By: Rob Harris
Regime change can be messy. Just ask the Obama administration.
So it was, too, a hundred years ago for Richard Jackson, Jr., the former secretary of Michigan’s iconic Red Run Golf Club.
In 2016, Red Run was but a two year old toddler, and on the financial precipice. The club needed money . On January 5, 1916, the club’s board of directors–having mounted a largely unsuccessful fund raising campaign–authorized Secretary Jackson to leave no stone unturned, passing a resolution that provided:
“Whereas, it having become imperative that some plan be adopted by which to raise sufficient funds to meet the obligations of the club, and
“Whereas, the further sale of bonds to members of the club seems improbable, and
“Whereas, there being $50,000 of bonds remaining of the $80,000 authorized and unsold, and
“Whereas; Mr. Richard Jackson, Jr., reports that he has assurances which will enable him to place said bonds at their par value if certain conditions obtain, now, therefore, it is
“Resolved: That the board of governors of the Red Run Golf Club hereby engage Mr. Richard Jackson, Jr., to secure purchasers for said $50,000 bonds and do hereby authorize and empower him to complete all necessary arrangements for the sale and delivery of said bonds….
“That the compensation of Mr. Richard Jackson, Jr., for selling said $50,000 bonds be 5%, such compensation to be due and payable when the full amount of $50,000 for the sale of said bonds be deposited to the credit of the club in the Security Trust Company.
“That the limit of time given Mr. Jackson to sell said bonds is two weeks from January 6, 1916.”
At the time, Mr. Jackson was already feeling besieged, believing himself working too hard for too little. He was not happy with compensation which “at first [was] 10% commission on moneys taken in [and] was later changed to $200 per month. He explained that ‘he wanted to get out, that he had devoted his entire time to the club and said of his services: “My duties as secretary of the club were as greens keeper; I also had to do everything around the club that was supposed to belong to other people to do. In fact, I did all the work that was to be done around there.”‘”
And, lo and behold, Mr. Jackson succeeded. Contrary to the expressed view of the board that “the further sale of bonds to members of the club seems improbable,” Mr. Walter E. Flanders, an automobile pioneer credited with enabling Ford to produce 10,000 cars a year, stepped up and took the entire $50,000 of bonds. His beneficence was not without condition, as he insisted upon regime change. The existing club officers thus resigned and a new board was elected.
However, when Mr. Jackson asked for his 5% kicker, the new administration said “no”, contending that Mr. Flanders’ financing was effectively a done deal before Jackson negotiated the terms of his finder’s fee. The board contended that the 5% commission was really a scam concocted by Jackson to compensate him after-the-fact for the underpayment he claimed he had suffered over the years.
The jury, however, agreed with Mr. Jackson, and the Supreme Court of Michigan affirmed. As the court explained, Jackson, “denied all charges of concealment or unfair conduct and told his story of the transaction which, taken in connection with the written records of the club, entitled him to recover if the jury, who saw and heard all the witnesses, believed him.”