Home/Idaho Supreme Court/Anderson v. Lloyd

Anderson v. Lloyd

139 P.2d 244, 64 Idaho 768, 1943 Ida. LEXIS 47
CourtIdaho Supreme Court
DecidedMay 22, 1943
DocketNo. 7048.
StatusPublished
Cited by5 cases

This text of 139 P.2d 244 (Anderson v. Lloyd) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anderson v. Lloyd, 139 P.2d 244, 64 Idaho 768, 1943 Ida. LEXIS 47 (Idaho 1943).

Opinions

GIVENS, J.

In 1921, E. E. Bascom, Joe Hull, and respondent each contributed $2,000 and formed a tri-party partnership, which purchased the bottling works, including a Coca Cola franchise, from Benoit & Sons, in Twin Falls. Later in the year appellant purchased Hull’s interest. Bascom sold his share to appellant and respondent in 1929, repurchasing after a few months, and finally sold his share to respondent in 1936.

In 1931 appellant and respondent, retaining their respective one-third and two-thirds interests therein, converted the partnership into two corporations — to avoid partnership liability and to comply with the restrictions of the parent Coca Cola company prohibiting the sale of both fountain and bottled Coca Cola by one concern. Appellant acquiesced and participated in such transmutation and is in no position to upbraid respondent on account thereof, as he does.

In December, 1938, respondent purchased appellant’s stock for $25,000, paying part down, the balance to be paid in installments secured by pledge of the stock, with the privilege of substituting other security.

In June, 1940, respondent sold the corporation for $200,- *772 000 to Tyrus Cobb of baseball fame and requested the certificates of stock, offering to pay the balance due or substitute therefor other commensurate security. Appellant, learning of the sale to Cobb, rescinded the contract and refused to deliver the stock on the ground he had been overreached and deceived by appellant in that his stock was worth $50,000 at the time of the sale, tendered the amount received by him to date, and offered to deliver the note covering the balance.

Neither side giving way and each rejecting the other’s overtures, respondent, to resolve the resultant impasse, sued to enforce delivery of the stock, tendering payment in full or substitution of adequate security. Appellant countered with answer and cross-complaint, detailing respondent’s duplicity thus:

“That from 1929 respondent was the actual manager of the business and personally directed and' carried it on, was at all times thoroughly acquainted and familiar with all details and value thereof, its Coca Cola franchise, good will, and going concern value, inherent values, earning capacity, and all angles thereof.
“That, on the other hand, appellant did not devote his-whole time and energy to said business, was not actually engaged in managing and operating the same, was not thoroughly acquainted and familiar with it and its value, as was respondent. That for many years prior to December, 1938, he was engaged in other businesses and occupations, part of the time as an employee of the United States, which required his absence from Twin Falls, and by reason thereof and other facts and circumstances was not acquainted with all the facts and circumstances which reflected the true value of the business, nor was he acquainted with the inherent value of the various franchises and rights possessed and owned by it, nor whether the books truly and accurately reflected the value thereof.
“That prior to December, 1938, appellant had trusted and relied implicitly upon respondent in the conduct and management of the business and for all his knowledge as • to the true value thereof, and by reason of said long partnership and business relationship there was a fiduciary relationship existing between appellant as minority stockholder and respondent as majority stockholder, who was sole manager.
“Prior to December, 1938, respondent sought to induce *773 appellant to sell his interest and made, on numerous and diverse occasions, many representations that appellant’s one-third interest was worth considerably less than $25,000, repeatedly intimated and told appellant said business was beset with many troubles, was besieged with competition, and its Coca Cola franchise was no longer of any particular value. Appellant was reluctant and not anxious to sell his interest but relied implicitly and absolutely upon respondent’s representations and statements as to the low value of his share, which representations were made for the purpose of inducing him to sell and were relied upon by him. That said representations were not true and correct; the value of his share was $50,000 or more, as was known to respondent, and appellant was greatly damaged by such representations.
“That at the time of accepting the stock in the reorganized corporation in 1939 appellant was still ignorant of the value of his interest.”

Respondent denied these allegations and interposed as affirmative defenses thereto:

“That during the partnership appellant was acquainted and familiar with the business, its books, assets, amount of business, and was just as familiar with the value thereof as respondent, and had access to and examined the books of the partnership.
“That appellant was elected a director of each of the two corporations and was president until March, 1938, when he become vice president, continuing so until he sold his stock.
“That between November, 1931, and December 5, 1938, appellant attended all stockholders’ and directors’ meetings, was entirely familiar and acquainted with the business operations and assets of said corporation, value of the stock, books, and had access to the latter, and received statements during all said times of the business.”

The court, without a jury, entered judgment in favor of respondent, Avith consequent appeal herein.

The pertinent findings are:

“That between November, 1931, and December 5, 1938, when appellant sold his stock, he attended stockholders’ and directors’ meetings of said corporations, and was familiar with the books and the value of the stock thereof.
“That August 30, 1938, respondent and appellant discussed the sale of the stock and at no time did respondent *774 knowingly and/or fraudulently make any false representations to appellant as to any material facts or material future intentions, did not fail to disclose any facts concerning the value of the stock of which he had personal knowledge; that appellant knew as much about the value of the stock at the time of the sale as respondent; that appellant did not rely upon any representations made by respondent but relied upon his own knowledge and judgment as to the value of the stock; that $25,000 was not. below the fair and reasonable market value of the stock at the time of the sale; that a strained relationship and coolness had arisen between respondent and appellant not later than the March, 1938, annual meeting of the stockholders and directors ; that appellant is and was at all times a man of business experience, and there existed no financial exigencies or other coercive circumstances to induce him to sell his stock, and he was not induced by respondent to sell his stock but was in fact the moving party in bringing about the sale.”

The trial court concluded:

“8.

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Bluebook (online)
139 P.2d 244, 64 Idaho 768, 1943 Ida. LEXIS 47, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anderson-v-lloyd-idaho-1943.