Case Name: Smythe et al. v. Prescott, Merrill, Turben & Co.
Court: Montgomery County Court of Common Pleas
Jurisdiction: Ohio
Decision Date: 1969-06-25
Citations: 21 Ohio Misc. 154
Docket Number: No. 132220
Parties: Smythe et al. v. Prescott, Merrill, Turben & Co.
Judges: 
Reporter: Ohio Miscellaneous Reports
Volume: 21
Pages: 154–162

Head Matter:
Smythe et al. v. Prescott, Merrill, Turben & Co.
[Cite as Smythe v. Prescott, Merrill, Turben & Co. 21 Ohio Misc. 154.]
(No. 132220
Decided June 25, 1969.)
Common Pleas Court of Montgomery County.
Messrs. Boesch <& Boesch, for plaintiffs.
Messrs. Smith & Schnacke, for defendant.

Opinion:
Martin, J.
This cause comes before the court on the motion of defendant for judgment notwithstanding the jury verdict finding in favor of plaintiffs on the facts, and on the merits.
A jury was heretofore impaneled for the limited and specific purpose of determining from the facts in evidence whether plaintiffs' account or defendant's account of the transaction is established by a preponderance of the evidence.
Plaintiffs claim they purchased 300 shares of United Engineering & Foundry Company common stock for $7,800, with directions to defendant to convert said stock into the stock, convertible debenture bonds and cash of Wean Industries, Inc.; that plaintiffs did purchase 300 shares of United Engineering & Foundry Company stock, but received the equivalent of 30 shares of United Engineering & Foundry stock exchanged for Wean Industries, Inc., common stock, convertible debenture bonds and cash, and 270 shares of United Engineering & Foundry stock.
Plaintiffs claim, therefore, that defendant under the original contract should be required to deliver to plaintiffs the number of shares, convertible debenture bonds and the amount of cash of Wean Industries, Inc., that were exchangeable for 270 shares of United Engineering & Foundry stock on and before March 7,1968.
Defendant admits that plaintiffs placed an order for 300 shares of United Engineering & Foundry Company common stock on March 5,1968, and that plaintiffs received from defendant certificates for 270 shares of United En gineering & Foundry Company stock, 12 shares of Wean Industries, Inc., $400 of Wean Industries, Inc., convertible debenture bonds and cash in the amount of $342.52. Defendant denies that it received instructions from plaintiffs to convert the 300 shares of United Engineering & Foundry Company stock into the equivalent Wean Industries, Inc., stock, debenture bonds and cash.
Defendant claims that plaintiffs were notified by written statement dated March 29, 1968, that it held for plaintiffs 300 shares of United Engineering & Foundry Company stock received March 12, 1968; that plaintiffs failed to object to such statement, and that by reason thereof they have waived any and all claims asserted by them in this action and are estopped from asserting the same because of their laches.
Defendant claims that the equivalent number and value of Wean Industries, Inc., stock, convertible debenture bonds and cash exchangeable for 30 shares of United Engineering & Foundry Company stock were credited to plaintiffs' account by mistake.
The question of fact as to the terms and provisions of the contract between plaintiffs and defendant entered into on March 5, 1968, was decided in favor of plaintiffs by jury verdict, concurred in by eleven of the twelve jurors.
Defendant's motion for judgment notwithstanding the jury verdict is based upon four main contentions:
First, that the rules and regulations of the New York Stock Exchange were a part of the contract, that plaintiffs were not required to pay for the 300 shares of United Engineering & Foundry Company stock until the fifth business day after March 5, 1968, which was March 12, 1968, and which was five days after the final date that United Engineering & Foundry Company stock was exchangeable for Wean Industries, Inc., stock, convertible bonds and cash, and that therefore performance by defendant of plaintiffs' order was impossible.
One of the best known and most followed maxims of equity is that equity looks upon that as done which should have been done. Sine© the jury by its verdict found that Maynard Horton undertook not only to procure the 300 shares of United Engineering & Foundry Company stock, but also undertook to exchange said stock for Wean Industries securities and cash, he and defendant were under a duty, if defendant was not willing to extend credit to plaintiffs to March 12, 1968, to inform plaiutiffs that such exchange could only be effected by a cash transaction to be executed forthwith on March 5, 1968. Since the evidence fails to show that any such advice or notice was transmitted to plaintiffs immediately on March 5 following confirmation of the purchase of the United Engineering & Foundry Company stock, it is reasonable to infer that defendant's broker, through his statement accepting such responsibility without qualification, was willing on behalf of defendant to extend credit to plaiutiffs and to make the exchange of stock forthwith or on or before March 7,1968.
We are of the opinion that the rules and regulations of the New York Stock Exchange applicable to the type of transaction in this cas© were not a part of the contract between the parties, as the defeüdants have failed to produce the original order, or a true copy thereof setting forth any such provision. Under the facts of this case it was not impossible for defendant to make the conversion, as defendant had at least two days to complete the conversion after receiving confirmation of the purchase of 300 shares of United Engineering & Foundry Company stock.
Thomas v. Guarantee Title & Trust Co., 81 Ohio St. 432, Syl. 2 and 3; Van Leunen Co. v. Meddock, 16 Ohio App. 309, Syl. 3; Metropolitan Bank & Trust Co. v. Newcomb & Jenkins, 2 Ohio App. 56.
Second, defendant contends in support of its motion for judgment notwithstanding the verdict, that such transaction is barred by Section 1308.30, Revised Code (Statute of Frauds).
Defendant assumes in urging this ground that the original order, which defendant claims was destroyed and was not introduced in evidence, did not contain instructions to convert United Engineering & Foundry Company stock into Wean Industries securities and cash. In view of the evidence in the case, and the verdict of the jury, we are required to assume that the original and/or carbon copy of the order written on March 5, 1968, was both an order for 300 shares of United Engineering & Foundry Company stock and an order to convert the same into Wean Industries securities and cash. Although defendant attempted to explain the exchange of 30 shares of United Engineering & Foundry Company stock into Wean Industries securities and cash on the ground of mistake, we believe that it is likely that the jury found that the original order called for the conversion of the entire 300 shares, and that some employee of, defendant mistakenly converted 30 shares instead of 300 shares.
In view of the entries on the monthly invoices introduced in evidence, and the facts hereinbefore recited, we are of the opinion that Section 1308.30, Revised Code (Statute of Frauds), does not apply to the transaction in issue in this case, and that plaintiffs are not precluded under the circumstances from proving the entire terms of the contract.
Davis Laundry & Cleaning Co. v. Whitmore, 92 Ohio St. 44, Syl. 3; Janchor v. Cerkvenik, 35 Ohio App. 519, Syl. 1 and 4; Cooper v. Cooper, 8 Ohio Dec. 35, Syl. 1, 2, 3 and 4.
With relation to defendant's third ground as to why judgment should be entered for the defendant, to the effect that plaintiffs are estopped from obtaining specific performance of the oral contract, the defendant urges first, that plaintiffs had available an adequate remedy at law; second, that they are guilty of laches or unreasonable delay in asserting their rights; and third, that there is a lack of mutuality of obligation and remedy between the parties.
With relation to defendant's claim that plaintiffs should have filed a civil action for damages, and that a recovery thereof would be adequate to compensate plaintiffs for their loss, if any, we are of the opinion that plaintiffs' decision to purchase United Engineering & Foundry Company stock and exchange the same for Wean Industries securities and cash, was prompted by a conviction that their investment at that particular time, to wit, March 5, 1968, with the exchange involved, was desirable from their individual point of view, and that an investment on their part in either company under circumstances in which no exchange of securities and cash was available might not have been desirable. Such an exchange situation could not be duplicated on the general market, as such an opportunity presented itself very seldom. Furthermore, because of the time element involved in filing a civil action, and the lapse of time between the filing thereof, the final judgment therein, and the payment thereof, is so uncertain that plaintiffs, by being relegated to a civil action for damages, would be required to speculate on whether or not and to what extent the amount of a judgment would adequately compensate him as compared with the then value of Wean Industries securities and cash.
Under such circumstances we do not feel that plaintiffs had an adequate remedy at law available.
Hager v. Reed, 11 Ohio St. 626, Syl. 3; Iron Railroad Co. v. Fink, 41 Ohio St. 321, Syl. 1; In re Consolidated Factors Corp., 46 F. 2d 561; 49 Ohio Jurisprudence 2d, Specific Performance, Section 66.
With relation to defendant's claim that plaintiffs were guilty of laches, the evidence fails to show that they received notice from defendant on the March, April and May monthly statements that the defendant would refuse to honor their claim that they were entitled to Wean Industries securities and cash in exchange for the 300 shares of United Engineering & Foundry Company stock. The April and May monthly statements indicate that 30 shares of United Engineering & Foundry Company stock had been exchanged for Wean Industries stock, convertible debentures and cash, with 270 shares of United Engineering & Foundry Company stock remaining in the account. It was not until the June 28 statement for the month of June, was received by 'the plaintiff, Richard L. Smythe on or about July 1, that he was aware that there was held in plaintiffs' account 270 shares of United Engineering & Foundry Company stock without any reference to Wean Industries securities and cash, whereupon plaintiff, Richard L. Smythe called the Cleveland office of defendant and complained that he had not received Wean Industries securities and cash in exchange for the 270 shares of United Engineering & Foundry stock, and that the June statement made no reference to Wean Industries securities. That after the Cleveland office of defendant informed plaintiff, Richard L. Smythe, that they would look into the matter he talked to them again by telephone and was finally informed that the defendant would do nothing further than had been done, after which, within about one month, plaintiffs filed their petition in this action. Therefore, we do not believe that plaintiffs delayed notifying defendants of their complaint an unreasonable period of time, but rather, on the contrary, they acted promptly after receiving information of the defendant's refusal to complete the transaction. Harris v. Wallace Manufacturing Co., 84 Ohio St. 104.
With relation to the third reason in support of the third ground of defendant's motion, to wit, lack of mutuality of obligation and remedy, defendant claims that it would have no right to compel plaintiffs to accept Wean securities in lieu of United Engineering & Foundry Company shares because the confirmation notice and the monthly statements do not disclose such an obligation to plaintiffs. Suffice it to say that these typewritten statements and notices are not the original contract set forth on the original order, but are entirely secondary instruments. Consequently, the argument that there is a lack of mutuality of obligation and remedy does not apply to the fact situation in this case. Davis Laundry & Cleaning Co. v. Whitmore, 92 Ohio St. 44, Syl. 2.
With relation to the fourth branch of defendant's motion for judgment notwithstanding the verdict, to wit, that the verdict of the jury as a matter of law is contrary to the evidence and the pleadings, — defendant urges first that there was no meeting of the minds of the parties disclosed by the evidence, and second, assuming that there was a meeting of the minds on the conversion that there was no consideration to support the promise to convert.
With relation to the first reason in support of the fourth branch of defendant's motion, we are of the opinion that the jury verdict in this case finding on the facts in favor of the plaintiffs necessarily included their finding by a preponderance of the evidence that there was a meeting of the minds between the parties on both the purchase of 300 shares of United Engineering & Foundry Company stock and the conversion of such shares into Wean Industries securities and cash.
With relation to the second reason urged in support of the fourth branch claiming insufficient evidence to support the verdict of the jury, we are of the opinion that plaintiffs' obligation to pay the sum of $7,800 for 300 shares of United Engineering & Foundry stock, and the payment thereof, plus the brokerage commission of $96.00, was a sufficient valuable consideration to support the undertaking by defendant to convert United Engineering & Foundry Company shares into Wean Industries securities and cash.
The evidence fails to show that it was impossible for defendant to convert United Engineering & Foundry Company shares into Wean Industries, but on the contrary, the evidence shows that the defendant had at least two days to make the conversion.
Since equity looks upon that as done which ought to have been done, we are of the opinion that the defendant should be required to fulfil the terms of its contract with plaintiffs, upon plaintiffs tendering 270 shares of United Engineering & Foundry Company shares to defendant, plus dividends received, by acquiring in plaintiffs' names and transferring to them, in addition to what plaintiffs have already received, the equivalent of 270 shares of United Engineering & Foundry Company stock in Wean Industries securities and cash. More specifically, defendant will be required to deliver to plaintiffs upon plaintiffs' tender to defendant of 270 shares of United Engineering & Foundry stock, 108 shares of Wean Industries common stock and dividends thereon subsequent to March 5,1968, convertible debenture bonds in the amount of $4,050 in Wean Industries, Inc., and interest paid thereon from and since March 5, 1968, together with cash in the amount of $2,632.50, with interest thereon from March 5,1968.
Judgment for plaintiffs.
Entry Dismissing Appeal
(September 8,1969)
Martin, J. The defendant, having requested the court to dismiss its appeal, it is hereby ordered and decreed that the appeal of the defendant, Prescott, Merrill, Turben & Co., shall be, and hereby is, dismissed.
Release op Judgment
(September 8,1969)
Martin, J. The judgment rendered in the above entitled action on the 25th day of June, 1969, in favor of the plaintiffs and against the defendant having been fully paid and satisfied, receipt of which is hereby acknowledged by the plaintiffs, the said judgment is hereby released and discharged this 8th day of September, 1969.
Costs of this action are taxed against the defendant.