The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-10-09
WOODWARD KNOCKED OUT.
Another Chapter in the City
Water Works Deal
A SALE THAT DID NOT GO
"Jayhawker" Consequently Has No
Claim for Commissions
A SALE THAT DID NOT GO
Some More Information About Big Trans
action That Only Materia'ized ON
Paper-VirtuaIIy Settled

GU di., JuUgo MChlHley VTtuaIly sebticu
the case. holding thai Woodward hau no
case. Woodward, better known as Jay.
hawker." brought SUIT against Perry,
Pierce ct al. for commission for nego-
tiating the sale OF the City Water COM
pany's stock to Pierce and Shaffer, which
sale was never consum mated, a suit now
being pending in the superior court to set
the whole matter aside. AS the case is
an important on, Judge Mckinley's
opinion is given in full, as follows:
In this action the plaintiff seeks to
establish his rights In certain contract
for the purchase of STOCK OF the Los An
geles City Water company. ana also his
the contract. The defendants who made
the contract in question for the sale OF
the stock to the defendants Pierce and
Shaffer have filed supplemental an
swer and a cross-complaint, both OF
which allegc a breach of contract by de-
PENDANTS Pierce and Shaffer and ask to
have the same cancelled and annulled.
Plaintiff and defendants Pierce and
Shaffer have attacked the supplemental
answer and cross-com plant by motions to
strike out and demurrers.
Counsel cite large number of cases
upon the question as to what constitute
proper matter to be set up in cross
complaint. but such cases are only in
small degree helpful in determining this
motion, since each case depends upon a
particular state of facts and none of them
are closely analogous to the one ut bar.
In every case the court is obliged to de-
termins from the statement of the course
of action In the complaint and that in
the cross-complaint whether in the latter
the defendant seeks affirmative relief re-
lating TO or depending upon the contract
or transaction upon which the action is
hpn nj hn IN
which it relates.
The contract upon which this action Is
brought is not the contract between de.
PENDANTS, which cross-cOm plainants seek
to have cancelled. but the contract be-
tween plaintiff and defendants Pierce and
Shaffer, under which he claims an inter-
est in the former contract. The affirma-
tive relief sought by the cross complaint
does not, therefore, relate to, or depend
upon, the contract upon which the action
is brought. But although that Is the
contract upon which the plaintiff brings
his action, he is not contented to rest
upon the establishment of his rights
under it against Pierce and Shaffer, but
makes the otner defendants parties and
seeks a decree against them establishing
his rights in the original contract and in
the stock agreed to be sold.
The property affected by the action is
therefore not only the two contracts, but
the stock itself.
If the plaintiff is successful in this &C.
ton, he will secure decree that he has
an interest in the contract between Pierce
and Snaffer and the other defendants and
in the stock covered by that contract. He
has joined the defendants other than
Pierce and Shaffer because he seeks relief
against them establishing his right in the
contract and in the stock.
The claim that all rights under that
contract have been forfeited affects the
IN W no ufa nd
IS the proper subject of cross com plaint.
The plaintiff seeks to establish an in
terest in the contract and stock, while
defendants dispute that interest ana
seek decree that whatever interest he
has together with that of their co-defend-
ants, has been forfeited. The Code ex-
presses it that they may seek such relief
against party, so that they are not
limited to relief against the plaintiff
alone, but may ask it against any party
to the action.
I can see no good reason why the same
matters should not he set up by both cross
complaint and supplemental answer.
The one is for the. purpose of preventing
the plaintiff from procuring relief, the
other in order to obtain it.
If defendants have good defense they
certainly ought not for that reason, be
precluded from claiming affirmative re-
lief. if entitled to it, nor be precluded
from making their defense because enti-
tied to affirmative relief.
The supplemental answer is directed
against plaintiff, since it sets up matters
which, if established, will prevent its OBJ
tanning decree binding upon defendants
that he is the owner of an interest in the
stock covered by contract between de-
PENDANTS.
Ii it be true that the rights OF the pur-
chasers should be forfeited by reason of
breach of contract, plaintiff cannot OBJ
tain Judgment against the defendants IS.
who have filed the supplemental answer.
The cross compliant seeks affirmative
relief against plaintiff and defendants
Pierce and Shaffer, as very clearly ap-
pears from its allegations and prayer.
The cross complainants are, III my opin-
ion. proper parties to ask for forfeiture
OF the contract.
The contract was with part of the
cross oomplainants as trustees and the
question OF their authority to make the
contract cannot be raised now upon this
demurrer. The other stockholders who
join in the cross complaint arc also proper
parties because having an interest in the
stock, but are not necessary parties.
That time was of the essence of the
contract seems very clear from the terms
of the contract, not only because it ex-
presslv so declares. but because the cir
instances are such as to make it essen
tial to the interest of all parties that
performance be made within the limited
time.
The contract does net show an exc.
cuted sale, but all executory contract, I'M
der which the title to the stock was
placed in the Union Trust company to be
passed upon the performance of certain
conditions precedent by Pierce and Shat
Ter as to payment.
The only matter in tn contract indicat-
ing that the title passed to Pierce and
Shaffer and that the stock was held as a
pledge, is the agreement to have the stock
transferred to the Union Trust company
to hold as collateral security for the
parties of the first part hereof for the
faithful performance OF all the condi-
tons, etc. )" but the agreement, taken all
together, shows that the terms collateral
security" was loosely used and that the
property was to be held in escrow in
stead of as security.
The stock was to be transferred to
Pierce ana Shaffer upon the making of
the payments required by the contract,
but they do not anywhere in the agree
ment promise to make the payment or
perform any condition whatever. In the
event of their failure to perform, the $50.
600 paid in cash was to be forfeited and
their rights under the contract termi-
mated, and then, although not so expressly
stated IN the contract, 1t would be the
duty OF the Union Trust company to re-
transfer the stock to the parties who had
placed it in their hands.
The point is made that no demand
upon the Union Trust company is alleged
for the return of the stock, but that is
not question which plaintiff or defend
nvx tr I SL-c -.