Lindquist v. Mr. Steak, Inc.

TUCKETT, Justice:

The plaintiffs are all of the shareholders of the stock in Provo Steak, Inc., and they commenced these proceedings claiming that the defendant breached a contract wherein it agreed to purchase all of the shares from the plaintiffs. From a judgment in favor of the plaintiffs, the defendant has appealed.

Provo Steak, Inc. established and was operating a restaurant business in Provo, Utah. The business was established and was operating pursuant to the terms of a franchise agreement entered into between Provo Steak, Inc. and Mr. Steak, Inc. The restaurant operated at a loss and the defendant called upon the shareholders to make additional contributions to the capital of the business to cover the losses. Plaintiffs declined to make further contributions, and after some negotiations defendant orally agreed to buy all of the stock of the plaintiffs. The offer was made in March, 1969, wherein the defendant proposed to pay an equivalent of the book value of the stock providing all of the shareholders agreed to sell. A final determination of the book value of the stock was made on May 15, 1969, and the value was determined to be $5.77 per share for the 3,600 shares outstanding.

As of August 5, 1969, 1,900 shares had been tendered to the defendant, which represented approximately 52 per cent of the total. By a letter dated August 6, 1969, the defendant withdrew and rescinded its offer to purchase. It was stipulated at the pretrial that the terms of the offer were as :set forth in the letter (Exhibit 1). It is noted that no time for the performance and delivery of the shares was specified therein. The balance of the shares was tendered to the defendant on November 6, 1969.

On April 6, 1969, the assets and control of the restaurant business of Provo Steak, Inc. were taken over by the defendant. The court found that the defendant assumed control and possession of the assets of the business pursuant to its offer to purchase the shares of stock owned by the plaintiffs and their acceptance. On August 6th, at the time the defendant elected to cancel and rescind its offer to purchase, it did not tender back the assets or control of the business.

The trial court found that the terms of the offer had been substantially complied with prior to August 6th and that the delay in the delivery of the stock to the defendant resulted from inadvertence and an oversight on the part of one of the plaintiffs. The court further found that the defendant suffered no financial detriment by reason of the delay, and that the franchise owned by Provo Steak, Inc. was subsequently sold by the defendant to a third person. The court concluded that time was not of the essence in the contract entered into between the parties, and that the plaintiffs had fully performed the contract by their tender of the stock on November 7, 1969. The court thereupon entered judgment for the plaintiffs.

On appeal the defendant assigns as error the findings of the court below that the plaintiffs had substantially performed the conditions of the offer to purchase prior to its rescission, and that the defendant’s assumption of the control and possession of the assets of Provo Steak, Inc. was pursuant to the agreement to sell the stock. These are issues of fact rather than issues of law, and our examination of the record reveals that the findings are supported by substantial evidence, and under the rules of traditional appellate review this court will not reverse.¹

The judgment of the court below is affirmed. Respondents are entitled to costs.

HENRIOD and CROCKETT, JJ., concur.

1 . Dansak v. Deluke, 12 Utah 2d 302, 366 P.2d 67.