
    Frederick Joseph, Respondent, v. Ferdinand Sulzberger, Appellant.
    First Department,
    February 4, 1910.
    Contract—agreement to purchase stock on joint adventure—remedy for breach is in equity — contract unilateral and without consideration— when unexpressed promise not implied — agreement not constituting agency — measure of damages—evidence — proof of market value.
    The remedy on the breach of an agreement to purchase stock on the joint account of several persons is in equity.
    An agreement to purchase stock on the joint account of several persons, including the plaintiff, to hold the same and to turn over a certain proportion thereof if the plaintiff paid the purchase price, is unenforcible from lack of mutuality and consideration if there were no agreement on the plaintiff’s part to take the stock or to pay his portion of the purchase price.
    Self-serving documents and letters written by or on behalf of the plaintiff after the making of-the contract are not evidence of its terms.
    A reciprocal undertaking on the part of the plaintiff to pay for his portion of the stock is not established by testimony that the defendant “agreed” to turn the stock over.
    Unexpressed promises will often be implied where it is plain that they have been inadvertently omitted from the contract and the facts are such that it can be assumed that the promise would have been made if attention had been called to it. But an unexpressed promise is implied only to enforce a manifest equity, 'or to reach a result which the unequivocal acts of parties indicate that they intended to effect.
    Where the defendant’s promise to buy stock for a joint adventure originated with him, and the plaintiff, who did not bind himself to take the stock, neither advocated nor opposed- the scheme, but merely silently acquiesced therein, he cannot hold the defendant on the theory that he purchased as aii agent.
    On the breach of a contract to purchase-and turn over stock it is the plaintiff’s duty to minimize the damages so far as is reasonably possible and he.cannot by inexcusable neglect permit his damage to grow and charge it to the defendant..
    Where on the breach of an agreement to sell stocks which could not be obtained in the open market, it appears that the plaintiff had a contract with other parties running beyond the date of the breach, entitling him to purchase the stock at a certain price, the measure of damages is the difference between the price at which the defendant agreed to sell and the price at which the; plaintiff could have purchased under his .option.
    Under- such circumstances it is improper to use the balance sheets of the corporation and to take the “book value’’ as proof of the market value.
    Appeal by the defendant, Ferdinand Sulzberger, from a j.udgof the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Flew York on the 29th day of March, 1909, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 6tli day of April, 1909, as resettled by an order entered on the 19th day of April, 1909, denying the defendant’s motion for á new trial made upon the minutes.
    
      Paul D. Gravath, for the appellant.
    
      Samuel Untermyer [.Abraham Benedict with him on the brief], for the respondent.
   Scott, J.:

This is an appeal hy defendant from a judgment for a substantial sum as damages for the refusal to deliver to plaintiff certain shares of the capita? stock of the Schwarzschild and Sulzberger Company pursuant to an oral contract alleged to have been entered into bet ween, the parties in 189.8. The complaint contains some allegations which would be pertinent to an action for conversion of the stock, but it was expressly stipulated upon, the trial that plaintiff sought, to recover damages for breach of a contract to deliver. . The Schwarzschild- and Sulzberger Company (hereinafter termed,.for convenience and brevity, the company) was - organized in 1892 with a:n authorized capital stock of $5,000,000, of which about $4,300,000 had been issued and was outstanding during the period of the events leading up to this action. The plaintiff and the defendant and one Samuel Weil were, in 1898, directors and shareholders in the company, defendant owning 21,937&- shares; plaintiff, 7,312-a- shares, and Samuel Weil, 3,662^ shares. These shares will be termed for convenience the “ original ” shares or holdings. Of the stock issued upon the organization of the company, about $1,000,000 had been issued to acquire the Phoenix Packing Company. This stock was held in comparatively small lots, mainly in New England, and has been referred to throughout the case and will be hereafter referred to as the New England stock. In 1898 a project was conceived, for acquiring as much as possible of this New England stock. The company, although making large profits, had for about a year discontinued the payment of dividends, and it was not proposed to pay any for still another year at least. It is at this time, and with' reference to this stock to be acquired, that the plaintiff alleges the contract sued upon was made. It is of importance to consider his allegations in that behalf, in connection with the evidence, because it is of vital importance to détermine at the outset whether any enforcible contract was made, and, if so,, whether it was the precise contract sued upon. The allegation of the complaint is: “ Second. On or about the first day of February, 1898, the plaintiff, the defendant, Samuel Weil and Cyrus S. Hapgood were stockholders of the Sehwarzschild & Sulzberger Company and were desirous of increasing their holdings in the capital stock thereof, and entered into an agreement for valuable consideration, wherein and whereby it was agreed that the defendant should purchase from time to time additional amounts of stock of said company for himself, the plaintiff, and said Weil and Hap-good respectively, in proportion to their respective holdings of stock of said company, that is to say, said stock to be so purchased was to belong to each of said four persons in several shares in the same relative proportion as the amount of stock standing in the name of each of said four persons bore to the, aggregate amount of stock standing in the names of all of them; and it was further agreed that the defendant should advance all moneys required to pay for said stock or procure the cost price of said stock or so much as might be required by defendant, to be advanced by banking houses or others; that the shares of stock belonging to each of said four parties should be carried or caused to be carried by the defendant for the account and risk of each of the owners thereof, including the plaintiff, and that the defendant would deliver to- the plaintiff his share or proportion of the stock so- purchased as aforesaid at any time upon payment to defendant of the actual cost of - the plaintiff’s share of such stock plus the pro rata amount the defendant should then have paid for carrying the same, or, if he should personally have carried said stock, then at. a rate not to exceed six- per cent per annum to the time of the delivery of the stock to' plaintiff less any dividends declared and paid thereon; .and it was further agreed that the defendant would deliver to'said Weil and Hapgood their respecti ve proportions, of said stock upon demand and upon similar conditions ; and the plaintiff and said Weil and Hapgood each agreed that upon demand he would pay to defendant his proportion of the sums advcmeed or laitd out in the purchase of such stock as aforesaid., and to which defendant was entitled under said agreement less the .dividends declared and- paid thereon, upon delivery hy defendant to each of them respectively of his proportionate share of said stock.” ■

At the trial the plaintiff was the sole witness as to what the agreement was between the parties. The defendant was said to be in Europe, and Weil and Hapgood, although present in court, were not called as witnesses by. either party. The plaintiff’s version of •the agreement was as follows: In 1898 I had a talk with Mr. Sulzberger about this stock that was in Hew England, that had been given to the Hew England people for the Phoenix Packing Company’s business. I recollect the occasion. I had several talks. The time in 1898 when I had the first talk about this Hew'England stock was, I think, in the end of 1898, when Mr. Sulzberger, Mr. Weil, Mr. Hapgood and myself were at the meeting of directors of the company. Just what took place was Mr. Sulzberger and Mr. Hapgood talked together about buying the stock, the pool stock, the stock of the company, the Hew England stock. I remember the substance of what took place. The substance was that Mr. Sulzberger said to' Mr. Hapgood that now we can buy that stock for a low figure on account there is no dividend going to be paid. There had not been any paid for a year. The concern had been making money, a great deal of money. I mean the corporation. Mr. Sulzberger told Mr. Hapgood that on account there is no dividends going to be paid he can buy that stock cheap, at a very low figure, he give them orders to buy it. Mr. Hapgood said, 'I think I can do that. If you leave it to me I can buy that stock.’ Mr. Sulzberger told Mr. Hapgood whenever he buys any stock to telephone him and draw on him with, the stock attached. He told him to send it to some bank downtown or to his office. Mr. Sulzberger says that he don’t want to be known in .the transaction, that Mr. Hapgood shall go in the market and buy that stock as cheap as possible, as he cannot afford to be known in this transaction on account of not going to pay any dividends. Mr. Sulzberger said to Mr. Hapgood, in my presence and Mr. Weil’s presence that the stock is to be bought and divided on pro rata to each man’s holding of the stock, and he will hold that stock, he will carry it for six per cent interest. That ended the conversation at that time, and then it came always up again when Mr. Hapgood was present." The subject was referred to again at other conversations. Mr. Sulzberger said to me and Mr. Weil we were to have an interest in the stock, pro rata to our holding of stock in the company. Our holding of' stock were as I have stated them here.”

It is noticeable and significant that the plaintiff does not say in the portion of the evidence quoted above that he, or Weil, or Hap-good agreed on their part that they or either of them would take the proportionate part of the stock to be purchased, and would pay to defendant on demand, or at any time, their proportionate share of the cost of acquiring the stock and the carrying charges theréon, and although the plaintiff was examined and cross-examined and re-examined at great length, he did not, at any time, testify that he had agreed, on his part, to take and pay for any portion of the stock to be acquired. In another part of the testimony he gives a slightly different version of the agreement respecting the Hew England stock, saying: “ The arrangement between myself and Mr. Sulzr berger and Mr. Weil and Mr. Hapgood regarding the so-called pool stock was that the pool stock was to be bought by Mr. Hapgood.; and to be paid for by Mr. Sulzberger, and to be carried at six per cent for the joint account of Mr. Hapgood, Mr. Weil and myself and himself.' We were, not asked to provide any of ■ the money. Mr. Sulzberger says lie will advance the money and carry this stock for six per cent. That was the arrangement.” The difference between the two versions of the agreement sued upon is important. The court charged, without objection from the plaintiff, that plaintiff could not recover in this action-if the so-called “pooled” of Mew England stock was purchased and held for the joint account of all the parties to the alleged contract. This constituted the law of the case, and the instruction was doubtless correct, for if the transaction had been one for the joint account the remedy would havé béen by an action in equity. (Ross v. Willett, 76 Hun, 211.) The foregoing comprises all. of the oral testimony to be found in the case as to the precise terms" of the alleged oral contract. It was, however, referred to in certain documents which were read in evidence. In March, 1902, the plaintiff and the defendant and Samuel Weil signed an agreement relative to the management of the company and their relations with each other. It-was agreed that neither should sell any portion of his original holdings without first affording the other an opportunity to buy; that plaintiff and Weil should each receive a certain salary; that dividends should be paid if the net profits come to a certain sum in any year and the like* This agreement never became operative because it was conditioned-upon the consummation of a pending plan for the issue of preferred stock,-, which was never consummated. It was introduced, therefore, not because it established - a new contract between the parties respecting the distribution-of the Mew England stock, but ¡because one of its clauses, .which evidently referred to that stock, was deemed to constitute a formal admission as to what the oral contract in that regard had been. That clause read as follows : “Sixth. It is further understood and agreed that if any of said parties to this agreement shall purchase or' acquire any shares of stock or shall have heretofore acquired any shares of stock, whether the same have heretofore been issued or-whether the same, may be hereafter issued, other than their original holdings as hereinabove, set forth, then in that event the others of said parties or either of them shall be entitled to participate in such purchase at the. same price that is paid therefor pro rata as the amount of his stock bears to the holdings of the others of said parties; it being the intent hereof that in all holdings of shares of stock of Schwarzschild & Sulzberger Company heretofore or hereafter acquired (other than their original holdings as above set forth), the parties shall participate pro rata according to the amount of their several holdings, upon the same terms that the parties so purchasing may have acquired the same, and it shall be the duty of the said party or parties so acquiring said.stock in said Schwarzschild & Sulzberger Company to offer participations therein to the others of said parties as aforesaid.”

It will be observed upon a careful reading of this clause that- it states the agreement respecting the Hew England stock precisely as plaintiff had stated it upon his oral examination. It emphasizes the obligation resting upon the party who shall have or shall purchase shares of stock other than his original holdings, to allow the others to participate, and to offer them an opportunity to do so, but it is entirely and significantly silent as to any obligation on their part to accept such participation, or as to any right of the party purchasing to demand that the other parties should participate. In August, 1902, the defendant, then owning and holding more than a majority of the stock of the company, entered into an agreement (which was not carried out) with several of the largest competitors in the business looking to a consolidation of interests and the organization of a new corporation to take over the plants and business of the several signers. He agreed to turn over his stock in the new company to the new corporation for $190 per share and a certain amount of new stock, and reserved the right to put in the stock then held by plaintiff and Weil upon the same terms. He thereupon, and on September 10, 1902, entered into certain written contracts with plaintiff and Weil, one of which referred to the Hew England stock acquired by plaintiff in the following terms Whereas, said Frederick Joseph and' Samuel Weil are interested in the profits which may be made on three thousand three hundred and one and one-half shares, being the difference between twenty-five thousand two hundred and thirty-nine shares agreed in said August contract to be deposited "in said Trust Company, and twenty-one thousand nine hundred and thirty-seven and one-half shares, part of twenty-two thousand and ninety and one-half shares heretofore by said Sulzberger deposited in said Trust Company.”

This recitation, while not inconsistent with the existence of such a contract as is-alleged in the complaint, does not tend to. prbve it, for it is equally consistent with either of the agreements' testified -to by plaintiff, i. e., an agreement on defendants’ part to permit plaintiff and Weil to participate in the purchase of the stock without any corresponding obligation on their part so to participate, or an agreement that Sulzberger should- acquire and hold the stock for joint account of himself, plaintiff, Weil and Hapgood. This agreement, therefore, fails to furnish evidence of the missing element of the-contract sought to b,e enforced in this action, that is,' the agreement on plaintiff’s part to take upon demand, or at any time, ,ar.d to pay for his proportion of the Hew England stock acquired by defendant. The record contains a number of self-serving documents and letters signed by plaintiff or written in his behalf long after -the making of the contract of 1898. They were all prepared by lawyers, doubtless by plaintiff’s instructions, but as, evidence of what the contract réally was they are wholly valueless. As the case stood then at the close of the evidence, the only contract winch had been proven in any way resembling. that set forth in the complaint was an agreement on the part of defendant that, he would'.purchase and carry so much- of the Hew England stock as could be procured, and that such stock should be divided pro rata between the parties to ; the agreement, but- no agreement had been shown on the part of plaintiff or of Weil or Hapgood that either of them would at any time, take his' pro rata share of such stock and pay his proportion of the cost and carrying charges. Such an agreement was, wholly unilateral and .involved no obligation' on plaintiff’s part which the defendant coúld have enforced. There was no consideration to support defendant’s promise, and it cannot be enforced. (Chicago & Great Eastern R. Co. v. Dane, 43 N. Y. 240; Booth v. Milliken, 127 App. Div. 522.) The respondent insists that the use-by plaintiff in various parts of his testimony of the Words “ agreed,” “ agreement” and “arrangement” imports á reciprocal undertaking ;on his part to take and pay for his pro rata proportion of the Hew England stock on demand. ' We are unable to draw any such inference. In using.the words quoted the plaintiff was referring to the agreement which he testified to, and the terms he used in so referring to it added nothing to the vérsion which he gave of it.. Hbr are we able to accept the-further contention of the respondent that. there must be implied in the agreement as testified to a reciprocal undertaking on plaintiff’s part to take and pay for his fro rata proportion-of the Hew England stock. It is quite true that unexpressed promises will often be implied where it is plain that they have been inadvertently omitted from the contract, whether written or oral, and the facts are such that it can be assumed that the promise would have been made if attention had been called to it. It may, however, be implied only to enforce a manifest equity, or to reach a result which the unequivocal acts of the parties indicate that they intended to'effect. (Genet v. Del. & Hudson Canal Co., 136 N. Y. 593.) Such a case is presented where an agent purchases property at the request and for the account of his principal. Although there may not be any definite promise on the part of the principal to reimburse his agent, the law will imply and enforce one. (Markham v. Jaudon, 41 N. Y. 235.) This is no such case. Sulzberger did not act as plaintiff’s agent nor at plaintiff’s request. The proposition to buy the Hew England stock originated with Sulzberger himself, and so far as appears, plaintiff neither advocated nor opposed it. His position was that of silent acquiescence, and it may well be that when the agreement was made in 1898, plaintiff considered that it was favorable to himself because it imposed no obligation upon him. . To read an inched promise on plaintiff’s part into the agreement as proven would be, not merely to supply a term evidently omitted by inadvertence, but to make a. contract for the parties. We are, therefore, forced to the conclusion that the plaintiff failed to prove the contract alleged in his complaint.' The defendant’s motion for a dismissal of the complaint should, therefore, have prevailed.

Having arrived at that conclusion, it is unnecessary to consider the rulings which preceded the submission to the jury of the question whether or not the contract alleged in the complaint had been-proven, or the charge of the court upon that-subject. But since the views already expressed will necessitate a retrial, .it is proper to deal with the question as to the measure of damage, to which a large portion of the briefs and arguments have been devoted. If the defendant ever made an enforcible contract to deliver 'Hew England stock to plaintiff, that contract was broken and plaintiff’s right to damages arose when he demanded fulfillment of the contract and defendant refused. The evidence as to when such demand and refusal occurred is not clear, the plaintiff himself fixing various dates, hut none later than December,' 1905. ’Whenever the breach occurred, it was plaintiff’s duty to minimize the damages so far as reasonably-possible, and he might not, by inattention, want of care or inexcusable neglect, permit his damage to grow and then charge it all to the other party. (Parsons v. Sutton, 66 N. Y. 92.) The subject of the contract alleged in the complaint was stock of an incorporated company, and the damages ordinarily allowed for the breach -of a contract' to buy or sell such stock is. the difference between 'the price stated in the contract and the price at which the same stock could be sold or bought in the market within a reasonable time after the breach. There was no open market for the stock of the company in this ease, in the sense that it was dealt in or quoted upon any stock exchange, but it appeared that the plaintiff, if he desired to acquire the number of shares of stock when he demanded from defendant, could have procured an equal number of shares from a member of the Schwarzschild family at $115 per share. He had a contract to that effect running beyond the latest date which he fixes as that of. the breach, and his own evidence, shows that he was being importuned by Schwarzschild to take the stock at the price mentioned. Of course, he was not bound to buy that stock, but the opportunity to buy it served to fix and limit the damage lie suffered by reason Of defendant’s refusal to deliver. The method of fixing damages adopted at the trial was to introduce in evidence the balancé sheets of the company for a number of years, including that for the year, subsequent to the breach. • These served to show what is called the “ book value” of the stock, which is not always the equivalent of the market value. This method of ascertaining the value of stock or bonds is sometimes resorted to, but only when there is no evidence obtainable of the value of the bonds or stock, as such. (Industrial & General Trust, Ltd., v. Tod, 180 N. Y. 215.) It was not necessafy or proper to resort to such evidence in the present ease, because there was ample'evidence: that, so far as plaintiff'was concerned, there was a market in which he could have acquired the stock-which the defendant had refused to deliver. It is unnecessary to consider further the numerous exceptions with which the record abounds.

For the reasons above stated, the judgment must be reversed and a new tfial granted, with costs to appellant to abide the event.

Ingraham, P. J., McLaughlin, Clarke and Dowling, JJ., concurred.

Judgment and order reversed, new trial ordered, costs to appellant to abide event.  