Fred B. Grinnell Co. v. Stanton

197 P. 28, 115 Wash. 230, 1921 Wash. LEXIS 731
CourtWashington Supreme Court
DecidedApril 4, 1921
DocketNo. 16115
StatusPublished
Cited by2 cases

This text of 197 P. 28 (Fred B. Grinnell Co. v. Stanton) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fred B. Grinnell Co. v. Stanton, 197 P. 28, 115 Wash. 230, 1921 Wash. LEXIS 731 (Wash. 1921).

Opinion

Main, J.

This action was brought to recover the balance of a commission alleged to he due the plaintiff [231]*231the Fred B. Grinnell Company, as a broker, upon .the sale of certain corporate stock. In the answer, the defendant denied liability and plead affirmatively a settlement. In reply to the affirmative defense, the plaintiffs alleged that the settlement was induced by false and fraudulent representations. Upon the issues thus framed, the cause came on for trial and resulted in findings of fact, conclusions of law and a judgment sustaining the right of the plaintiffs to recover. From the judgment thus entered, the defendant appeals. The facts may be stated as follows:

The respondent, Fred B. Grinnell Company, is a~ corporation organized and existing under the laws of the state of Washington, and is engaged in the brokerage business in the city of Spokane. The E. H. Stanton Company was a corporation engaged in conducting a packing house business at Spokane. The appellant, E. H. Stanton, was the president and sole manager of the E. H. Stanton Company. In the spring of 1917, the Fred B. Grinnell Company caused a representative of that company to inquire of Armour & Company, engaged in the packing business at Chicago and other points, whether that company would be interested in acquiring the E. H. Stanton Company plants and received a reply that the Armour Company was interested. Soon after this and on May 8,1917, the following writing was made and delivered to the Grinnell Company:

“Spokane, Wash., May 8th, 1917. “Fred B. Grinnell, Esq., Spokane, Washington.
“Dear Sir: Begarding situation of which we have been talking today beg to say the situation is about as follows:
• “The capital stock is $600,000 being 6,000 shares par value $100 per share, plant $300,000 (cash $600,000). . Stock on hand $800,000; book accounts $300,000. Total [232]*232assets $1,400,000. Liabilities $285,000. I own or control 50841/3 shares of the capital stock and hereby give you .an option and agree to deliver the same to you at any time on or before fifteen days from today upon the payment to me in cash of $220 per share. Also understood will give you whatever means that are necessary within this time for investigation of entire situation. I further agree to pay you (2) two per cent commission for selling stock of E. H. Stanton Co.
“E. H. Stanton.
“Witness:
“Bobert W. Grinnéll.”

While this letter is addressed to F. B. Grinnell, its purpose was to secure the services of the Grinnell company as a broker. No further reference will be made to F. B. Grinnell as a party to the action, but the party plaintiff and respondent will be referred to as the F. B. Grinnell Company. The letter sent out is in the form of an option and concludes with an agreement to pay two per cent commission for selling the stock of the E. H. Stanton Company. The option feature was to continue for a period of fifteen days. Within a very few days after this letter was signed, the respondent caused representatives of the Armour Company to come to Spokane for the purpose of looking over the E. H. Stanton plant. When they arrived they were met at the train by representatives of the Grinnell Company, the transaction was talked over with them and they then were taken to the packing plant and introduced to the appellant, E. H. Stanton.

From this point on Stanton conducted negotiations, having suggested to the representative of the Grinnell Company that that was the better procedure to follow. The negotiations lasted for some days, and within the limit of time specified in the contract, Armour & Company purchased of the stock of E. H. Stanton & Com[233]*233pany a total of 4613 1/3 shares. Of this stock so purchased, Stanton and fa,mily owned 2,420 2/3 shares, Hamilton 1,096 1/3 shares, Hample 1,0961/3 shares, and Mrs. Armstrong, or the Armstrong estate, 33 shares. Hamilton and Hample received for their stock from Armour & Company $200 per share. Stanton received for the stock owned by himself and family $220 per share and $20 per share upon the stock of each Hamilton and Hample. Some days after the sale of this stock was consummated, a representative of the respondent company took up with the appellant the matter of the commission. At this time the appellant represented that he had sold his stock for $200 per share and that Hamilton and Hample had refused to bear any part of the commission. Relying upon these representations, the respondent was induced to accept as a commission the sum of $12,500. Subsequently that company learned that Armour & Company had paid $220 per share for the stock which it had received, and brought this action to recover the balance of the commission alleged to be due it based upon that purchase price.

In the appellant’s brief, the first question is stated to be, in what amount, if at all, was the appellant indebted to the respondent on account of the purchase of the stock by Armour & Company? The answer to this question depends upon two things: The appellant claims that he received only $200 per share for his stock and that the extra $20 per share upon his own, as well as upon the stock of Hamilton and Hample, was to compensate him for an agreement with Armour & Company when the transaction was closed, to the effect that for a period of ten years he would not engage in the meat business in the states of Washington, Ore[234]*234gon, Idaho and Montana, for his guarantee' of the book accounts of the Stanton Company, and, for a further agreement, to give such portion of his time as Armour & Company should require for one year in the management of the business. The other consideration, which is vital in determining the answer to the question, is whether the sale of the Hamilton and Hanrple stock was conducted by the appellant or by themselves, the appellant’s position being that they made their own sale. Upon the question as to whether the extra $20 per share was made for the purpose claimed by the appellant, the court found that Armour & Company was ready, able and willing to purchase the stock of the Stanton Company for the sum of $220 per share and that it did purchase the stock, including that of Hamilton and Hample, for that price. The trial court found

“.that the sum in excess of $200 a share which was paid to the defendant Stanton and his family for the stock in the E. H. Stanton Company owned by them was not paid in consideration of the agreement of the defendant Stanton not to engage in the meat-packing business in Montana, Oregon, Idaho or Washington for a period of ten years from the date of the sale, the guarantee of accounts receivable of E. H. Stanton Company by the defendant Stanton, and the agreement of the defendant Stanton to hold himself in readiness to assist Armour & Company in the management of the business for some time after the sale if Armour & Company should request him to do so. I find that these collateral agreements of the defendant were merely details in the terms of the sale which were agreed upon between the defendant and Armour & Company and that defendant was ready and willing to agree to such terms in.

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Cite This Page — Counsel Stack

Bluebook (online)
197 P. 28, 115 Wash. 230, 1921 Wash. LEXIS 731, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fred-b-grinnell-co-v-stanton-wash-1921.