Guth v. Elliott

Digges, J., delivered the opinion of the Court. This case was tried by a jury in the Court of Common Pleas of Baltimore City and resulted in a judgment for the appellee. The appeal is from this judgment. The record contains three exceptions, the first two being to rulings on testimony, and the third to the court’s action in granting the single prayer offered by the plaintiff.

The facts necessary to be stated for a clear understanding of the case are substantially these: The plaintiff was employed by the Mavis Bottling Company of America, the defendant being the president of that company up until July 18th, 1928. Under date of May 2nd, 1928, the plaintiff received the following letter from the defendant: “J. M. Elliott, Esq., Baltimore, Md. Dear Sir: I am handing you herewith a copy of the Syndicate Agreement with reference to the stock of the Mavis Bottling Company of America, wherein it is set forth that I am entitled to a participation of ten thousand ²⁴⁶ (10.000) shares of said stock, upon the terms and conditions as stipulated therein. I agree that out of my participation of ten thousand (10,000) shares you are hereby given an interest in such participation to the extent of one-tentli thereof, amounting to one thousand (1.000) shares, and that you shall receive the profits, or assume the losses, according to such proportionate interest, and further subject to all the terms and conditions of said Syndicate Agreement. In consideration of the interest hereby given to you in my participation; I shall be pleased to receive from you reimbursement in the sum of one thousand ($1,000) dollars, representing one-tenth of the call of ten thousand dollars made upon me as a member of said syndicate.

Will you kindly write your acceptance upon the copy hereof and retain for yourself the original enclosed? Yours very truly, Charles G. Guth. “I have read over the foregoing and I hereby accept the same upon the terms and conditions hereinabove set forth. J. M. Elliott.” This letter contained duplicate copies of the syndicate agreement therein referred to, signed by Math. C. Brush, syndicate manager; which agreement is: “Mr. O. G. Guth, Mavis Bottling Co. of America, Candler Building, Baltimore, Md. Dear Sir: I hereby confirm our understanding that you agree to participate in a joint account with others, including myself, with respect to the purchases by reason of existing options or otherwise and/or sale of stock of the Mavis Bottling Company of America, a Delaware corporation.

The maximum number of shares which -¿he account may hold at any one time is 125,000 shares. Your proportion of the account will be 8% or 10,000 shares, you agreeing to advance in Hew York funds your pro rata shares of the purchase price as and when called for by me. Orders with respect to said account are to be entered by me in my uncontrolled discretion. Complete information as to purchases and sales will be available at any time to any participant upon appli ²⁴⁷ cation to me.

Said joint account is to extend for a period not to exceed six months from the date hereof, but I at any time may require in my uncontrolled discretion each participant to take and pay for his pro rata of any unsold balance of said stock remaining in the account. Nothing herein contained shall be construed in any way as constituting the several partid- j pants partners with me or with one another; and eachj participant shall only be liable in an amount equal to' his own participation, except that any losses by this joint account through the failure of any participant to carry out his obligation hereunder shall be charged as a loss to such account, but shall not operate to relieve any other participant from his liability hereunder; and participants will share pro rata in the not profits and net losses of this account after allowing for all expenses,, as to all of which my written statement shall be conclusive on all participants. Please confirm such understanding by signing the subjoined acceptance on the duplicate hereof and return same to me with your check of $10,000,. Very truly yours, (Signed) Math.

C. Brush, Syndicate Manager. P. S.: Kindly sign and return duplicate participation agreement in enclosed envelope. I hereby agree to the foregoing.” The testimony of the plaintiff is that he accepted the offer made in the defendant’s letter of May 2nd, signed the original letter at the bottom, and also two- copies of the syndicate agreement, retained the original letter and one copy of the syndicate agreement, and delivered the other two* papers personally to the defendant in the defendant’s office in Baltimore City within one or two days after the receipt of the letter; that at the time of the delivery of these papers the plaintiff told the defendant that he did not have $1,000 to' put up at the time, hut did have, $550 in cash and could give his note for the balance of $450; whereupon the defendant said: “Forget about it, Jim, I am putting that money up for you. This is one of the things I have been telling you about T am doing; don’t you worry about the thousand dollars that you ²⁴⁸ are supposed to put up yourself; that doesn’t even enter into it; that is only for those people I have included in it that must put the money up, because I am taking other people into this syndicate.” That at the time of this conversation the ^plaintiff was receiving as compensation a salary of $100 a week, which salary was known to the defendant; that from that time on the defendant never requested him to. pay the «$1,000; that he was in a position to pay it had he been requested to do so.

The plaintiff further testified to a number of other conversations had with the defendant, in which the defendant acknowledged tire plaintiff’s position as a participant in the syndicate; and testimony to like effect, or tending to prove what the plaintiff had testified to, was given by other witnesses, including Hr. Pearson, the person who .succeeded the defendant as president of the company. Evidence was offered on behalf of the plaintiff to prove that the profits arising out of the syndicate to the holder of each 1,000 shares was $3,777.38, and this was admitted as ■.a fact by the defendant. The defendant concedes that the offer to the plaintiff to participate in the syndicate was made by him, but denies that it was ever accepted by the plaintiff.

Testimony of other witnesses on behalf of the defendant, to like effect, was given. Thus the testimony on behalf of the plaintiff on one side, and by the defendant and his witnesses on the other, is in direct and sharp conflict and presented a typical jury question. This conflict was resolved by the jury in favor of the plaintiff, and is a question with the decision of which, under the record here presented, this court has nothing to do. The offer by the defendant to the plaintiff being conceded, the question for the jury was whether such offer had been accepted by the plaintiff in such manner as to constitute a legally binding contract between the parties.

There can be no doubt, if the evidence given by the plaintiff and the witnesses on his behalf was true, that such a contract was formed; and the jury by its verdict found such evidence to be true. The condition of the offer was the payment by the ²⁴⁹ plaintiff of $1,000, but if, in compliance with this provision of the offer, the plaintiff proposed to- the defendant to make settlement of this amount by paying $550 in cash and giving his note for $450, and at such time the defendant waived the payment and told the defendant he did not have to make payment of the $1,000, hut without doing so was a member of the syndicate, and never thereafter called upon the plaintifl for such payment, although the plaintiff was willing and able to comply with such demand, if made, the plaintiff would be entitled to the pro- rata profits due to the owner of 1,000 shares of stock from the operations of the syndicate. Idle first exception arose in the following manner. During the examination in chief of the plaintiff, after some testimony which the record shows in narrative form, this occurred: “Q. Who was present at this first discussion about an increase of salary, besides yourself and the president ?

A. It wasn’t a question of increase in salary. It was a question of the stock bonus that was to be given to the various employees. Q. Oh, pardon me. Well, who- was present at that time?

A. Mr. Elwell, Mr. Hoffman — — (Mr. Poe, Sr.) : I object. I do not see that this is relevant to the case.. The point is whether or not he agreed to take a participation in a syndicate with Mr. Guth. (The Court) : Isn’t he telling that now?

(Mr. Poe, Sr.): Wo, sir; he is talking now about stock bonuses, and the right'of the employees to have an opportunity to participate in a syndicate. Wow, we are-concerned here with a syndicate that they claimed in the opening statement was actually participated in. (The Court): Isn’t, that the alleged agreement he is now talking about ?. (Mr. Poe, Sr.): Wo, sir; that was way back in December.

We are not disputing that opportunity was given him to participate; the question is whether he did participate; that’s all. (The Court): Well, I imagined he was commencing to describe- (The Witness) : It is the condition leading up to this. (Mr. Kosenbush) : Go ahead. (The Witness) : Well, as I say, Mr. Elwell, Mr. Hoffman and myself- (The Court) : Wothing in writing about that?

(Mr. JEto-senbush): ²⁵⁰ Hot at all, not at all.