Donner v. Alford

136 F. 750, 69 C.C.A. 402, 1905 U.S. App. LEXIS 4511
CourtCourt of Appeals for the Third Circuit
DecidedJanuary 18, 1905
DocketNo. 11
StatusPublished
Cited by7 cases

This text of 136 F. 750 (Donner v. Alford) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Donner v. Alford, 136 F. 750, 69 C.C.A. 402, 1905 U.S. App. LEXIS 4511 (3d Cir. 1905).

Opinion

GRAY, Circuit Judge.

The suit in the court below, in which the defendant in error was plaintiff, was brought to recover damages upon two distinct claims, both for the violation of contract on the part of the defendant, the plaintiff in error. Eor reasons appearing in the record, we are not here concerned. with the first of these claims. The other claim, as set forth in the declaration, is substantially as follows: In 1901, Donner, the defendant below, was president of the Union Steel Company, a corporation organized under the laws of Pennsylvania, and in the fall of 1901, a movement was entered upon for the consolidation of the Union Steel Company with the Sharon Steel Compan}’-, another corporation existing under the laws of Pennsylvania. In November, 1901, the officers of the two companies held a meeting in New York, with a view of consolidating the two companies. After the meeting had practically ended, without a prospect of bringing about a consolidation of the two companies, the defendant below, Donner, met Alford, the plaintiff below, who owned 280 shares of the Sharon Steel Company stock, but was not an officer of said company. It appears that Donner and Alford were well acquainted with each other, and the declaration alleges that Donner, in order to secure the assistance of Alford, in bringing about the consolidation of said companies, and upon condition that he use his influence and lend his assistance to secure such consolidation, offered to furnish him, in case said companies were consolidated, sufficient stock in the consolidated company, to make his holdings equivalent to the amount he would receive in the proposed consolidated company, if he owned 1,000 shares of Sharon Steel Company stock, and the said Alford was to pay defendant for such stock at the rate of $175 per share for the 720 shares requisite to accomplish this result. The declaration alleges that the plaintiff accepted this proposition, and, in order to have the offer confirmed in writing, wrote defendant, on November 26, 1901, a letter which was produced and proved at the trial, as follows:

“W. H. Donner, Esq. — My Dear Friend Donner: I have been thinking about, your deal since I have talked to you. There are some parties bade of Sharon Steel and liable to come to the front at any time and which I am not at liberty to mention. I know that it is the thing to do to join the two companies. It is the opportunity of a young man’s life, and you can bring this whole thing around if you will. I have talked with Mr. Darr, and I know that he is willing to do what is fair and right if he can be made to see it. When I [752]*752left him I told him if I was wanted to telegraph me, and I say the same to you, if I can be of any service telegraph me. My understanding of your proposition or offer to me is that if a consolidation is formed of the Union Steel Company and the Sharon Steel Company, that you will furnish me stock in the Consolidated Co. equal to what Sharon Steel Co. stock per share would' get whatever that may be on the basis of $175. per share for Sharon Steel1 Co. stock, to an amount of 720 shares of Sharon Steel stock. Or in other words, I now hold 280 shares of Sharon Steel Co. stock costing $175. per share, and if the consolidation goes you will see that I get stock in the Consolidated Company to an amount equal or as though I held 1,000 shares of Sharon Steel Co. stock and I pay you for same $175. per share (720 shares at $175. will be $126,000.00). Of course this is strictly confidential. I have not even given it to the stenographer. Please acknowledge if this be your understanding. I will send you those lists if you want. Now if there is anything you want me to do let me know and I’ll be glad to do it. There are great advantages to be gained in this consolidation which you can never realize until you have felt and seen the benefits. I hope to become associated with you and think that I can become a benefit to you with what little experience I have had.
“Yours sincerely, [Signed] W. J. Alford.”

In due course of mail, the following answer was received from the defendant: •

“Pittsburgh, Pa, 11 — 27, ’01.
“W. J. Alford, Anderson, Ind. — Dear Sir: Your letter of the 26th to hand. Will state that your understanding of offer I made you on stock is O. K. and is strictly between ourselves.
“Yours, etc. [Signed] W. H. Donner.”

The plaintiff alleges in his declaration that, from that time forward, he lent his aid and influence in every possible way, to bring about the consolidation of said companies, and the proofs disclosed in the record show that plaintiff recommended the consolidation to the Sharon Steel Company, and to that end had frequent interviews with Darr, the president of the Sharon Steel Company, in whose office he had for a time a desk. There were q,o official meetings, between the officers of the two companies, between November, 1901, and November, 1902. In August or September, 1902, plaintiff sailed for Europe in company with Darr. He testifies that during that trip across the ocean, they discussed the question of consolidation. Upon his return from Europe, in the fall of 1902, Darr, the president of the Sharon Steel Company, took up the question with the officials of the Union Steel Company, and spent sometime in going over their properties, and finally laid before the directors a plan for the consolidation of the two companies. On the 7th of November, 1902, plaintiff testifies that, in company with Darr, he went to Pittsburg, for the purpose of assisting in bringing about the consolidation of the two companies, and offered his services to that end. On the 21st day of November, 1902, an agreement of consolidation was entered into between the two companies.

It was proved by the defendant, that in the interval between November, 1901, when the negotiations for consolidation were attempted and failed, and November, 1902, when a consolidation was effected, a great change had taken place in the situation of both companies. The Sharon Steel Company had increased its capital stock from five to six millions. It had sold $1,250,000 bonds of the Sharon Coke Company, one of its constituent companies; it had added largely to its plants; it had increased its net earnings about [753]*753$1,500,000; it had thoroughly explored its ore property,, and,-without buying any additional property, had demonstrated that there was sufficient ore in the property to make, it worth $5,000,000, although the property cost them but $250,000, an4 in November, 1901, they only asked $2,000,000 for it. The Union .Steel Company had also greatly expanded; had acquired large amounts of coal lands, and developed and purchased ore properties worth more than $5,000,000; had acquired two ore vessels, at a cost .of $600,000, and was building a railroad, so as to transport its coal and coke from its property to its plants. It also had acquired very valuable harbor terminal property on Lake Erie, with the right to build an independent line of railroad from Lake Erie to the location of their plants.

The contention of Donner, the defendant below, was that this agreement with Alford was confined wholly and exclusively to the effort that was then being made by the parties at the T901 conference, and that it had no reference to any future deal.

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Cite This Page — Counsel Stack

Bluebook (online)
136 F. 750, 69 C.C.A. 402, 1905 U.S. App. LEXIS 4511, Counsel Stack Legal Research, https://law.counselstack.com/opinion/donner-v-alford-ca3-1905.