Case ID: ohio-st_11/html/0626-01.html
Source: Caselaw Access Project
Author: {"author": "Sutliff, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Kelion Hager v. William Reed.
    A. and B. entered into a -written contract, that A. should subscribe and pay for ten shares of stock, and B. should pay him the par value thereof, with six per cent, interest on the money paid by B., in three years from the time of the first installment. A. subscribed and paid for the stock. B. received one dividend of eight per cent, interest, paid by the company on the first installment paid by A. Shortly before, and at the exniration of the three years, A. called on B. with his certificate of the stock, with a blank power of attorney thereto attached, for its transfer, but not signed, and offered to transfer it to B., and demanded payment. B. refused to accept and pay for the stock. In an action by A., stating in his petition said contract, his performance, and offers, and present readiness to transfer the stock, and asking judgment against B. for its par value and interest — Verdict and judgment for plaintiff — Held:
    1. That it was not necessary for the plaintiff to prove an actual transfer of the, stock, or an execution of the power of attorney; that an offer with the ability there and then to perform, was sufficient to entitle him to recover.
    2. That in such a case, time is not of the essence of the contract.
    
      3. That the facts of the ease being such as to have authorized a decree for specific performance, the defendant not asking an order, nor excepting for that cause, the omission to order a transfer of the stock to the defendant, on payment of the judgment for the price of the stock did not invalidate the judgment.
    Error to the district court of Belmont county.
    Tbe case in the district court was an action by Reed against Hager, to recover the par value of ten shares, of fifty dollars each, of the capital stock of the Central Ohio Railroad Company, upon a written contract, of which the following is a copy:
    “Article of agreement made and entered into between "Wm. Reed and Kelion Hager, this 10th day of July, 1852, witnesseth — That the said Wm. Reed hath agreed to take ten sháres of the capital stock of the Central Ohio Railroad, the said Kelion Hager agreeing to secure to the said Wm. Reed, six per cent, on all moneys paid on said stock, from the time of payment for three years, at which time said Hager is to take said stock by paying to said Reed the par value of the same. It is understood that the said stock is to be taken by said Hager, at the expiration of three years from the date of the first payment.
    “ Witness our hands and seals.
    “ Wm. Reed [seal.]
    “ Kelion Hager [seal.]
    “ Witness: W. A. Talbott,”
    In his petition, Reed states that he subscribed and paid for the stock, according to the terms of said contract; “ that on or about the 20th of August, 1852, on the requisition of the directors of said company, he made a payment of ten per centum on said subscription, and has, from time to time,, made payments as requested, and to the satisfaction of the directors of said Central Ohio Railroad. That on the expiration of the time limited in said contract, he requested the defendant to receive a transfer of said stock, and to pay him, the said plaintiff, the sum so paid, and the accruing interest thereon, which the defendant, Kelion Hager, refused, to do. The plaintiff, William Reed, further says, that he is now ready and willing, and has always, and at all times, been ready and willing to transfer to the defendant, Kelion Hager, the said ten shares of stock and all interest, in cash or scrip, received by him on the same. Said plaintiff claims that the-defendant owes him, on said contract, the sum of five hundred dollars, with interest from the 20th day of .August, 1852, till paid, for which he asks judgment, said Hager being entitled to the said stock, scrip, and interest.”
    To this petition Hager answered, admitting that Reed purchased and paid for the stock as alleged in his petition, but says that the “ said plaintiff did not tender to the said defendant the said stock, and demand of him payment therefor,, according to the stipulations of the said paper writing.”
    At the trial to a jury in the district court, the plaintiff,. Reed, to maintain the issue on his part, gave in evidence the-contract sued on, and copied above, and also testified that he-had fully performed the contract, on his part, by subscribing and'paying up for the stock, and that after the contract was-made, Hager said that he was going to make two per cent, off of him, but that “ after the stock declined, Hager would, say nothing about it; ” that he (Reed) was not at home at the time of the railroad excitement; that “ he had no confidence in companies then, and had not now, especially railroad companies; ” that the company had promised to pay eight per cent, on the money paid in on the stock subscriptions, and that the first installment of interest which accrued on fifty dollars, paid in by him on the stock, was paid to Hager in money, etc.
    In relation to the offer of the stock by Reed to Hager, and his demand that the latter should perform the contract, by ■payment, and accept a transfer of the stock, Reed testified as follows : “I once went to Hager and tendered him the stock, as I thought, at the right time, but found I was a month too soon. Hager would not talk to me afterward. I went to Hager, as I believe, at the right time, and made him a tender of the stock, and he still would not talk. I got the time of the first payment from the books of the company, and made a tender three years after that, at either Davenport’s or Talbott’s store, I don’t recollect which, at the town of Barnes-ville, in the county of Belmont, Ohio. In making the tender, I took the certificate of stock in my hand, and held it out to him and said, Here is that stock, I am ready to transfer it to you. Hager said nothing, but walked out of the store.”
    The substantive part of the certificate referred to by Reed in his testimony, and which was given in evidence to the jury, reads as follows:
    “This certifies that Wm. Reed is the owner of ten shares of the capital stock of the Central Ohio Railroad Company, transferable only upon the books of the company, in person, -or by attorney, on the surrender of this certificate.”
    This certificate is signed by the proper officers of the company. Below the signatures is a blank power of attorney, to authorize a transfer of the whole or any part of the stock.
    In his testimony as to said tender of the stock, Reed further stated that “ said blank form of a power of attorney was not then filled up by me, and is not now. I ascertained from Mr. Wright, the agent of the company, when my first payment on the stock was made. It was made on the 6th day of August, 1852, and it was on the 6th day of August that the above tender was made, , some time before the three years had expired, when Mr. Hager and I were going to Zanesville, to vote at some election, and on the adoption of •some measure and policy of the railroad company, in a conversation with Hager, I said to him, Now is a good time to transfer to you that stock, and then you can take it, and vote upon it. Hager said he would have nothing to do with it. This was before the tender made at Davenport’s office. The tender at Davenport’s office was made in this way: I told him I had come to make him a tender of that stock. I said,. I have it with me, and am ready to transfer it at any time I said, I have it here — at the same time putting my hand to my side coat-pocket, and took hold of my pocket-book, and drew it partially out. Hager said, We have no time to talk about that now. ,To which I replied, The time has come when you will have to talk about it; and Hager hurried out of the office. In fact, I had the above mentioned stock certificate in my pocket-book, but it was not shown or produced. I most always offered him the stock when we would get to talking,” etc.
    One of the directors of the railroad company was called as a witness by the plaintiff, and testified as follows:
    “We have by-laws for the transfer of stock. The transfer is made in this way: The stockholder fills up the blank power of attorney attached to the stock certificate, appointing someone, usually Mr. Secretary Wing, his attorney to transfer the stock; or he simply signs his name to the blank power, and it is filled up afterward by the assignee of the stock. The assignee takes the certificate and power to the office of the company at Zanesville, and the transfer is made, and a new certificate issues to the assignee of the stock. The power of attorney attached to this paper (stock certificate) is not signed. The transfer on the books would be the evidence of transfer; but we always regarded the signing the power of attorney as an actual transfer. I suppose that until the transfer is made on the books of the company, the holder of the stock could not vote or receive dividends.”
    John Davenport was called by the plaintiff, and testified as follows : “ Reed followed Hager into my office; said, I have stock here and want to transfer it; took out pocket-book; didn’t show stock. Hager waived him off.”
    The defendant’s counsel requested the court to instruct the jury that the transfer of the stock and payment for it, being mutual acts to be performed at the same time, the plaintiff could only recover upon showing performance, or what is equivalent to performance on his part; and that to constitute a sufficient offer, the plaintiff must show that he did all that was incumbent on him, which he could do without the assent and concurrence of the defendant; and that it was incumbent on the plaintiff to have procured a transfei' of the stock on the books of the railroad company, and a stock certificate to be issued to the defendant; and that calling upon the defendant with the stock certificate in his pocket, and offering to transfer the same, without producing it, was insufficient; and that if Reed had not the transferred stock ready for delivery, cr the present means of then transferring the stock to Hager at the time and place of the offer, the offer to perform, so made by Reed would not entitle him to recover.
    The court refused to give the instruction requested; but in relation to the demand and offer on the part of the plaintiff, the court charged the jury as follows :
    “ If the jury shall be of opinion, from the testimony, that by the custom and rules of the railroad company, transfers of its stock in market were made by filling up and executing the power of attorney attached thereto, and if they shall find that on the day of the expiration of the three years from the first payment op account of such stock by Reed, Reed met Hager, having in his possession the certificate of stock offered in evidence, and having it in his power to execute such power of attorney, and Reed then and there proposed to transfer the stock to Hager in such form and manner, and Hager then and there refused to accept the same, Hager is liable on his contract in this case, though Reed may not have exhibited to Hager such certificate of stock.
    
      “ And again, that time is not of the essence of the contract, and if within a reasonable time after the expiration of three years (such reasonable time to be determined by the jury, under the charge of the court), Reed offered to perform his part of the contract, and had it in his power then and there to do so, and Hager refused to accept the same, then, in that case, Reed is discharged from making any other or further tender of performance on his part, and Hager becomes liable in this action, if he has received in whole or in part the interest stipulated to be paid by the railroad company.”
    Hager, by counsel excepted to the charge as given, and to the refusal of the court to charge as requested.
    
      The jury found a verdict for the plaintiff, Reed; and the court, after overruling a motion for a new trial on the ground that the court erroneously charged the jury, and that the verdict was contrary to law, entered judgment on the verdict. To reverse this judgment, Hager filed a petition in error in this court, and assigns for error, thé refusal of the court to charge as requested, and the charge as given.
    
      B. S. Cowen, for plaintiff in error.
    
      Davenport & Kennon, for defendant in error.
   Sutliff, J.

The difference between the charge requested by counsel for defendant, and the instructions given to the jury by the court, consists, principally, in the expression of legal duties incumbent upon Reed to perform, under the contract, to entitle him to a right of action against Hager, for nonperformance on his part.

The instruction requested by counsel assumes that the rights of the parties upon which the right to. recover rested, were strictly legal rights ; and that the mutual and concurrent acts of transfer and delivery of the stock on the part of Reed, and paying the agreed price on the part of Hager, required of either a performance on his part, or its equivalent, at the time specified in the contract, in order to entitle him to a right of action against the other party, for a delinquency on his part. And if the contract only had respect to the buying and selling of the stock upon a day named in the contract, no objection could, perhaps, be urged to the instruction so asked to be given. The rule is, that agreements are to be performed according to the provisions of the contract, as expressed and understood by the parties. And where the agreement is for merely performing reciprocal acts by the parties at the same time, the party who claims a right of action against the other party, for nonperformance, to sustain his right of action at law, must show that he has not been delinquent on his part.

And this can only be shown by proof of actual performance, or that the party was ready, able, and offering to perform all that was incumbent upon him under the contract to ¡do, according to its terms. And it is true, that while the parties, both in their pleadings and on the trial, seem to have treated the contract and action as one to which the rule asked to be applied was applicable, the court refused its application in the case. The court expressly charged the jury that time ■was not of the essence of the contract, and that if within a reasonable time after the expiration of the three' years, Reed offered to perform on his part, having it in his power to then and there do it, and Hager refused to accept the performance, it would be a sufficient offer to perform.

Does the record show this charge of the court, and the refusal to give the instructions asked, erroneous ? Eor, although in one view of the case, the instructions may seem wrong, if, from the whole record, the instruction can be sustained, it can not be here regarded error in the case.

The petition and proof of the plaintiff presented the case -of a contract between the parties, and acts of part performance under the contract, and an offer, and demand for full -performance made by plaintiff, before the commencement of ■the action; and an averment in the petition of being still •ready and willing to perform, and transfer said stock. The prayer of the petition for judgment is followed by this conclusion, said Hager being entitled to the said stock and scrip.” And from the proof upon the record, the certificate of stock and scrip seems to have been in evidence before the court and jury on the trial.

The contract is inartificial and somewhat inexplicit in its terms; but when construed in the light of the circumstances and facts proved, it presented a case which might have authorized a specific performance of the contract to have been decreed by the court.

From the testimony of the plaintiff, which seems to have ■been admitted without objection, the contract was entered into, under the following circumstances : Hager appears to •have had full confidence in the railroad company, and to have regarded a subscription for its stock a good investment; and Reed, at the same time, to have had, using his own language, "no confidence in companies, especially in railroad companies.” Hager, therefore, proposed to him that if he would-become a subscriber for ten shares in the company, and pay for the same, that he, Hager, would secure to him, Reed, six per cent, on all moneys so to be paid by him, Reed, in procuring the stock, “ from the time of payment for three years; and to then pay him, Reed, the par value of the stock, and interest, and take it off his hands; the three years to commence at the time of the first payment to be made by Reed. This proposition appears to have been acceded to by Reed, and the memorandum of the agreement was reduced to writing,, and signed and sealed by the parties, and attested by a witness. Such seem to be the circumstances, and the substance-of the contract made, as proved upon the trial.

The proof shows that, for a time, this contract was a very satisfactory one to Hager. -Both parties acted upon it. Reed, in faith of the undertaking of Hager under the contract, incurred, and discharged by payment, a liability of five hundred dollars, and obligated himself to transfer the stock to Hager upon receiving back his money so paid for it, with six percent. interest, although the company had assumed to pay eight per cent, upon the same. Hager received the eight percent. so long as the company paid the interest, he paying: none, in the meantime, to Reed. If the stock, at the expiration of the three years, had been at ever so high a premium,. Hager could have claimed the stock, as well as the eight per cent, interest, by paying the money so paid for it by Reed,, with six per cent, interest on the same, under this contract.

The case presented to the court was, therefore, one clearly cognizable by a court of equity. The whole case seemed, by the proof, addressed to the chancery powers of the court-And time is not, in a court of equity, generally regarded of the essence of the contract. But the contract, in this case, is by no means subject to the interpretation of a contract merely for the sale by Reed, and the purchase, by Hager, of stock, on; a particular day, at a specified price. It is rather a contract, by which Reed became obligated to purchase and pay for stock for Hager, and to hold it in trust for him until Hager should-, reimburse the money so expended, and which Hager so undertook to do within three years, and to thereupon accept the’ stock.

But, although the counsel of the plaintiff, in this view of the-contract, may have somewhat mistaken the nature of his right of action, it can not be said that he has mistaken the form of his action. The effect of the code has been to relieve the parties from all embarrassment in such cases. Having, in om courts, no longer any distinction in the forms of actions, in. chancery and at law, there was no impediment before the court in treating the case as in chancery. The distinction between-actions at law and suits in equity, and the forms of all such, actions being abolished, the court is to be regarded a court of law or of equity, and the petition, a declaration or a bill in. chancery, according to the nature of the case, as shown by the statement and proof of the cause of action presented in the case.

Nor can it he a cause of embarrassment that the issues were-submitted to the jury, instead of the court. It was competent for the court to permit a jury to find the issues of fact. Their finding was approved by the court, and a judgment properly entered for the plaintiff below.

But the court neglected to make the order that the plaintiff should execute a transfer of the stock. Does this omission constitute an error for which the judgment should be reversed?' We think not. In the first place, the plaintiff offered to make-the transfer previous to the commencement of his action; and his petition, in an informal manner, renewed the offer. And. if the statement of the same, in the petition, was objectionable, for informality, to authorize a decree for specific performance, the objection should have been made, by motion or otherwise, before trial and judgment. After judgment, it is true, the defendant was entitled to have the order in his favor subjoined; and it is unnecessary to determine whether such order in his favor was strictly due without his motion or request; for the record, in this case, not only shows that such order was not asked on the part of Hager, and that no exception was taken to its omission; but there is, in fact, no exception, for that cause, upon the record.

We can not, therefore, say that there is error upon the record, for that the court, under the circumstances mentioned, neglected to make the further order, in relation to the rights of Hager, which may arise upon his paying the money due to Reed, for the stock so held by him under the contract. Hager’s rights under the contract are obviously unaffected by the judgment so rendered; but will remain to be asserted by him, if necessary, after payment. The judgment of the district court is affirmed, and the cause certified to the court of ■common pleas.

Scott, C.J., and Peck, Gholson and Brlnkerhoee, JJ., concurred.