The Taft-Pierce Co., of Woonsocket, RI, made a number of prototype rifles for Johnson. After having purely experimental guns built in small machine shops, Johnson turned first to Marlin, which made the three earliest prototypes to be demonstrated to the U.S. military. He later worked with Taft-Pierce, a firm well known for precision machine work and the manufacture of experimental and prototype devices in many fields, to produce enough rifles for serious testing. At that time (early 1938), Johnson had not yet developed the rotary magazine of the Model 1941 and was using a vertical feed system with modified BAR magazines.
Taft-Pierce first turned Johnson down, saying the firearms were out of their normal line of business, but Johnson persuaded them that it was simply a mechanism that was subject to mass production like any other mechanical device and they agreed to do the work.
So that rifle was not built after Johnson's Model 1941 was rejected by the U.S. Army, but before the Model 1941 had even been developed.
While Johnson never considered Taft-Pierce for mass production (they were not set up for that), they did manufacture several prototypes, including three or so in a sporter configuration.
Johnson then (mid-1938) went to a single column magazine designed by Taft-Pierce that was made in two versions, a 5-round and an 8-round. That seems to be one of the vertical feed prototypes made by Taft-Pierce and would accept that special magazine.
Those rifles are extremely rare; Marlin and Taft-Pierce combined seem to have made less than ten, so I have no idea what the numbers mean.
The stock appears to be like the stocks Johnson Automatics used for sporterizing surplus bolt action rifles in the post-WWII period. I can't find any indication that that style was original on any of those vertical feed rifles. How did it get that stock? How did your friend's grandfather come by it? Good questions, but I have no clue.
(Most of this information comes from Bruce Canfield's excellent "Johnson Rifles and Machine Guns", with Robert Lamoreaux. I highly recommend the book and you should get one for more background on the rifle.)
Value? Who knows? My WAG would be in the middle five figures, but that is just my opinion. The right person might be willing to go twice that.