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sonal property, or an existing enterprise or business, of readily ascertainable value, the matter of proving, to a reasonable degree of certainty, the intrinsic value of the shares, presents no insurmountable difficulties and a decree of specific performance will generally be denied.10 If, however, the value of the shares depends upon the commercial value of some novel patent or device, or upon the success of some theretofore untried enterprise, or upon the successful operation of a new mine, or of a projected railroad, the accurate determination of the intrinsic value of the shares is impossible. The value of the shares of a corporation organized to develop such an enterprise becomes a matter of even greater uncertainty if the shares are, as is often the case, subject to the prior rights of bondholders or preferred stockholders. The intrinsic value of the shares can in these cases not be computed or with any reasonable degree of certainty ascertained, and if no market value has been established, a court of equity will, according to the great weight of authority, decree specific performance of the agreement to sell or transfer the shares.11

10. Clements V. Sherwood-Dunn, Pac. 98; Sherwood v. Wallin, 1 Cal. 108 N. Y. App. Div. 327, 95 Supp. App. 532, 82 Pac. 566. 766, affirmed without opinion, 187 N. Illinois.--Ames v. Witbeck, 179 Y. 521, 79 N. E. 1102; Bateman v. Ill. 458, 53 N. E. 969. Straus, 86 N. Y. App. Div. 540, 83 I owa.-Schmidt v. Pritchard, 135 Supp. 785; Ehrich v. Grant, 111 N. Iowa 240, 112 N. W. 801. Y. App. Div. 196, 198, 97 Supp. 600. Minnesota.--Selover v. Isle HarBut see Selover v. Isle Harbor Land bor Land Co., 91 Minn. 451, 98 N. Co., 91 Minn, 451, 98 N. W. 344, 100 W. 344, 100 Minn, 253, 111 N. W. Minn. 253, 111 N. W. 155.

155; Northern Trust Co. v. Mark11. Federal.-Krohn V. William ell, 61 Minn. 271, 63 N. W. 735. son, 62 Fed. Rep. 869, 877, affirmed, Missouri.--Butler v. Murphy, 106 sub nom. Williamson v. Krohn, 66 Mo. App. 287, 80 S. W. 337; Denni. Fed. Rep. 655, 13 C. C. A. 668, 31 U. son v. Keasbey, 200 Mo. 408, 98 S. S. App. 325.

W. 546; Baumhoff v. St. Louis & K. California.-Krouse y. Woodward, R. Co., 205 Mo. 248, 104 S. W. 5, 120 110 Cal. 638, 42 Pac. 1084; Trea. Am. St. Rep. 745. surer v. Commercial Mining Co., 23 Nevada.-Turley V. Thomas. 31 Cal. 390; Wait v. Kern River Min. Nev. 181, 101 Pac. 568, 135 Am. St. Mill. & Dev. Co., 157 Cal. 16, 106 R. 667.

Some jurisdictions allow an action for specific performance in any case in which it appears that the shares which the plaintiff has contracted to purchase cannot be obtained elsewhere than from the defendant.12 There is much to be said in support of this rule. If one has agreed to transfer to another the shares of a corporation but refuses so to do, and the promissor is the owner of the shares which he has agreed to transfer and is able to complete his contract, the simplest and surest method of doing

New Jersey.-Safford v. Barber, 74 N. J. Eq. 352, 70 Atl. 371.

New York.-Rau v. Seidenberg, 53 N. Y. Misc. 386, 104 Supp. 798; Gil bert v. Bunnell, 92 N. Y. App. Div. 284, 86 Supp. 1123.

Pennsylvania.-Goodwin Co.'s Appeal, 117 Pa. 514, 12 Atl. 736, 2 Am. St. Rep. 696.

Rhode Island.-Manton v. Ray, 18 R. I, 672, 29 Atl. 998.

Cf. Hyer v. Richmond Traction Co., 168 U. S. 471, 483, 42 L. Ed. 547, 18 S. C. 114, where the Court held -two judges dissenting—that the plaintiff's remedy at law was adequate as the present value of the franchise of the new company, and of its capital stock, were not wholly beyond estimate, though their value three or four years later was uncertain and might depend upon the management. The Supreme Court seems in this case to have further decided that specific performance would not be decreed, as the contract of the parties contemplated a partnership to operate a traction franchise, while the ordi. nance granting the franchise created the parties to whom it was granted, a corporation. The reasoning seems to be that a court of equity will

not decree specific performance of an agreement to form a partnership, and that there was no agreement to transfer shares of stock to the plaintiff. The reasoning of the majority of the court may accord with strict logic, but one cannot but feel that more exact justice would have been attained by the adoption of the views of the minority.

On the question of specific performance of agreements relating to the sale and transfer of shares, see note to Ryan v. McLane, 50 L. R. A. 501, and note to Hogg v. McGuffin, 31 L. R. A. N. S. 491, and note to Turley y. Thomas, 135 Am. St. R. 667, 689.

12. Federal.-Megibben's Adm'rs v. Perin, 49 Fed. Rep. 183, affirmed. 53 Fed. Rep. 86, 3 C. C. A. 443, 6 U. S. App. 348.

Illinois.-Hills v. McMunn, 232 Ill. 488, 83 N. E. 963.

Iowa.-Schmidt v. Pritchard, 135 Iowa 240, 112 N. W. 801.

Oregon.--Deitz v. Stephenson, 51 Or. 596, 95 Pac. 803.

Pennsylvania.-Northern Central Railway Co. v. Walworth, 193 Pa. 207, 44 Atl. 253, 74 Am. St. Rep. 683.

See also Cook on Corporations (7th ed.), & 338.

exact justice between the parties is to direct the carrying out of the precise agreement. Justice Story says that “it is against conscience that a party should have a right of election whether he would perform his covenant or only pay damages for the breach of it. But, on the other hand, there is no reasonable objection to allowing the other party who is injured by the breach to have an election either to take damages at law or to have a specific performance in equity.” 18

It should furthermore be said that specific performance of an agreement to transfer shares may sometimes be decreed if the aggrieved party proves that the shares have to him some special or peculiar value which cannot be measured in money damages. 14

A court of equity does not direct performance of the impossible and, therefore, refuses to decree specific performance of an agreement to transfer shares if it appears that the defendant is neither the legal nor equitable owner of the shares in suit.15 If the plaintiff would, but for the inability of the defendant to perform, have been entitled to a decree of specific performance, a court of equity will, while refusing to make such decree, retain jurisdiction and render judgment for money damages. 16 If, however, it appears that the plaintiff, before he commenced his action, knew that specific performance of his agreement was, or had become, impossible, his action in equity will be dismissed. 17

An agreement for the organization of a corporation and the 13. Story's Equity Jurisprudence 15. Ryan v. Martin, 165 Fed. Rep. (13th Ed.), $ 717a. Quoted, but not 765; Jones v. Tunis, 99 Va. 220, 37 altogether approved of, in Johnson S. E. 841; Columbine v. Chichester, v. Brooks, 93 N. Y. 337, 343.

2 Phillips 27. 14. Moulton v. Warren Mfg. Co., 16. Altoona, etc., Co. v. Kittan81 Minn. 259, 83 N. W. 1082; Butler ning, etc., Railway Co., 126 Fed, v. Wright, 186 N. Y. 259, 78 N. E. Rep. 559; Jones v. Tunis, 99 Va. 220, 1002, 37 N. Y. Civ. Proc. 253; Sher- 37 S. E. 841. man v. Herr, 220 Pa. 420, 69 Atl. 17. Jones v. Tunis, 99 Va. 220, 37 899.

S. E, 841. See note to Turley v. Thomas, 135 Cf. Hogg v. McGuffin, 67 W. Va. Am. St. Rep. 689.

456, 68 S. E. 41, 31 L. R. A. N. S. 18. Butler v. Murphy, 106 Mo. App. 287, 80 S. W. 337. Cf. Burke

division or transfer of its shares cannot be specifically enforced by a court of equity, unless the agreement is so drawn that the rights of the parties can be definitely ascertained. It is not, however, necessary that every detail of the scheme of incorporation should be set out in the agreement. If the properties to be conveyed, or the services to be performed by the parties, and the shares to be received in payment therefor, are clearly stated, the agreement is sufficiently definite, and if a company is organized in substantial compliance with the scheme outlined in the agreement, specific performance of the provisions relating to the transfer of the shares may be enforced.18

It is, however, necessary to keep in mind that the granting of a decree of specific performance of a contract relating to personal property, rests always in the sound discretion of the court, and that such decree will be denied if the court deems that the granting thereof would work a hardship, and that justice would not result therefrom.19 § 40. Actions of accounting.

Relief similar in effect to that obtained by an action for specific performance, is sometimes had by an action to enforce a trust or to compel an accounting for the shares issued to the promoters.20 The plaintiff must, in order to succeed in an action

491, where the court gave the plaintiff a lien upon the purchase money for the shares not yet paid by the innocent purchaser thereof.

540, 83 Supp. 785; Gilbert v. Bunnell, 92 N. Y. App. Div. 284, 86 Supp. 1123; Brown v. Britton, 41 N. Y. App. Div. 57, 58 Supp. 353.

20. Federal.-Krohn v. Williamson, 62 Fed. Rep. 869, 877, affirmed,

See post, 8 42.

19. Newton v. Wooley, 105 Fed. Rep. 541; Williams v. Montgomery, 148 N. Y. 519, 527, 43 N. E. 57; Butler v. Wright, 186 N. Y. 259, 78 N. E. 1002, 37 Civ, Proc. 253; Bate man v. Straus, 86 N. Y. App. Div.

Fed. Rep. 655, 13 C. C. A. 668, 31 U.
S. App. 325; Harvey v. Sellers, 115
Fed. Rep. 757; Warner v. Wood,
200 Fed. Rep. 542, 118 C. C. A. 636.

Alabamo.-Howison v. Baird, 145
Ala. 683, 40 So. 94.

Arizonar-Philes v. Hickies, 2 Co., 146 N. Y. 407, 41 N. E. 23. United Kingdom and Colonies. In Wait v. Kern River Min. Mill. McNeil v. Fultz, 38 Can. Sup. Ct. & Dev. Co., 157 Cal. 16, 106 Pac, 98, 198.

of this character, show something more than a mere contract to organize a company and transfer to him a portion of the share capital. If the plaintiff has transferred property to the defendant under an agreement that such property is to be transferred to a corporation and its shares issued to the plaintiff in payment, and the defendant transfers the property to the corporation and receives the shares therefor, he holds such shares as agent or trustee for the plaintiff and may be compelled to account therefor. Some fact upon which a finding of a partnership or trust relation can be predicated must, however, be shown in order that an action of this character may be maintained. 21

§ 41. Action to compel corporation to issue shares.

If the plaintiff has transferred his property directly to the corporation, under an agreement that he is to receive shares of the corporation in payment, the courts may treat the plaintiff as the owner of the shares and direct the corporation to issue stock certificates to him.22 An action of this character can

Ariz. 407, 18 Pac. 595, affirmed for In Badgerow v. Manhattan Trust want of prosecution, 154 U. S. 505, Co., 64 Fed. Rep. 931, the court sus14 Sup. Ct. 1147.

tained an action to impress a lien California.-Hunt v. Davis, 135 upon the securities. Cal. 31, 66 Pac. 957.

21. Everett v. Defontaine, 78 N. Colorado.-Farris v. Wirt, 16 Y. App. Div. 219, 79 Supp. 692; Colo. App. 1, 63 Pac. 946.

Avery v. Ryan, 74 Wis. 591, 43 N. New York.-King v. Barnes, 109 W. 317; Cf. Dickerson v. Appleton, N. Y. 267, 16 N. E. 332; Spier v. 195 N. Y. 507, 88 N. E. 1117, affirmHyde, 92 N. Y. App. Div. 467, 87 ing, 123 N. Y. App. Div. 903, 108 Supp. 285.

Supp. 293. Wisconsin.-Bannen v. Kindling, 22. Anthony v. American Glucose 142 Wis. 613, 126 N. W. 5.

the plaintiff showed that he was enThe right to the shares is not en- titled to receive 245,000 shares from forceable as against a bona fide pur. the individual defendant who had chaser thereof. Thurber v. Crump, absconded and could not be per86 Ky. 408, 6 S. W. 145.

sonally served. It appearing that

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