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RALPH HOCHMAN & CO. v. FORT STANWIX MFG. CO.

May 16, 1967

RALPH HOCHMAN & COMPANY, Plaintiff,
v.
FORT STANWIX MFG. CO., Inc., Defendant



The opinion of the court was delivered by: PORT

MEMORANDUM-DECISION AND ORDER

 PORT, District Judge.

 In this suit for brokerage commissions, submitted on a stipulation of facts, the parties are in accord as to the facts and the applicable law. The plaintiff bases its claim to relief on a brokerage agreement (Exhibit A) and a contract of sale (Exhibit B), both of which are incorporated in plaintiff's complaint and discussed below. The parties are in court because they reach contrary results in applying the conceded legal principles to the stipulated facts; each contends that the factual and legal situation mandates a verdict in its favor.

 Jurisdiction of the court is based on diversity of citizenship.

 THE BROKERAGE AGREEMENT

 On or about May 23, 1961, the plaintiff accepted a proposal from the defendant, prepared by the plaintiff's attorney, *fn1" making the plaintiff Fort Stanwix's agent for the sale of the defendant business as a going concern or the sale of its physical assets.

 Paragraph 2 of the agreement fixes the "upset price" of the company "as a going business" at $125,000.00, stipulating that the sale would not include cash, accounts receivable, work in process, or real estate and cranes with attendant hoists; it further provides: "any sum received in excess of the upset price to be divided equally between yourself [the plaintiff] and the Corporation [the defendant] * * *."

 Paragraph 5 of the agreement provides:

 
In the event that you are not successful in selling the company as a going business and you sell the physical assets, you will guarantee them [the defendant] $100,000.00; the next $12,500.00 will be paid to you and the excess of $112,500.00 will be divided equally between you and the Fort Stanwix Mfg. Co., Inc. or its shareholders; all sums received from the sale of assets as aforesaid, shall be deposited in an escrow account in the Rome Trust Co. and you guarantee that the full sum of $100,000.00 shall be deposited in said account on or before December 1, 1961.

 Paragraph 13 provides:

 
In the event you produce a satisfactory purchaser for the real estate, the minimum price of same to the Company shall be $50,000.00 and any excess over that figure shall accrue exclusively to you. Real estate will include light fixtures and cranes with attendant hoists. We will agree to furnish good and marketable title to same.

 THE CONTRACT OF SALE

 By an agreement dated August 12, 1961, Fort Stanwix agreed to sell and Mandell Industries Corporation agreed to purchase all the defendant's assets. As part of the agreement, the seller and its stockholders agreed not to compete with the purchaser in the state of New York for ten years, and further contracted to save the purchaser harmless against any liability caused by any default of the sellers.

 The purchase price was fixed at $511,396.99 plus a minor adjustment. At the option of the defendant sellers, the purchase price was to be paid in cash, in stock of the purchaser, or in a combination of cash and stock of the purchaser. ...


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