Mason Smith & Co. v. Bierce

Citations

• 104 La. 96

Syllabus

<p>Syllabus.</p> <p>Certain parties in New Orleans proposed the erection of a cotton compress in Shreveport.</p> <p>There entered into their plan the making of such arrangements with the local cotton men as would secure for the press the control of the greater part of the cotton received at Shreveport.</p> <p>At the same time they proposed and agreed among themselves that the controlling interest in the corporation should always remain with themselves, and to this end that no one of the promoters should sell his share of stock to an outsider without first offering it to his associates.</p> <p>But it was found that the local men who controlled the cotton' trade at Shreveport would have nothing to do with the enterprise unless the control of a majority of the stock was placed in their hands.</p> <p>It being reported to plaintiffs that difficulties threatening to defeat the scheme existed, they wired their associates at Shreveport, who had gone there to carry their common plans into execution, that they would ratify and join in whatever it was thought best to do.</p> <p>Their associates (defendants herein) then gave the Shreveport people an option on a number of shares sufficient to enable the latter to control the corporation, which was then organized and the compress erected. It proved a success, paying large dividends and its stock advanced within twelve months one hundred per cent, in value.</p> <p>In this suit .by plaintiffs to recover damages of defendants on account of the transfer of stock called for by the option without first offering same to plaintiffs :</p> <p>Held — That what defendants did was essential to the success of the enterprise and must be considered as coming within the intent, letter and spirit . . of plaintiffs’ telegram and defendants are not answerable in damages.</p>