Case Name: Mark M. Dittenfass, Respondent, v. David Horsley and Others, Appellants, Impleaded with Universal Film Manufacturing Company and Others, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1917-02-23
Citations: 177 A.D. 143
Docket Number: 
Parties: Mark M. Dittenfass, Respondent, v. David Horsley and Others, Appellants, Impleaded with Universal Film Manufacturing Company and Others, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 177
Pages: 143–152

Head Matter:
Mark M. Dittenfass, Respondent, v. David Horsley and Others, Appellants, Impleaded with Universal Film Manufacturing Company and Others, Defendants.
First Department,
February 23, 1917.
Equity — specific performance of unilateral contract—when assignee of contract not entitled to specific performance—pleading — complaint—option — tender of performance — consideration for supplementary agreement.
A court of equity will not require specific performance of a unilateral contract against the party who has executed it at the instance of another party thereto who is not likewise obligated to perform.
The assignee of a contract or option to purchase corporate stock, who has not assumed the obligations of his assignor thereunder, is not entitled to specific performance, although he alleges readiness, willingness and ability to perform the obligations of his assignor.
Complaint in a suit by an assignee to compel the specific performance of an option to purchase stock examined, and held, not to state a cause of action.
Where an option specifies no place of performance it is incumbent upon the party securing the option to tender performance at the time specified.
A nominal consideration specified in an option agreement cannot be extended to constitute a consideration for a supplementary agreement. Smith, J., dissented, with opinion.
Appeal by the defendants, David Horsley and others, from orders of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 26th day of June, 1916, denying the appellants’ separate motions for judgment on the pleadings, consisting of an amended complaint and amended answers thereto.
Samuel F. Moran, for the appellants..
Max D. Steuer, for the respondent.

Opinion:
Laughlin, J.:
The pleadings are an amended complaint, separate answers by the appellants and replies to defenses relating to the validity and enforcibility of the alleged contract on which the action is based as affected by the non-payment of the stamp tax imposed by the provisions of section 270 of the Tax Law (Consol. Laws, chap. 60 [Laws of 1909, chap. 62], added by Laws of. 1910, chap. 38, as amd. by Laws of 1912, chap. 292).
This is a suit in equity for the specific performance of an agreement in writing made by the appellant, William Horsley, on the 8th day of February, 1913. The plaintiff claims the right to enforce the agreement by virtue of certain assignments. He alleges that in the month of February, 1913, one Selznick, mentioned in the agreement, duly assigned all his right, title and interest, therein to one Burt, who in the same month duly assigned all his right, title and interest therein to the plaintiff. The agreement is as follows:
"In consideration of $1.00 receipt whereof is hereby acknowledged, William Horsley, of Hew York City, agrees to sell to Lewis J. Selznick, of Hew York City, 500 shares of common and 500 shares of preferred capital stock of the Universal Film Manufacturing Company, a Hew York corporation, par value of said shares being $100 each, for the sum of $40,000, on the following terms and conditions: $10,000 in cash to be paid on Monday, February 10th, on the payment of which he is to receive 125 shares of the preferred and 125 shares of the common. The balance of the payments to be paid $1,000 monthly by the execution of collateral notes of $1,000 each payable monthly with six per cent (6%) and have thereto attached 25 shares of the stock. The said notes to be deposited at any bank or trust company that may be agreed upon between the said William Horsley and Lewis J. Selznick.
" In witness whereof the parties hereto have hereunto set their hands and seals this eighth day of February, 1913, in the presence of Witness E. H. Underhill.
" WILLIAM HORSLEY."
The motions for judgment on the pleadings present the questions as to whether the complaint shows a valid contract enforcible in equity as between William Horsley and Selznick, and if so, whether it is enforcible at the instance of the plaintiff.
Hot only is there a failure to allege that the plaintiff assumed the obligations of Selznick as between him and his assignor but the complaint contains no allegation with respect to any agreement between the plaintiff and William Horsley by which the former accepted or became bound to perform the obligations of Selznick, if any, under and by virtue of the agreement, and, therefore, Horsley could not have enforced the agreement against the plaintiff. It is now the well-settled law in this jurisdiction that a court of equity will not require specific performance of a unilateral contract against the party who has executed it at the instance of another party thereto who is not likewise obligated to perform. (Levin v. Dietz, 194 N. Y. 376; Stokes v. Stokes, 148 id. 708; Ide v. Brown, 178 id. 26; Wadick v. Mace, 191 id. 1.) That rule has been extended by Genevetz v. Feiering (136 App. Div. 736) wherein it was held that the assignee of a contract who has not assumed the obligations of his assignor thereunder is not entitled to specific performance although he alleges readiness, willingness and ability to perform . the obligations of his assignor. The decision last cited is authority for refusing specific performance at the instance of the plaintiff even if the original assignor, Selznick, could have maintained such an action. The contract was doubtless assignable and the assignee could maintain an action at law for a breach thereof, but it does not follow that a court of equity must entertain jurisdiction at the instance of an assignee who, if his assignor be in default, is not bound to perform for that would often require two trials of the same issue. There would be one trial to see whether the defendant or the assignor was guilty of a breach, and if the former, then that trial would go for naught and the defendant would be obliged to sue the assignor, who would not be bound by the first judgment. (Suydam v. Dunton, 84 Hun, 506.) It will thus be seen that there is justification for a court of equity refusing to entertain an action for specific performance by an assignee of the contract who has not assumed the obligations of his assignor.
Moreover, the plaintiff, I think, fails to show that Selznick became bound by the agreement, which at most was an option given by William Horsley to him to purchase the stock on the terms specified. The assignment by Selznick was after the time for acceptance and performance, and the only acceptance or tender of performance claimed is by him. Upon no theory was the agreement binding upon Selznick at the time of its execution, for he did not agree to perform (Levin v. Dietz, supra; Stokes v. Carpenter, 166 App. Div. 441), and even had he signed it, it could not be construed as obligating him to perform. (Booth v. Milliken, 127 App. Div. 522.) Assuming, however, that it was a valid option, the plaintiff fails to show that it was duly accepted by Selznick or that the latter duly tendered the cash payment of $10,000 and the notes and offered to agree with respect to the depository and to perform at the time specified in the writing therefor. There is no allegation that Selznick ever communicated to William Horsley any acceptance of the option, or tendered to him the said payment or offer to perform at the time specified or at any other time. On the assumption that the agreement constituted a valid option it specifies no place of performance and it was, therefore, incumbent upon Selznick to tender performance to William Horsley at the time specified and that is not shown. The plaintiff attempts to establish an acceptance and a tender of performance on the part of Selznick by alleging that it was agreed between him and William Horsley that the payment of the $10,000 and the delivery of the notes and of the stock was to take place in the room of the plaintiff at the- office of the defendant, Universal Film Manufacturing Company, on the 10th day of February, 1913, and that Selznick on that day duly attended at the place specified with $10,000 in cash and was then and there ready to execute the notes and receive the stock and was in all things prepared to carry out each of the terms of the agreement on his part, but that William Horsley failed to appear at said time and place or at any time for the purpose of carrying out the terms of the agreement. I am of opinion that these facts, if proved, would not show an acceptance of the option by Selznick or a due tender of performance on his part. It does not appear whether this agreement with' respect to the place of performance was in writing or rested in parol, but that is immaterial, for no consideration is alleged therefor, and, therefore, William. Horsley, even if bound by the agreement in writing on account of the recital therein of a nominal consideration, was not bound by the supplemental agreement with respect to the place of performance. Horsley's failure to appear was notice to Selznick that he did not deem himself bound by the agreement with respect to meeting Selznick. (See Levin v. Dietz, supra.) The plaintiff does not' allege when the supplemental agreement was made but it is fairly to be inferred that it was subsequent to the agreement in writing for otherwise it is a reasonable assumption that the place of performance would have been specified therein. The nominal consideration specified in the writing, therefore, if otherwise sufficient, cannot be extended to constitute a consideration for the supplemental agreement. The plaintiff, therefore, fails to show a cause of action for specific performance within the authorities holding that a valid option when duly accepted may be specifically enforced in equity. (See Jones v. Barnes, 105 App. Div. 287; Carney v. Pendleton, 139 id. 152; Bullock v. Cutting, 155 id. 825; Stokes v. Carpenter, supra.)
For these reasons and regardless of the other questions that have . been argued I am of opinion that the plaintiff fails to show a cause of action for specific performance. It follows that the orders appealed from must be reversed, with separate bills of costs on the separate appeals, and each motion for judgment on the pleadings granted, with ten dollars costs.
Scott, Dowling and Davis, JJ., concurred; Smith, J., dissented.
Since amd. by Laws of 1913, chap. 779.—[Rep.