E.I. Du Pont de Nemours Powder Co. v. Schlottman
United States Court of Appeals for the Second Circuit
218 Fed. 353 (2d Cir. 1914)
On July 24, 1908, T.C. Du Pont (T.C.), the president of Du Pont Powder Company (Du Pont) purchased the capital stock of Pittsburgh Fuse Company (Fuse Company) from Chas. G. Grubb. In return, T.C. paid Grubb $150,000.00 in Du Pont stock. Prior to the date of the deal, T.C. had written a letter stating that Du Pont would pay an additional $25,000.00 in securities to Grubb if, after one year, T.C. determined the Fuse Company plant was worth $175,000.00, and Du Pont was manufacturing double tape fuse at $2 per thousand with powder at $3.60 per keg. Du Pont held the plant for six months before selling it to a purchaser who later dismantled the plant. Schlottman (plaintiff), Grubb’s assignee, brought suit against E.I. Du Pont du Nemours Powder Co. (defendant), arguing that, because Du Pont sold the plant before one year, Du Pont deprived Grubb of the opportunity to receive an additional $25,000.00 if the conditions described in T.C.’s letter were satisfied after one year. Schlottman sought the difference between $175,000.00, the alleged value of the Fuse Company, and $120,000.00, the market value of the Du Pont stock received by Grubb. Both parties moved for a verdict in their favor. The judgment granted a verdict for plaintiff.
Rule of Law
Holding and Reasoning (Ward, J.)
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