Court Opinion

ID: 5323458
Source: CourtListenerOpinion
Date Created: 2022-01-08 04:41:39.271073+00
Date Added: 2024-06-11T08:29:21.718091
License: Public Domain

Martin, J.
This action was brought by the plaintiff to recover the sum of $5,000 because of the alleged breach by the defendant of an agreement under the terms of which the defendant agreed to repurchase 100 shares of stock of the Deal Knitting Mills, Inc., at the par value of $50 per share, within thirty days after a request to do so. After issue was joined on motion of the defendant the court dismissed the complaint. This appeal, from the order dismissing the complaint, requires a consideration of both the complaint and the contract annexed thereto upon which the action is based.
The plaintiff, Edwin B. Hirschberg, was the selling agent for the Deal Knitting Mills, Inc., and the owner of 100 shares of its stock. The defendant Jacques H. Hecht was the president of that corporation. During the month of November, 1926, they entered into an agreement, which was under seal and which, in part, provided as follows:
“ First. The said Jacques H. Hecht hereby agrees to repurchase from the said Edwin B. Hirschberg the said one hundred shares of common stock of Deal Knitting Mills, Inc. at the par value thereof, at any time within thirty days after the said Edwin B. Hirschberg shall request the said Jacques H. Hecht in writing to make such repurchase.
“ Second. The said Edwin B. Hirschberg hereby agrees that the said Jacques H. Hecht shall have the right to repurchase, at the par value thereof, the said one hundred shares of common stopk of Deal Knitting Mills, Inc., at any time within thirty days after the termination of the said Edwin B. Hirschberg’s relations with the said Deal Knitting Mills, Inc., as selling agent thereof; or at any time within thirty days after the death of the said Edwin B. Hirschberg.
*582“ Third. The transfer of the certificate for the said one hundred shares of common stock of Deal Knitting Mills, Inc. shall be subject to this agreement; and, upon the execution hereof, the said certificate shall forthwith be endorsed as follows: ‘ This certificate is subject as to transfer to a certain agreement made between Jacques H. Hecht and Edwin B. Hirschberg, dated November —, 1926/ and said endorsement shall be signed by the said Edwin B. Hirschberg.
“ Fourth. This agreement shall be binding upon and enure to the benefit of the executors, administrators and assigns of the respective parties hereto, provided that no assignment of this agreement shall be made by the said Edwin B. Hirschberg without the written consent of the said Jacques H. Hecht first had and obtained.”
The complaint alleged that in or about the month of November, 1926, the plaintiff and defendant entered into an agreement in writing, pursuant to which the defendant agreed to repurchase from the plaintiff at the par value thereof, 100 shares of the Ileal Knitting Mills, Inc., stock; that at the time of the execution of the agreement the plaintiff was the owner of the stock; that the par value was fifty dollars; that on or about November 3, 1930, the plaintiff duly requested defendant in writing to repurchase the stock; that plaintiff tendered to defendant a certificate for the stock, but defendant failed and refused to repurchase same; that plaintiff is and has at all times been ready, able and willing to perform the agreement on his part and in so far as permitted has duly performed the same; that the defendant has failed and refused to perform his part of the contract to plaintiff’s damage.
The court held that the contract was unenforcible, and in dismissing the complaint cited the case of Hallgarten v. Wolkenstein (204 App. Div. 487) as an authority for the decision. The contract sued upon in that case was not similar to the contract here under consideration. In that case a letter signed by one of the parties, but in no way binding upon the other/was offered to prove the contract. There was no mutuality shown and there was no consideration for the agreement.
In this case the agreement between the parties is signed by both plaintiff and defendant and there is mutuality and consideration. In the first paragraph of the agreement we find the promise sued upon. The defendant agrees to buy the stock within thirty days after a request by plaintiff. In the second paragraph the plaintiff agrees to permit the defendant to repurchase the stock at any time within thirty days after the termination of plaintiff’s services. The parties agree in the fourth paragraph to bind their executors, administrators and assigns by the terms of the contract.
*583The plaintiff necessarily contracted to hold the stock and not to sell it to any one other than the defendant during the period of his employment and for thirty days thereafter and not to assign the contract unless he received the written consent of the defendant. This in itself is a sufficient consideration for the promise of the defendant to repurchase the stock. By the terms of the contract plaintiff was bound to retain this stock and could not dispose of it irrespective of the price he might be able to obtain therefor. The stock might become very valuable and yet plaintiff was prevented from obtaining the benefits of a sale because of the fact that he was obligated to keep the stock intact and be in readiness to sell it to the defendant at any time plaintiff left the employ of the corporation. He was also obliged to keep the stock so that in the event of his death, his estate, which was bound by the contract, would be in a position to perform the contract and deliver the stock to the defendant. Another very important feature was the fact that irrespective of its value, plaintiff was bound to sell the stock at par.
We are of the opinion that the Special Term erred in dismissing the complaint for insufficiency. The plaintiff’s written agreement not to transfer the stock except in accordance with the terms of the contract would alone be a sufficient consideration to support the defendant’s promise to repurchase within thirty days upon a request from plaintiff.
The judgment and order dismissing the complaint should be reversed, with costs, and the motion denied, with ten dollars costs, with leave to the defendant to answer within twenty days upon payment of said costs.
Finch, P. J., and O’Malley, J., concur; Merrell and McAvoy, JJ., dissent and vote for affirmance.