Case Name: Lincoln C. WHITE, Plaintiff and Respondent, v. WESTERN EMPIRE LIFE INSURANCE COMPANY, a corporation, and A. A. Timpson, Defendants and Appellants
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1960-12-02
Citations: 11 Utah 2d 227
Docket Number: No. 9156
Parties: Lincoln C. WHITE, Plaintiff and Respondent, v. WESTERN EMPIRE LIFE INSURANCE COMPANY, a corporation, and A. A. Timpson, Defendants and Appellants.
Judges: Callister and McDonough, JJ., dissented.
Reporter: Utah Reports, Second Series
Volume: 11
Pages: 227–232

Head Matter:
357 P.2d 483
Lincoln C. WHITE, Plaintiff and Respondent, v. WESTERN EMPIRE LIFE INSURANCE COMPANY, a corporation, and A. A. Timpson, Defendants and Appellants.
No. 9156.
Supreme Court of Utah.
Dec. 2, 1960.
Callister and McDonough, JJ., dissented.
Cotro-Manes & Cotro-Manes, Horace J. Knowlton, Salt Lake City, for appellants.
White, Arnovitz & Smith, Salt Lake City, for respondent.

Opinion:
HENRIOD, Justice.
Appeal from a judgment for plaintiff in a case tried to the court, for breach of a promise to resell defendant's stock theretofore sold by defendant's president to plaintiff. Affirmed with costs to plaintiff.
Negotiations between plaintiff and one Timpson, president of defendant company, culminated in the following letter dated January 3, on defendant's stationery, addressed to plaintiff:
"This is to certify that any stock that you buy from Western Empire Life Insurance Co. at $60 per share will be sold for you after April 1, 1958, for $120 per share less salesman's commission at the going rate. Sincerely, A. A. Timpson, President."
Plaintiff thereupon acquired 60 shares of the defendant's stock.
Timpson had no express authority to resell stock that he may have sold, although he did have express Board of Directors' authority to make the original sale. Defendant urges that the trial court erred in finding 1) that Timpson had authority to bind the company to the alleged contract, 2) that plaintiff received no copy of the prospectus, 3) that the contract was not void as a matter of law, and 4) that plaintiff bought 60, rather than 40 shares.
Canvassing the points on appeal in reverse, there appears to have been sufficient credible evidence in the record to conclude that plaintiff agreed to and did buy 60 shares; that the contract was not void as a matter of law, since, assuming that the contract could be interpreted as one to purchase the corporation's own stock, the court found, on substantial evidence, that it would not impair the assets acquired as consideration for sale of shares, in which event repurchases are exempt from the interdiction against corporate purchase of its own shares; and that plaintiff, who testified that he had not received a prospectus, if believed, justified a finding that he had not seen any prospectus.
Timpson's authority to bind the corporation to a sale of the stock is conceded. Only question is whether he had implied or ostensible authority to bind the corporation to a promise for the resale of the stock if plaintiff requested it after a three-month period. It is significant that the minutes of the Board, January 3, the same day the letter was written, stated:
"A motion was made that the $60 issue now be withdrawn as of Jan. 6, and that Mr. Timpson seek approval to sell another issue at $120. The motion carried unanimously."
This could indicate that the offering price was to be upped to $120, the identical figure Timpson had committed the company to resell plaintiff's shares for three months later. If all this were accomplished, there would be no loss to the company.
It is conceded that if personal property other than stock had been involved, the authorities cited by defendant anent the principal-agent relation would be pertinent. However, sale of securities seems to have been treated differently under those principles. The annotation at 34 A.L.R.2d 515, et seq. points up the majority view that under facts such as we have here, the corporation must accept responsibility for the agreement to resell the securities, on the basis of a binding ostensible authority vested in Timpson. Reference to that annotation is made with approval, and it is unnecessary to, repeat its language in this decision.
WADE, J., concurs.
. The company had a $50,000 surplus.
. Title 16-2-16 (f), Utah Code Annotated 1953.
.The authorities cited by defendant are concerned principally with the sale of types of personal property other than securities.