Court Opinion

ID: 6474307
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:33:39.191091+00
Date Added: 2024-06-11T09:12:46.507552
License: Public Domain

CUNNINGHAM, J.
(Dissenting). — I am not content to agree with the majority opinion in so far as the rule applicable to the defense of failure, or absence of consideration, when applied to the facts of this case, presented an occasion for the decision of a jury. The majority opinion holds that as between parties to the note and their privies, such defenses may be interposed, in which I concur.
Such defenses, in substance, were interposed to this action, and plaintiff, appellant concedes and offered testimony to establish that an original note was given by appellee W. H. Wilky, payable to “myself” and indorsed by the maker, and delivered to appellant; that the purpose of the note was to represent the consideration the maker agreed to pay for 1,000 shares of corporation stock; that the parties intended that the stock should be delivered only upon payment of the note; that the note was transferred to a holder without notice, and the stock involved was issued in the name of such holder by the corporation, and by the holder annexed to the note; and that the note matured and the maker, Wilky, did not pay. Hurley paid the note in the hands of his indorsee, took over the certificate of stock annexed thereto, which was then indorsed in blank by the party to whom it was originally issued. Wilky and his wife made this note in suit, in lieu of the old note and for the same purpose, and delivered it to Hurley, and Hurley held the new note and the stock certificate with such note until the new note matured. After maturity, Hurley sued upon the note and retained the certificate of stock, and concedes that he still, retains possession of such certificate of stock.
*53This is not a suit in equity for specific performance of a contract, nor is equitable relief demanded by either party to the action. A judgment in favor of the plaintiff would leave the stock in plaintiff’s possession and also a right to enforce by execution the judgment recovered, which would mean that plaintiff, Hurley, would be permitted to retain his stock and receive pay for the identical stock. If the defendant ever received any kind of valuable consideration for his note, such consideration remained in plaintiff’s possession, and the word “received” is without meaning. Of course, defendant could pay the judgment and trust to Hurley to give him the stock, and I have no doubt defendant would get the stock after he made such payment, and perhaps would not be required to resort to a lawsuit for that purpose. Had he paid the first note in Dr. Wylie’s (Hurley’s indorsee’s) hands, he would have received the stock, no doubt, and nad he paid the new note in Hurley’s hands, he would have received the stock, no doubt, and in either supposed case, after the note should have been paid, if the party to whom payment was made had received the money in payment and refused to deliver the stock, delivery may have been enforced, or the money paid recovered.
The delivery of the stock and payment of the purchase price are shown to be the terms of the transaction, and require concurrent performance. When the note was not paid, the seller was under no duty to deliver the stock. Likewise When the stock was not delivered, the maker of the note was under no duty to pay the note. The payee of the note shows no inclination, up to this time, to tender a delivery of the stock, nor to keep good such tender in the usual manner, but he insists that the stock is held as collateral security for the payment of the note. Clearly no consideration exists for the note in such event, and the evidence of the plaintiff is conclusive of that fact.
The defendants are conclusively shown to have received absolutely nothing for their note. They were promised nothing for their note — the extent of plaintiff’s promise was to deliver to defendant W. H. Wilky 1,000 shares of stock, not in consideration of the note, but in consideration that Wilky pay $2,000 pursuant to the terms of the note — promised that when the consideration should be paid, the stock *54would be delivered. Evidence of sueb contract is conclusive evidence of absence of consideration other than a promise for a promise; and, as between the original parties, conclusively shows that neither plaintiff nor defendant is in default until one party to the contract is ready, willing and offers te perform.
Under the conceded facts the defendant agreed to buy and pay for 1,000 shares of stock. He gave his note as evidence of his promise, but he indicated no intention of buying such stock until the time for the payment of the note arrived. The plaintiff agreed to sell the defendant the said shares of stock in consideration of receiving $2,000 therefor at the date specified in said note. The transaction, in my opinion, was in law an executory contract of sale, by which the parties agreed that the contract would be executed, the stock delivered, and the consideration therefor paid on the date specified in the note for payment of the note. The defendant failed to pay the consideration. The plaintiff was under no duty to deliver the stock, but the defendant was under no-duty to pay the note; he could refuse to buy and answer for the consequences.
When the defendant failed to perform his part of the contract of purchase, he was guilty of a breach of that contract. Plaintiff could sue for damages for the injury suffered; could offer performance on his part, show that he was ready and willing to perform on his part, and sue on the contract for the consideration promised; or, he could treat the contract as rescinded,, return the note, and retain the stock. If plaintiff elected to sue for the breach of the contract, his damages would be the difference between the price defendant agreed to pay for the stock and the market value of the stock at the time the contract was breached. If he elected to recover on the contract as for performance on his part, he would be required to show that the stock was delivered, or that some act was performed by plaintiff equivalent in law to a delivery of the stock to defendant. If plaintiff elected to treat the contract as rescinded, his obligation to deliver the stock was at an end. The plaintiff has pursued neither of the courses mentioned, but has sued to enforce payment of the note as-a contract duly performed on plaintiff’s part, and does not *55sue to recover the promised consideration for the stock. Clearly defendants cannot be held to have received any consideration for their note until they receive the stock, and they have elected not to buy that stock.
The plaintiff was required to show a right to recover, and until he did show a right prima facie he had the burden of proof. The error was in the failure of the court to instruct the jury to return a verdict for the defendants, because plaintiff failed to maintain the burden and establish a right to recover on the note sued.
The error complained of, viz., the instruction said to have misplaced the burden of proof, is harmless, because in no event under the evidence could the plaintiff recover upon the cause of action he asserts.
The judgment ought to be affirmed.
[Rehearing granted April 29, 1916. For opinion on rehearing, see post, page 270, 158 Pac. 639.]
On statements regarding the future and future promises as fraud, see notes in 35 L. R. A. 420, 437; 10 L. R. A. (N. S.) 640; 24 L. R. A, (N. S.) 735.