KANAVOS V. HANCOCK BANK & TRUST
395 Mass. 199, 479 N.E.2d 168 (1985).
NATURE OF THE CASE: Hancock (D) appealed from a decision imposing liability upon D for
failing to give Kanavos (P) proper notice of D's intent to sell to a third party stock that
P held an option to purchase.
FACTS: Hancock Bank & Trust Co. (D) gave Kanavos (P) the right to acquire all the stock
of 1025 Hancock, Inc. before the bank sold the stock to anyone else on the same terms.
Brown, the executive vice-president of the bank, gave P a letter in which the bank agreed to
pay him $40,000 for surrendering the option to purchase the stock. He further gave P the
option to match the price of sale of property owned by the bank. The bank then sold the
stock to a third person for $760,000 without giving P notice and opportunity to buy the
stock. The balance on the first mortgage was $2,500,000. The jury, in response to a special
verdict question, concluded that the apartment complex was worth $4,000,000. Contract
damages were determined by subtracting from $4,000,000 the balance due on the mortgage
($2,500,000) and the sale price of the stock ($760,000). They determined that $740,000
equaled the amount by which the fair market value of the stock exceeded the price at which
it was sold. The $40,000 option surrender payment was then added to arrive at a final
judgment of $780,000. D challenge to the special verdict and resulting judgment in that the
judge failed to instruct the jury that P had to be ready, willing, and able to pay D
$760,000 (i.e., within the sixty days, to match the offer the bank received and accepted).
The judge ruled that P's ability to pay $760,000 was not material to this case.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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