A. C. GINGERICH, Plaintiff-Appellee,
PROTEIN BLENDERS, INC., and Maplecrest Turkey Farms, Defendants-Appellants.
Newton L. Margulies, Max Putnam and Putnam, Putnam & Putnam, Des Moines, for appellants.
Louis J. Kehoe, Alfred E. Baldridge, Washington, and Simmons, Perrine, Albright, Ellwood & Neff, Cedar Rapids, for appellee.
THOMPSON, Chief Justice.
Plaintiff's action is brought in five counts. We find it necessary, however, to consider only Count I. The action is in equity for specific performance of a contract for the sale of corporate stock, and defendants' complaint is that the trial court improperly denied their motion to transfer to law. Counts II through V are clearly cognizable at law, being for money demands only; and plaintiff justifies the court's ruling that they are triable in equity only by the contention that they grow out of the same transaction as that stated in Count I, which he says is clearly matter for equitable relief; and so fall within the rule that equity having obtained jurisdiction over the subject matter will determine all questions material to the accomplishment of full and complete justice between the parties. Since we have concluded that Count I is itself properly cognizable at law, it follows that the other counts are also triable in that forum, and we shall give no further attention to them.
Count I of plaintiff's petition declares upon a written contract by the terms of which the defendant Protein Blenders, Inc., agreed to purchase from plaintiff 4,505 shares of preferred [250 Iowa 656] stock in the defendant Maplecrest Turkey Farms, at the price of $52.50 per share, or a total sum of $236,512.50. Protein Blenders, Inc., will hereafter be referred to as the defendant. The petition alleges that the defendant has failed and refused to accept the stock or to pay the agreed amount therefor.
It is further alleged that the plaintiff has 'tendered defendant Protein Blenders, Inc., all of said 4,505 shares of said preferred stock together with the certificates evidencing same, properly endorsed and demanded payment therefor; sellers have performed all other conditions on their part.
'Plaintiff is now ready, willing and able to perform said contract * * * and hereby tenders said 4,505 shares of said preferred stock and the certificates evidencing same properly endorsed.'
The petition further pleads that 'Said preferred stock is of unknown and not easily ascertainable value; that the plaintiff has no adequate remedy at law.' The prayer of the petition is this: 'Wherefore, on Count I plaintiff prays for a decree of specific performance of said contract and judgment against defendant Protein Blenders, Inc. for $236,512.50 with interest thereon as provided by law and for such other relief as may be equitable and that he have judgment for costs.' Defendants moved to transfer to law, and their motion was overruled. Application being duly made, we granted leave to appeal as from an order before final judgment.
I. It is the defendant's contention that Count I of plaintiff's petition is merely a money demand and as such is triable by ordinary proceedings; in other words, that plaintiff has an adequate remedy at law. In addition to its motion for transfer of
the entire action to law, defendant filed a written request for a jury trial, which the trial court's ruling had the effect of denying also.
The plaintiff asserts that for the purposes of this appeal we must take the case as made by its petition. This is correct, at least as to well pleaded allegations. Gigray v. Mumper, 141 Iowa 396, 398, 118 N.W. 393, 394. So it is urged that the statements that the stock in question is of unknown and not easily ascertainable value are conclusive; and this being so, it follows [250 Iowa 657] that equitable jurisdiction to enforce specific performance must attach. We agree that the allegations as to value must be taken as true; but we are unable to join in the conclusion which plaintiff draws therefrom. We think it appears from the pleaded allegations of the petition that plaintiff has an adequate remedy at law; and this being so, defendant's motion was well taken.
II. The problem is not exceptionally difficult and is solved by certain elementary rules which are clearly applicable. Personal property includes everything which is the subject of ownership and is not classified as real estate. 73 C.J.S. Property § 8, p. 170. Specific performance of contracts in relation to personal property will not be enforced ordinarily, or in the absence of special circumstances making the payment of damages inadequate to afford proper relief. 49 Am.Jur., Specific Performance, Sec. 125, pages 146-147; 81 C.J.S. Specific Performance § 65, pp. 568-569. Corporate stock is personalty and the same rules apply. Thus it is said in the same title in 49 Am.Jur., Sec. 130, page 154: 'The remedy by specific performance has been refused to the vendor when the only purpose of the suit was to recover the purchase price, for which the remedy at law was adequate.' Jones v. Newhall, 115 Mass. 244, 15 Am.Rep. 97; Hissam v. Parrish, 41 W.Va. 686, 24 S.E. 600, 56 Am.St.Rep. 892. The rule is thus stated in 81 C.J.S. supra, § 70, p. 577: '* * * specific performance of a contract concerning stocks or bonds usually will not be decreed unless damages at law are clearly incomplete and inadequate; * * *.' We have ourselves followed the general rule without exception. In the early case of Richmond v. Dubuque & Sioux City R. Co., 33 Iowa 422, we said: 'Equity will not interfere when the injured party has an adequate remedy at law.'
III. However, counsel for plaintiff contend the remedy here is no adequate; and they cite authorities which they think support their position. They rely much upon the pleaded allegation of their petition that the stock in question has an unknown and not easily ascertainable value. Many of their authorities go to the point that in such circumstances the vendee who has contracted to purchase stock may compel its delivery to him by an action asking specific performance by the vendor. Likewise, it [250 Iowa 658] is held that when the stock represents control of the corporation its delivery may be required in such an action. Schmidt v. Pritchard, 135 Iowa 240, 112 N.W. 801, and Kurth v. Hauser, 262 Wis. 325, 55 N.W.2d 367, are of this type. It may also be true that the seller of corporate stock which has no known or readily ascertainable value may have a right of specific performance to recover the agreed price when his damages would be difficult to assess and uncertain in amount if he were limited to an action at law, although we find it unnecessary to decide this point under the circumstances of the case before us. See First National Bank of Hastings v. Corporation Securities Co., 128 Minn. 341, 150 N.W. 1084. We think the amount of plaintiff's recovery as shown by Count I of his petition is definite and fixed and does not depend upon the question of whether the stock has a known or ascertainable value. We shall discuss the reason for this holding in Division V following.
IV. The question of mutuality of remedy is somewhat urged in the plaintiff's brief, although it is conceded that the fact that specific enforcement may be available to one party to a contract does not ...