Evans v. Buchanan

Bailey, J., delivered the opinion of the Court. This is an appeal by the administrators of the estate. of John C. Niner from a decree of the Circuit Court for Baltimore City directing the administrators to endorse and deliver to Beth Lee Buchanan and George M. Downs, the appellees, all the outstanding stock of The J. C. Niner Company, a Maryland corporation. The decree was entered in a suit filed by the appellees against George A. Evans and Daisy V. Niner, the said administrators, for the specific performance of an alleged oral contract entered into by them with John C. Niner in 1927. The facts in the case are, for the most part, undisputed.

John C. Niner had been employed for many years by the American Type Founders Company, a company dealing in printers’ supplies. In the summer of 1927 he was holding the position of sales manager of the company in Baltimore. Niner, who was then 49 years old, became dissatisfied when the son of the local manager of the company was promoted to assistant manager. Miss Buchanan, one of the appellees, then 34 ⁴⁶⁶ years of age, had been employed by the American Type Founders Company as cashier for two years, and her roommate, a Miss Campbell; was employed by the Moore Machinery Company, which was using the same office.

Miss Buchanan and Miss Campbell were friends of Niner and of his wife, Daisy V. Niner. He often talked with them about his disappointment in not being promoted to assistant manager. As Niner is now dead and Miss Buchanan is incompetent to testify as to any transactions with or statements made by him, because of the provisions of Section 3, Article 35, Code 1939, we have only the testimony of 'Miss Campbell as to this and subsequent conversations between Niner and Miss Buchanan. Miss Campbell’s testimony is substantially as follows: that on one occasion, when the three of them were at lunch together and the matter was discussed, Miss Buchanan said, “why don’t you go into business for yourself?” that Niner stopped a few minutes and said, “I couldn’t do it, I couldn’t do it,” explaining that, with one exception, no independent company had ever been able to compete successfully with the American Type Founders Company; that the matter was the subject of continual discussion; that “it seemed to form a germ and it kept growing” with the result that desks, typewriter, telephone books and other equipment were moved into the apartment occupied by Miss Buchanan and Miss Campbell; that Niner would come to the apartment in the evening and stay until about nine o’clock, working with Miss Buchanan over the correspondence; that an office was selected at 16 South Gay Street and second hand office equipment was purchased; that Niner had $5,000 which he agreed to put in the business which was to be called The J. C. Niner Company; that Miss Buchanan agreed to leave the American Type Founders Company and work with the new business at the same salary which she was then receiving; that Niner was to be the salesman and Miss Buchanan was to keep the books and attend to the general office work, but that some one would ⁴⁶⁷ be needed to look after the stock on the shelves and to get out the orders; that George M. Downs, one of the appellees, then 28 years old, was employed by the American Type Founders Company as a stock room clerk and inside salesman, and that Niner thought of him for this position; that Downs was invited in July or August to meet Niner, Miss Buchanan and the witness at dinner at the Refectory Lunch Room, at which time he was asked to join in the venture.

The witness, Miss Campbell, was asked what Niner said to Downs at that time and her reply was as follows: “Mr. Niner told him they were starting in as an independent, he told him the pros and cons, he told him it would be a venture; no other, with the exception of one company, had been able to exist, the American Type had put them out of business, it was a gamble. He told Mr. Downs what his work would be, which was pretty nearly everything that might be done in an office, as well as selling. He said ‘you are giving up a good job, a job you will be in until you die, probably for something that is uncertain’, but he said ‘George, I want you to think it over, I want you to corne with us. If you do come with us and stick, the business will be yours and Beth’s when I die’, and he said ‘it will be yours, lock, stock and barrel’.” Miss Campbell was then asked if Miss Buchanan made any statement as to whether or not she was coming into the proposition when Niner put it to Downs and her answer was: “Oh, yes, yes definitely.

Miss Buchanan was coming in — or, not only was, but had; they had worked out these plans together.” Thereafter, in November, 1927, the business was opened on Gay Street, with Miss Buchanan and Downs operating the office and stock room and with Niner soliciting business as outside salesman. On January 2, 1928, The J. C. Niner Company was incorporated, the assets of the business were transferred to the corporation and sixty shares of the capital stock of the par value of §5100 per share were issued in the name of Niner. On December 14, 1934, a stock dividend of ninety shares was de ⁴⁶⁸ dared and issued to Niner. On December 28, 1939, the two stock certificates, for sixty and ninety shares, respectively, were surrendered and in exchange therefor Niner was issued five certificates for thirty shares each.

Niner died on October 27, 1943, intestate, leaving surviving him his widow and certain collateral relatives. At the time of his death The J. C. Niner Company had an approximate net worth of $29,000. Niner left other assets in the approximate amount of $60,000, which passed to his widow as the surviving joint owner. Downs and.

Miss Buchanan were still employed by The J. C. Niner Company at the time of Niner’s death. In addition to the testimony of Miss Campbell relative to the formation of the contract, the appellees produced seven business acquaintances of Niner, wholly disinterested witnesses, who testified to statements made by Niner, from the time of the founding of the business in 1927 until shortly before his death in 1943, confirming the formation and existence of the agreement sought to be enforced. We deem it unnecessary to give a detailed recital and analysis of this testimony. The testimony of J. B. Thomson is typical.

He was a partner of the ShaneBeever Company, manufacturers of electrotype and print plates, and an intimate friend of Niner. His testimony is as follows: “1 dropped in late in the afternoon and we got to talking shop, and it was at that time — I couldn’t even tell you the date — that he referred to business conditions. They had been pretty good, and we sort of had something in common in connection with the subject, because my former senior partners had done the same thing that he referred to in the case of Miss Buchanan and Mr. Downs. And he said — he used to call me Tommy —he said', ‘Tommy, I have done pretty well; I don’t need a whole lot of money, my wife is amply taken care of; the business after I die will go to Mr. Downs and Miss Buchanan’, * * * and.

I mentioned I thought that was very fine for those who had helped him build the business; and he said, ‘Mrs. Niner will not have to worry, ⁴⁶⁹ and these two have helped me build it, and when I die there will be plenty for her’.” In further corroboration of the agreement the appellees proved that on May 24,1928, Niner assigned to Miss Buchanan the certificate for 60 shares of stock issued to him at the time of the incorporation of the company. At the same time he procured a life insurance policy for $5,000, the amount of his investment in the company, naming his wife as beneficiary therein. The premiums on this policy were always paid by the company. On April 8, 1935, the certificate for 90 shares, issued to him on December 17, 1934, was likewise assigned to Miss Buchanan.

His signature was witnessed by Arthur Leaf. Leaf’s testimony is significant. He was asked if there was any discussion on Niner’s part as to the transaction, and his reply was as follows: “At that time he say, ‘now, this is one step in the arrangement I have. George and Beth are to have this business as theirs when I am gone’.

He says, ‘Daze’ — that is Daisy, his wife, — ‘don’t want anything to do with this business because she don’t know a printing press from anything else in the country. This is to be George and Miss Buchanan’s business’.” As opposed to this testimony the appellants lay great stress upon the testimony to the effect that on December 28,1939, Niner requested Miss Buchanan to return to him the two stock certificates which had been assigned to her by him; that the said certificates were surrendered and cancelled; that in exchange therefor five new certificates for thirty shares each were issued and delivered to Niner; and that they were never assigned by him but were still in his name at his death. They likewise insist that the conduct and statements of Miss Buchanan subsequent to the death of Niner are inconsistent with the present claim of the appellees. At a meeting held at the office of the company on November 8, 1943, about two weeks, after Niner died, attended by Evans, one of the administrators, his counsel,