Helms v. Duckworth

In 1948, Charles Easterday, 70 years old, and Duckworth (defendant), 37 years old, started a business together. Easterday received 51 percent of the company’s stock, and Duckworth received 49 percent. They signed an agreement, both agreeing to put their stock in a trust, with Hamilton National Bank (the bank) (defendant) as trustee. The agreement stated that upon the death of either, the other would have the right to buy the decedent’s stock at $10 per share. When the agreement was signed, the $10-per-share amount reflected the fair market value of the company. The agreement permitted that purchase price to be updated each January, but the men never availed themselves of that option. The agreement also provided that Easterday, despite being the majority shareholder, could not dissolve the corporation or dispose of the corporation’s assets without Duckworth’s approval. Duckworth was trained in law and business, and Easterday was not, and Duckworth drafted the agreement. Easterday died in 1956. Upon his death, Duckworth paid the bank for Easterday’s shares at $10 per share. At the end of 1955, the company stock was worth approximately $80 per share. Rae Helms (plaintiff), the administratrix of Easterday’s estate, filed suit to cancel the agreement. Duckworth filed an affidavit stating that he never intended to renegotiate the purchase price as permitted in the contract. The trial court granted Duckworth summary judgment. Helms appealed.