This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Contracts for the sale of corporate stock are controlled by the same principles as those applying to sales of other personal property in general. If the stock is one which is regularly bought and sold, it is easy to estimate in money the damages sustained from the breach. The vendee can then with the unpaid purchase money and the damages thus recovered purchase in open market an amount of stock equal to that contracted. In such cases the remedy at law is adequate, and in the absence of special circumstances specific performance will not be decreed.1 To obtain specific performance it must be shown further that special circumstances exist which make the remedy at law inadequate.2 What these facts are is a questioa upon which the courts are not entirely harmonious. There is perhaps a tendency at Modern Law to a greater liberality in granting specific performance.3 If the specific stock contracted for has a special and unique value to the purchaser for which money damages will not compensate him, it is said that specific performance will be given.4 The motive which often gives a unique value to a certain stock is the desire to control the corporation ; and equity holds that this is not such a circumstance as to make specific performance proper.5 Indeed, this fact has been said to negative the propriety of specific performance on the ground that such a contract is contrary to public policy.6 However, a contract intended to give the vendee one half the entire stock of the corporation has been enforced specifically,7 as has a contract for the sale of stock of no ascertained value which will give to the vendee the control of the corporation.8 Practicability in ascertaining damages has been suggested in many cases as a sufficient test, specific performance being refused if it is practicable to estimate the damages in money,9 while if impracticable specific performance is given.10 Thus if the value of the stock is uncertain,11 as where it has never been sold on the market,12 specific performance will be given. It has, on the other hand, been held that the fact that the stock is seldom offered for sale,13 or has no market value and is not quoted in commercial circles,14 is not of itself ground for specific performance if it is in fact easy to ascertain the damages. A mere dispute as to the value of the stock is not sufficient to show that its value is so uncertain that damages cannot be estimated.15 Even if the stock is rarely offered for sale or sold, and if the vendee may not be able to buy it, it must be further shown that he wishes the specific stock.16 The fact that the value of the stock fluctuates is a circumstance strongly tending to show that its value is uncertain and hence that specific performance should be given.17 The facility with which the vendee can buy the stock contracted for, in the open market, is an important element in determining the propriety of granting specific performance. The fact that the amount of the stock for sale is limited and that it will be impossible or difficult for the vendee to buy the specific stock in open market, even if he receives money damages, is a circumstance often relied upon in granting this relief.18 In some of the earlier cases it seems to be assumed that the fact that law cannot give the specific stock, but only money damages, is sufficient to justify equity in granting specific performance.19 Circumstances apart from the nature of the stock contracted for may make specific performance proper. Thus if the party who agrees to transfer the stock holds it in trust for the party to whom he agrees to transfer it,20 as where the transferee has furnished the money with which the transferrer bought the stock,21 or where the transferee originally transferred the stock to the transferrer gratuitously under his agreement to reconvey on demand,22 or where the stock was originally acquired by the transferrer under a contract to transfer it to the transferee on the payment by him of the amount agreed upon,23 specific performance will be granted, even apart from considerations of the difficulty of estimating damages or of obtaining the stock. The transaction gives to the transferee an equitable interest which equity will protect. The contract for the transfer of stock may involve the transfer of other property by reason whereof equity may grant specific performance without reference to the question whether the nature of the stock itself is such as to make specific performance proper, as where the stock is to be exchanged for specific realty and specific performance is given because of the land involved.24 A contract to convey all the corporate stock of a distillery has been enforced specifically on the theory that it was really a contract for the purchase of all the real and personal property of the distillerv.25
13 (Duke of) Somerset v. Cook-son, 3 P. Wins. 389.
14 Arundell v. Phipps, 10 Ves. Jr. 139.
15 Raymond Syndicate v. Brown, 124 Fed. 80.
16 Ralston v. Ihmsen, 204 Pa. St. 588; 54 Atl. 365.
17 Coggswell, etc., Co. v. Coggswell (N. J. Eq.), 40 Atl. 213.
18 Sporer v. McDermott, - Neb. -; 96 N. W. 232, 659; Ryan v. Doniey, - Neb. - ; 96 N. W. 234.
1 Cud v Rutter, 1 P. Wins. 570;
1 White &, Tud. Cas. 907; Cappnr v. Harris, Bunbury, 135; Treat v. Richardson, 47 Conn. 582; Colin v. Mitchell, 115 111. 124; 3 N. E. 420; Pierce v. Plumb. 74 111. 326; Ryan v. McLane, 91 Md. 175; 80 Am. St. Rep. 438; 50 L. R. A. 501; 46 Atl. 340; Kimball v. Morton. 5 N. J. Eq. 26; 43 Am. Dec. 621; Foil's Appeal, 91 Pa. St. 434; 36 Am. Rep. 671; Ewing v. Litchfield, 91 Va. 575; 22 S. E. 362; Avery v. Ryan, 74 Wis. 591; 43 N. W. 317.
2 Williamson v. Krohn, 66 Fed. 655; 13 C. C. A. 668; affirming, Krohn v. Williamson, 62 Fed. 869; Goodwin, etc., Co.'s Appeal, 117 Pa. St. 514; 2 Am. St. Rep. 696; 12 Atl. 736; Manton v. Ray, 18 R. I. 672; 49 Am. St. Rep. 811; 29 Atl. 998.
3 Krohn v. Williamson, 62 Fed. 869.
4 Bomeisler v. Forster. 154 X. Y. 229; 39 L. R. A. 240; 48 N. E. 534; Cushman v. Mfg. Co., 76 N. Y. 365; 32 Am. Rep. 315; Bumgardner v. Leavitt, 35 W. Va. 194; 12 L. R. A. 776; 13 S. E. 67.
5 Gage v. Fisher, 5 N. D. 297 : 31 L. R. A. 557; 65 N. W. 809; Foil's Appeal, 91 Pa. St. 434; 36 Am. Rep. 671.
6 Foil's Appeal, 91 Pa. St. 434;
36 Am. Rep. 671 (national bank stock).
7 O'Neill v. Webb. 78 Mo. App. 1.
8 Rumsey v. R. R., 203 Pa. St. 579; 53 Atl. 495.
9 Barton v. De Wolf. 108 111. 195; Northern Trust Co. v. Markell, 61 Minn. 271; 63 N. W. 735; Rigg v. Ry., 191 Pa. St. 298; 43 Atl. 212; Hissam v. Parish, 41 W. Va. 686; 56 Am. St. Rep. 892; 24 S. E. 600.
10 Newton v. Wooley, 105 Fed. 541; Fleishman v. Woods. 135 Cal. 256; 67 Pac. 276; Baldwin v. Commonwealth, 11 Bush. (Ky.) 417: Northern Central Ry. v. Walworth. 193 Pa. St. 207; 74 Am. St. Rep. 683; 44 Atl. 253; Manton v. Ray. 18 R. I. 672; 49 Am. St. Rep. 811; 29 Atl. 998.
11 Manton v. Ray, 18 R. I. 672; 49 Am. St. Rep. 811; 29 Atl. 998.
12 New England Trust Co. v. Abbott, 162 Mass. 148; 27 L. R. A. 271; 38 N. E. 432.
13 Barton v. De Wolf. 108 111. 195.
14 Moulton v. Mfg. Co., 81 Minn. 259; 83 N. W. 1082.
15 Rigg v. Ry.. 191 Pa. St. 298; 43 Atl. 212.
16 Eckstein v. Downing. 64 N. H.
248; 10 Am. St. Rep. 404; 9 Atl. 626.
17 Treasurer v. Mining Co., 23 Cal. 390.
18 Duneuft v. Albrecht, 12 Sim. 189; Leach v. Fobes, 11 Gray (Mass.) 506; 71 Am. Dec. 732.
19 Doloret v. Rothschild, 1 Sim. & St. 590; 2 L. J. Ch. 125.
20 Kolin v. Williamson. 66 Fed. 655; 13 C. C. A. 668; Cowles v.
 
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