O-So-White Products Co. v. Richards Manfg. Co.

A rehearing has been had in this matter. See 237 Mich. 310. It was urged again by counsel that defendant was excused for refusing to go forward with the contract because the securities commission had not authorized the sale of the new stock. In order that the deal might be promptly closed according to the terms of the contract, Mr. Donovan, president of plaintiff, allowed the company to use his old stock to deliver to defendant as the new stock had not yet been issued. No criticism is made of the validity of the old stock. It was pronounced all right by President Richards and accepted. The new stock was subsequently issued and submitted to the commission and it authorized plaintiff to solicit purchasers for the new stock and submit the bids to the commission. The commission knew that 51 per cent. of the new stock was going to Donovan. But why discuss the validity of the new stock? Defendant had no new stock, it received old stock in payment of its deal. The defendant company had no interest in the new stock when this deal was closed. If it had no interest in the new stock it has no right to complain of its invalidity because a sale was not authorized by the commission. Complaint is also made that defendant was entitled to its increase in new stock. That is another question *Page 445 outside of this litigation. If that be true, defendant can get its rights in that respect in another proceeding. Another reason why this question should not be considered is because it was not raised in the court below. The rehearing did not persuade the writer that any change should be made in our previous conclusion. The decree should be reversed, with costs of the proceedings to plaintiff. SHARPE, C.J., and WIEST and McDONALD, JJ., concurred with BIRD, J.