S. & R. Gas Co. v. Stephens

90 So. 2d 487, 1956 La. App. LEXIS 873
CourtLouisiana Court of Appeal
DecidedOctober 25, 1956
DocketNo. 8559
StatusPublished
Cited by5 cases

This text of 90 So. 2d 487 (S. & R. Gas Co. v. Stephens) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
S. & R. Gas Co. v. Stephens, 90 So. 2d 487, 1956 La. App. LEXIS 873 (La. Ct. App. 1956).

Opinion

HARDY, Judge.

This is a suit seeking the issuance of a permanent injunction against the alleged violation of the restrictive covenant against competition included in an act of sale. The plaintiffs are named as F. (Frank) J. Roberson, the S. & R. Gas Company, Inc., and Campti Butane, Inc. The corporate plaintiffs are engaged in the business of the retail sale of liquefied petroleum gas, butane and propane, in an area comprising some ten or twelve parishes in the northern part of the State of Louisiana. The plaintiff, Roberson, is a stockholder, officer and executive of the said corporations.

The petition named the defendants, against whom the ■ injunctive relief was •prayed, as being Albert L. and John -S. Stephens, father and son, residents of Red River, Parish. ' '

An exception of ho cause and no right of action interposed on behalf of the defendant, John S. Stephens, was overruled. Following trial on the merits there was judgment in favor of defendants rejecting plaintiffs’ demands, from which plaintiffs have appealed.

The facts of the instant case are of primary importance in a consideration of the issues tendered by this appeal, and, accordingly, it is necessary that they be set forth in considerable detail.

It is established that the plaintiff, Frank J. Roberson, and the defendant, Albert L. Stephens, were members of a partnership engaged in the sale of liquefied petroleum gas products with the main office of the enterprise located in the Town of Cou-shatta in Red River Parish. In 1945 these individuals incorporated the business under the corporate name, of S. & R.. Gas Company,- Inc., and each ¡ of the partners became owners of 50% of the stock of the said corporation. In 1948 the same individuals organized Campti Butane, Inc., and again equally divided the stock between them. The same individuals apparently were interested in the organization of a third corporation, the S. & R. Tank Line, Inc., which corporation, however, is' not named a party to this litigation and the operations and interests 'of which have no material bearing upon the case.

From about the year 1948 until November 12, 1954, the defendant, Albert L. Stephens, served as President of the named corporations, and, on the latter date, he was receiving as compensation for his services in such capacity a total salary from the three corporations of slightly less than $18,000 per year. During the same period the plaintiff, Roberson, was the secretary of the corporations and, so far as can be determined from the record, was in charge of sales and operations. At some undisclosed date, but during the year 1954, differences developed between these [490]*490associates which made -desirable the dissolution of their joint business interests. From August until November, 19S4, each of the partners was clearly cognizant of the need to make some disposition of their corporate holdings which would eliminate the unfortunate friction between them, either by sale of the corporations and their business to a third party, or by the sale of the stock of one to the other. Early in the 'month of November, 1954 the defendant,’ Albert L. Stephens, requested the attorney for the corporations, who represents the plaintiffs in this suit, to attempt to procure a buy-or-sell proposal from Roberson. The attorney complied with this request and on November. 10, 1954 he tendered to Albert L. Stephens, on behalf of Frank J. Roberson, a buy-or-sell proposition.

• Under the terms of the offer made by Roberson he agreed to sell his interest in the three corporations to Stephens for a -cash consideration of $120,000; alternatively, Roberson proposed to buy Stephens’ entire stock holdings in the corporations for a cash consideration of $125,000. The 'proposal was made' subject to immediate acceptance.

Under the- terms of the offer made by Roberson, the offeree was presented with three very clear choices. Stephens was at liberty (a) to sell his stock to Roberson for $125,000 cash; or (b) to purchase Roberson’s holdings.in the corporations for the sum of $120,000 cash; or (c) to refuse to buy or sell and await some future resolution of the impasse.

It is noted from Stephens’ testimony that he felt he was handicapped by reason of -the time limitation inasmuch as the offer was tendered about or after the close of banking hours on November 10th immediately preceding a banking holiday on November 11th. While this is true, it is not .shown that Stephens was necessarily prejudiced in any manner or degree. It is evident that the situation had not been one of rapid development, but, as above stated, had been known to both parties for some months. ..There was no compulsion upon Stephens to take any action, and his voluntary decision to sell was the result of the free exercise of his own best judgment under the existing circumstances.

On November 12, 1954 a written agreement was confected, which agreement was duly executed by Albert L. Stephens and F. J. Roberson, the latter appearing both individually and as secretary of the three corporations. The defendant, John S. Stephens, also appeared and executed the agreement as a party thereto for the purpose which is hereinafter particularly set forth in the appropriate contractual provision of the agreement itself.

Under the terms of the agreement and contract of November 12, 1954, Albert L. Stephens sold to F. J. Roberson all of his .stock in the corporations, consisting of 1,-625 shares of the capital stock in the S. & R. Gas Company, Inc., 20 shares of the capital stock of the S. & R. Tank Line, Inc., and 50 shares of the capital stock of Campti Butane, Inc., together with all interests, equities and rights the vendor might have or possess in the three corporations.

Stephens also sold and transferred all his good will for and on behalf of the said corporations. Under the provisions of the agreement all salary commitments in favor of Stephens from the corporations terminated as of the date of the agreement. The consideration provided for the payment of a total sum of $125,000; $10,000 of which was paid contemporaneously with the signing of the agreement, payment of the balance of $115,000 being obligated to be made by Roberson on or before December 1, 1954. As further consideration Roberson obligated himself to procure the release of the vendor, Stephens, from certain specifically named obligations of the corporations represented by negotiable paper personally endorsed by Stephens, in the •aggregate sum of $118,138.90. The agreement further provided that policies of life [491]*491insurance issued upon the parties, Roberson and Stephens, naming . the S. & R. Gas Company, Inc. as beneficiary,' were declared to he the personal property of the named individuals. Under this provision a policy issued upon the life of Albert L. Stephens, having a cash surrender value of $4,050 at the time, was surrendered and delivered to the said Stephens.

The contract contained certain provisions with reference to forfeiture of the agreement, in the event of failure of compliance by Roberson, which are immaterial, in view of the fact that the obligations were timely made and discharged. On or about November 29 or 30, 1954, Roberson fulfilled the contingent provision of the agreement by making payment of the balance due, in cash, and by furnishing complete release of the personal obligations of Albert L. Stephens on the corporate indebtedness above mentioned as having been specified in the agreement.

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Bluebook (online)
90 So. 2d 487, 1956 La. App. LEXIS 873, Counsel Stack Legal Research, https://law.counselstack.com/opinion/s-r-gas-co-v-stephens-lactapp-1956.