany, for the purpose of exploring and mining for
copper and other ores" &c
Afterwards on the 18th Of August, 1865, Gilbert
conveyed his interest under the purchase from
Hereear to the Isabella Conner Ccrnnanv. and ssld
company in all things, placed itself in the shoes of
Gilbert AID became bound to Henegar by new
guarantee that 1.-THE ten thousand shares of stock
in said company win be worth at least five dollars
per share. in three years from the 21st Of July
1855 and if not worth that much by the expiration
of said three years, that said company viii make
good and pay over the deficiency to the said Hene-
gar or his assigns The former guarantee Of Gil
bert was surrendered ks
A'certifcate of ten thousand shares of the stock
was issued and delivered to Henegar, who trans
ferred two-thrds Of the stock to others retaining
to himself 1883 shares thereof. M
After the expiration of the period of three years
namely, on the 25th of September. 1856, Hsnegar
filed his BILL the substantial part Of which is that
his stock in said company remained unsold, for the
reason that it had net been within the three years
nor was at the time Of the fling of the bill of any
market value.
The answer of the company denies that the stock
was of no value in the market within the three
wears limited by the contract, and AYERS that con-
siderable sales of the stock of the company had
been made in the city of New York within the
three wears, at $3.50 per share and upwards and
that one thousand shares hid been sold at 50 on per
share, and these ayerDeRts are sustained by proof
said stock was not in demand at any time within the
three years or SINCE and that in the Tennessee mar
ket il would not command more than from Is to 90
cents per share and that but little could be sold
at this reduced price.
The bill seeks to hold the company liable for the
full amount of five dollars per share for the stock
upon the presumption that in Tennessee, the place
of the contract the stock was really of no value IN
the market at the expiration of the period Of three
years, or at least that the company shall make up
II, doll cha and
the merely nominal value of the stock in the Ten
nessee market at the expiration of the three years
1t appears that the corporators of the Isabella
Copper Company were residents of New York, and
that the Office of the company there.
For the complainant, it is insisted that, by the
proper construction of the guarantee, the time for
ascertanment of the value of the stock the day
of the expiration of the period limited and the place
| the Tennessee market.
On the other hand, 1t is maintained that the val
of the stock is to be determined by the price at
which selling might have been sold in the
principal stock markets in the Un0n, if not of the
world. And the proof shows that the city OF
New York is the chief market for such stock in this
country insisted that the utmost the complainant
can be entitled to. is the difference between i've dol
lars per share, and the highest price at which
the stock was sold or might have sold in the New
York market at any time within the limited periodt
and not the reduced price at which it was selling
the expiration of that period
1t will be by comparing the guarantee of Gil
bert with that subsequently given by the company
that there is verbal difference, at least between
them
BY the former it is stipulated that If the stock
shall fail to be worth FIVE dollars per share within
! said time, then he, Gilbert, shall make good the
same" l.--.-
But in the latter guarantee it is provided that if
the stock shall not be worth five dollars per share
q by the expiration of the said three years. the
said company q will make good and pay over the
deficiency to said Heneoar &c.
The latter stipulation, though not probably so va
| RANT in meaning the former, is more explicit,
and establishes that the proper time for determn-
ing the market value of the stock is at the 'expira
tom Of the three years from the date of the con-
tract and not any indefinite tim. within that period
The reservation of so long time was obviously for
| the benefit of the company. But with this advant-
| age on the partof the latter, the risk was taken
upon ITSELF that the stock should be worth the price
| fixed upon not merely within the three years, but
| at the expiration of that time.
| 1t is certainly true that the complainant might
| have sold his stock at any time within the period
! limited but he was not bound to do especially at
less price than i've dollars per share It is clear
! that if he had voluntarily sold within the three
years at less than five dollars, il would have been
at the peril thaf the price advanced to five dollars
within that time, the guarantor would be discharg
/ ed and the complainant must have borne the
| loss
| The complainant was not bound to foresee the
state of the market the end of the three years;
the hazard TO that matter was deyolyed not upon
| him, but upon the company He was safe in re-
posing his guarantee, that, at all events his stock
would be worth five dollars per share to him at the
expiration of the limited period irrespective Of its
| value in the market. Whether or not, in the event
the price of the stock had advanced to Eve dollars
| at any time within the three years. the company
could have shifted the risk of the market upon
the complainant, by requesting him to avail
| himself of the then market value, nesd not
| inquire. Possibly it would be held that the
complainant had the right under the terms of the
guarantee to hold on to his stock in the expecta-
ton that its value might advance above five dollars
/ by the expiration Of the limited time-hGvinC as
1 surance, by the terms of the guarantee, that 1t
would be worth to him at least that price, in any
| event, The whole thing a mere speculation.
AT the time of the contract, the stock had no fixed,
perhaps, intrinsic value; and it depended mat
| tiers of chance whether IL would ever be of any
! value. The future development of rich minerals
upon the land, and the rage for speculation might,
in the ola few years, give it high value,
the bubble might burst and the stock prove utterly
| valueless. f
| This hazard was known to the parties and in view
! of it, the company stipulated for such period of
time thought would be amply sufficient TO
test the extent and vslueOf the minerals, and also
| advance the stock to fair value in the market
| 1t is very clear that the company had the whole
period of three years to make the experiment, and
if at the close though it the very last day, the
stock CHANGED 10 De of the value o. four dollars per
] snare, LnelP guaranty would nave ESeQ
And, as the operation of the contract must be mu-
tual it is no less clear that the complainant could
not be compelled to dispose of his stock before the
end of the term fixed on because by possibility, at
the time it might have advanced beyond i've dol
| lars.
But in the next place, we think the value of the
stock. the end of the three years, is not to be
| regulated BY the demand value in the home mar
ket; but by its value at that time in the usual mar
| ket {or such stocks in any of the States of the
Union or even in foreign markets, if in the course
! Of dealing in such stocks foreign markets were re-
sorted for the sale thereof BY spectators of this
| country. -
| 1t cannot be supposed that the parties intended to
| regulate the value of the stock by market in
/ which there was little or no demand for it. They
must be taken men of ordinary common sense, TO
have intended that the stocks if sold, should be of
! fcred in the best market, matter where. And by
the same criterion the value must be fixed in the
| sta'e of the case presented in the record.
The result of our opinion is, thai the measure of
compensation to which the complainant is entitled,
is the difference between five dollars and the cur
rent value of the stock Immediately the expira
ton of the three years. in the best market for the
| sale of this and similar stocks in this country in
foreign country according to the ordinary course
| of dealings in such stocks.
| Decree affirmed. MCkINNEY.sz
A true copy Testa CIV. NELsoS, Clerk.
TENNESSEE LEGISLATURE.