Reed v. Reed

Ueker, J., delivered the opinion of the Court. The appellant, James S. Reed, is the father of James R. Reed, the appellee. On February 1st, 1932, they entered into the written agreement which is sought to be specifically enforced in this suit. The agreement began with the following recitals: “Whereas James S. Reed is the owner of all of the issued capital stock of the J. S. Reed Piano Company of Baltimore City, State of Maryland, save and except two (2) shares which are owned by James R. Reed, and “Whereas the said James S. Reed is desirous of securing for himself and for the J. S. Reed Piano Company the services of James R. Reed, providing an equitable arrangement for the services already rendered by James R. Reed to the J. S. Reed Piano Company and to James S. Reed, and “Whereas the said James S. Reed and James R. Reed are about to enter into a contract of employment with the J. S. Reed Piano Company, a body corporate.” The recitals were followed by these stipulations: “1.

That the parties shall retain their respective amounts of capital stock of the J. S. Reed Piano Company, which they now hold, provided, however, that James S. Reed agrees that he shall retain the stock in the J. S. Reed Piano Company, and shall not sell the same except by and with the consent of James R. Reed, nor cause to be issued any additional capital stock in the J. S. Reed Piano Company, except with the consent of the said James R. Reed. “2. That any dividends on the stock held by J ames S. Reed and James R. Reed shall be pooled and divided equally between them, whenever either of the parties hereto so desires, and it at any time it shall be determined by James S. Reed that the business is being conducted unprofitably, and that it is deemed ad ⁶⁰⁶ visable in his judgment to liquidate said corporation, known as the J. S. Reed Piano Company, same shall be done and the profits, assets and accumulated surplus shall be divided equally between James S. Reed and James R. Reed. “3. That upon the death of James S. Reed, James R. Reed shall receive all of the capital stock of the J. S. Reed Piano Company then owned by James S. Reed, and this agreement shall be considered an authorization and direction to the personal representatives of the said James S. Reed to forthwith assign on the books of the corporation and by delivery of the .stock certificate, the said stock unto James R. Reed, and the said James S. Reed has this day assigned the shares of capital stock owned by him in the J. S. Reed Piano Company to Richard E. Preece, Trustee, with the power to said Trustee, upon the death of the said James S. Reed to transfer and convey his capital stock in the J. S. Reed Piano Company to James R. Reed. “4. James R. Reed agrees to remain in the service of the J. S. Reed Piano Company, so long as same shall continue to be a corporation, and that he will pool the dividends of his stock with that of James S. Reed. “5.

And it is further agreed by James S. Reed and . James R. Reed that each will annually or from time to time renew their contract of employment with the J. S. Reed Piano Company for a salary of not less than Seventy-five ($75.00) Dollars a week and that neither party hereto shall be paid as a salary by the J. S. Reed Piano Company a greater sum than Seventy-five ($75.00) Dollars per week. “6. It is agreed by James S. Reed and James R. Reed that the J. S. Reed Piano Company shall make no lease for salesrooms and shops for a greater rental than Eive Hundred ($500.00) Dollars per month, except by the mutual agreement of both parties hereto.” About a year after the execution of the agreement, this suit in equity was brought by James R. Reed for the purpose of enforcing the provision in regard to the transfer and de ⁶⁰⁷ posit in trust of the shares of stock owned by James R. Reed in the J. S. Reed Piano Company. The amended bill of complaint, after summarizing the agreement, alleged that since its execution the defendant had failed to assign his