Molina v. Largosa

DISSENTING OPINION OP

ABE, J.

I disagree with the opinion of the majority of the court.

This action was filed by plaintiff Molina against defendant Largosa for the sum of $2,000 on account, of money had and received,1 The gist of the complaint is that plaintiff paid defendant $2,000 and that he has not received the consideration for which he had paid the sum of $2,000.

. The evidence is uncontradicted that plaintiff subscribed and agreed to pay for 40 shares of “non-voting shares” at a par value of $50 per share and paid defendant the sum of $2,000 on account thereof. . .

In. the formation of an informal contract, it is elementary law that an offer made by an offeror must be unconditionally, accepted by the offeree. Friel v. Jones, 42 Del. Ch. 148, 206 A.2d 232 (1964); Oregon-Pacific Forest Prod. Corp. v. Welsh Panel Co., 248 F. Supp. 903 (D. Ore. 1965). Here plaintiff by means of a printed subscription form which read “SUBSCRIPTION FORM FOR THE PURCHASE OF NON-VOTING SHARES” agreed to buy and subscribed for 40 shares of the nonvoting stock of a corporation to be formed by defendant and others. The intent to subscribe for non-voting shares is explicitly and specifically stated in the printed form. I do not and cannot agree with the holding of the majority court that:

“The parties had either intended that voting stock be *513issued to the plaintiff but had inadvertently used the wrong printed form; or, the plaintiff was not concerned with whether he got voting or non-voting stock, so long as he had full rights to participation in the profits. In the highly improbable event that he had really intended to contract for non-voting stock, it is now too late for him to complain that when he got more than he bargained for, there was a failure of consideration. Further, since there was no showing that the parties had intended that the corporation to be formed was to issue more than one class of stock, the shares actually issued had to be voting common stock.”

It is difficult to understand the court’s holding because the elementary rule is that an offer must be unconditionally accepted by the offeree to become a binding contract. Here, the plaintiff offered to buy non-voting shares and it is not for this court to say that plaintiff intended to purchase other than non-voting stock when the subscription agreement so specifically states. Further, I believe the court is begging the issue by its statement that “since there was no showing that the parties had intended that the corporation to be formed was to issue more than one class of stock, the shares actually issued had to be voting common stock,” because it does not in any way change the offer of the plaintiff to buy non-voting stock.

The uncontradicted evidence is that there has been no stockholders’ or directors’ meeting. It appears that the only act or acts which may be interpreted as the acceptance of plaintiff’s offer to purchase 40 shares of non-voting stock is the filing of the articles of incorporation together with the affidavit of the officers; however, we have said in Gillespie v. Camacho, 28 Haw. 32 (1924), that the mere fact of incorporation does not amount to acceptance by the corporation of a subscriber’s offer.

Further, the majority of the court holds that “after payment of the subscription price by Molina, not only *514was his .name listed as a stockholder in the affidavit filed with the corporation’s Articles, but Molina himself on different occasions made inquiries concerning his stock certificate,, and. from time to time requested Largosa to sell his shares of stock. The acceptance by the., corporation of Molina’s offer and Molina’s acknowledgment of such acceptance are, therefore, clearly supported by the record.”

In my opinion, the facts recited by the court do not show an unconditional acceptance2 of plaintiff’s offer and I disagree with the holding of the court that acceptance of plaintiff’s offer is “clearly supported by the record.”

In the next paragraph the court says “Molina may not now rescind his contract.” Here, Molina is not rescinding his contract. How can there be a rescission of a contract when a contract has not been formed?

There is no evidence to show that Molina’s offer was unconditionally accepted by the corporation. Thus, there was no meeting of the minds and mutual assent was lacking; therefore, no contract was formed, and plaintiff is entitled to the return of $2,000 paid for 40 shares of nonvoting stock because he did not get what he bargained for.

I would reverse.

Plaintiff alleged that “defendant owes plaintiff $2,000 for money had and received from plaintiff on or about May 3, 1963, to be paid, by the defendant to the plaintiff.”

The record does not show that Molina knew that he was listed as owner of 40 shares of common stock with voting right. On the contrary, the record shows that a certificate of stock was issued in November 1964, but which was never delivered to Molina, which stated on its face Molina was owner of 40 shares of common stock of authorized capital of $60,000, and not $12,000 as indicated on Articles of Incorporation and affidavit of officers.