Appeal, No. 6, March T., 1963, from decree of Court of Common Pleas of Allegheny County, July T., 1958, No. 2767, in case of John F. Beggy v. George H. Deike, Sr., John T. Ryan, Jr., George H. Deike, Jr. et al. Decree reversed; reargument refused December 30, 1963.
Ella Graubart, with her Charles F.C. Arensberg, and Patterson, Crawford, Arensberg & Dunn, for appellant.
John C. Bane, Jr., with him Gilbert J. Helwig, Ernest R. Dell, Charles L. Albright, Jr., and Reed, Smith, Shaw & McClay, for appellees.
Before Bell, C.j., Musmanno, Jones, Cohen, Eagen and Roberts, JJ.
OPINION BY MR. JUSTICE ROBERTS
Appellant, by complaint in equity, seeks to rescind certain sales of stock to officers and majority stockholders of a corporation rather than to the corporation itself as required by the terms of a restrictive agreement. The decree of the court below dismissed appellant's complaint; hence, this appeal.
Appellant began his employment with Mine Safety Appliances Company (MSA) as an office boy at age 15, and thirty years later, at his separation from the company in May, 1948, occupied the position of vice president, secretary and treasurer. From 1931 until April, 1950, he served also as a director of the corporation. On August 2, 1948, appellant and MSA executed
a written agreement which recited that appellant, as owner of 12,860 shares of common and 3,215 shares of preferred stock, was required to grant MSA the first opportunity to purchase any stock he should wish to sell, and that if MSA failed to exercise its right to purchase within thirty-five days, appellant was free to sell the shares to any purchaser.*fn1
At all times since the organization of MSA in 1917, the Deike and Ryan families, together, have been the largest and majority owners of the capital stock of the company. In 1955 and 1956, defendants George H. Deike, Sr., and John T. Ryan, Jr., were chairman of the board and president of MSA, respectively. The other defendants, George H. Deike, Jr., and Helen D. Henderson, are the son and daughter of the chairman of the board, and Mary Irene Ryan is the wife of the president.
In March, 1955,*fn2 appellant desired to sell some of his common stock and requested his attorney to contact MSA. This information was communicated to George H. Deike, Sr., chairman of the board, who informally related to the board appellant's offer to sell
shares. The directors indicated to Deike that the company was not interested in acquiring the stock. However, neither appellant nor his attorney was so advised. Deike, on March 8, 1955, confirmed to appellant's counsel, by letter signed "Geo. H. Deike, Chairman of the Board," willingness to purchase 850 shares at the offered price per share, with instructions to deliver properly endorsed stock certificates to the Potter Bank for a check in full payment.*fn3 Appellant delivered 852 shares to the bank and received the bank treasurer's check for $11,076. The stock was not acquired by the corporation, but by Deike and Ryan individually. As found by the chancellor, the identities of the purchasers "... may not have been known at the time to the plaintiff ...." Four hundred twenty-six shares were transferred to Ryan's wife and 213 shares each to Deike's son and daughter.
Approximately 13 months later, in April, 1956, appellant desired to sell and additional 894 shares of common stock, and he once more asked his attorney to contact MSA. The Board of MSA was advised that appellant offered to sell, but the corporation again indicated to Deike that it had no interest in making the purchase. However, Mr. Deike fixed the price at $15 per share and directed that the certificates be ...