Court Opinion

ID: 3468383
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:35:20.865393+00
Date Added: 2024-06-11T14:08:05.114779
License: Public Domain

My opinion is that plaintiff is entitled to a fair compensation based upon the stockholders' equity in the American Bank  Trust Company at the time of the consolidation. The board of directors of that bank, on March 16, 1922, adopted the following resolution, viz:
  "Whereas, the proposed merger between the American Bank  Trust Company and the Liberty Bank  Trust Company was initiated through the efforts of Mr. Harold W. Newman, who brought the officers of the respective institutions together and suggested a basis of agreement; and
"Whereas, as a result of his efforts, this merger has been approved by this board of directors and will probably be approved by the stockholders of this bank; and
"Whereas, `the laborer is worthy of his hire' *Page 821 
and a basis of 3 per cent. on the admitted stockholders' equity in each bank at the time of consolidation has been suggested and agreed upon as fair: Be it therefore
  "Resolved that at the time of consolidation a reserve be set aside to cover this brokerage, which, upon the presently agreed basis, will be 3 per cent. on $214,285.71, or $6,428.57, and that this amount shall be due and payable to Mr. Newman upon demand when and after the presently proposed consolidation between the American and Liberty Banks shall have been ratified by the stockholders and shall have been consummated."
It is true that the memorandum agreement submitted by Mr. Newman and accepted by resolution of the board of directors of the American Bank  Trust Company on the 16th of March, 1922, is not the agreement that was finally carried out; and Mr. Newman is therefore not entitled to recover under a contract; but we must bear in mind that he is suing on a quantum meruit. According to my judgment, the proposed merger "initiated" by Mr. Newman as broker was not finally abandoned, but, aided by the financial failure of Shepard  Gluck, resulted in the merger that was eventually consummated.