Reversed with directions.
Jennings, Strouss, Salmon & Trask and Richard G. Kleindienst, all of Phoenix, for appellant.
George D. Locke, of Phoenix, for appellee.
Udall, Chief Justice. Stanford, Phelps and La Prade, JJ., concurring. De Concini, Justice, dissenting.
Udall, Chief Justice.
Raymond O. Mitchell, plaintiff (appellant) sued Niblack Thorne, defendant (appellee) for $ 7,500 on an alleged oral contract to repurchase one thousand shares of the capital stock of Hadley Products, Inc., an Arizona corporation. The defendant's answer specifically denied there was such an agreement and also pleaded as an affirmative defense that if such an agreement was found to exist it was unenforceable because of the statute of frauds. The case was tried to the court, sitting without a jury, which made findings of fact and conclusions of law and then entered judgment for the defendant thereby denying plaintiff recovery upon his complaint. This appeal followed.
Our case, Rugee v. Hadley Products, Inc., 73 Ariz. 362, 241 P.2d 798, will throw additional light on the affairs of this corporate [73 Ariz. 397] entity and the plaintiff's dealings therewith.
As the basis for its judgment the court's findings were to the effect (1) that defendant on October 8, 1947, promised that if plaintiff invested in such stock and thereafter desired to sell it, he (defendant) would repurchase the stock for the amount plaintiff had paid for it; (2) "That thereafter, and on October 10, 1947, Plaintiff visited the plant and office of the corporation in Phoenix, and made an agreement to purchase one thousand (1,000) shares of its stock from Frank Hadley, the owner of such stock and the President of the corporation, for Seventy-five Hundred and no/100 Dollars ($ 7,500.00). On making said agreement with Mr. Hadley, Plaintiff gave him his check for One Thousand and no/100 Dollars ($ 1,000.00) on account of such purchase, and paid the balance of the purchase price during October, 1947." and (3) that plaintiff before filing this suit made a formal tender of his stock certificate to defendant demanding that he repurchase it, which demand was refused. From these findings the court concluded as a matter of law: "That the promise of the Defendant to purchase Plaintiff's stock was a separate and independent transaction, and no part of Plaintiff's agreement whereby he purchased his stock, and therefore is void and unenforceable under the Statute of Frauds. Section 58-101, subsection 4, A.C.A.1939."
The first and, as we believe, vital assignment of error is in substance that the trial court erred in concluding as a matter of law that the promise of the defendant to purchase plaintiff's stock was a separate and independent transaction and no part of plaintiff's agreement whereby he purchased his stock and was therefore void and unenforceable under the statute of frauds, because such conclusion of law was not sustained by the evidence and is not supported by the authorities.
The following proposition of law was submitted in support of this assignment: "Where, in a sale of stock by a corporation to an individual, an officer of the corporation interested in the success of the corporation orally promises to repurchase the stock, such an oral contract is a part of the contract of sale of stock and the delivery of the stock to the individual and payment therefor constitutes performance and takes the oral contract out of the statute of frauds."
The defendant does not particularly challenge this as an abstract statement of law but insists that it is ...