Court Opinion

ID: 8793444
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:00:25.059419+00
Date Added: 2024-06-11T17:03:29.480195
License: Public Domain

CARLAND, Circuit Judge
(dissenting as to result). The majority opinion declares: .
“It is, therefore, no defense to an action against one of the subscribers for his breach of his contract that the telephone company became insolvent and the bonds worthless after he made his contract; much less is it a defense to a subscriber who, like Mr. Busch, has performed four-fifths of his undertaking ana received four-fifths of its fruits. Peck Colorado Co. v. Stratton (C. C.) 95 Fed. 741; Otis v. Cullum, Receiver, 92 U. S. 447, 23 L. Ed. 496. The subscribers might have provided in their agreement that they should be released from their undertaking in case the company became insolvent or the bonds became worthless or depreciated in value. They did not do-so, and the reason is manifest. It is that the very purpose and object of the agreement was to insure the telephone company against that contingency, and by their contract the subscribers agreed that either by a sale to others or a purchase themselves they would insure the company the receipt of the par value of the bonds for which they subscribed, however worthless they might become. They agreed to assume the risk of the depreciation of the-*335bonds for the chance that their prospective value, the value of their commission of 3 per cent, in cash and 40 per cent, in stock of the telephone company, would more than remunerate them for their undertaking; and it is no defense that their expectations have not been realized or that their trade turned out a bad bargain.”
I concur fully in this clear and forcible statement of the law, and hence I fail to comprehend the opinion of the majority when as a result of the court’s opinion it declares that the measure of damages is the difference between what Busch agreed to pay for the bonds and stock and what the actual value of the same may be shown to be at the trial. The only defense that plaintiffs in error made at the trial, upon the question of damages, was that the bonds and stock had become worthless by reason of the insolvency of the corporation which issued the same. The reasoning of the majority opinion in the language above quoted necessarily results in the affirmance of the judgment below, which I believe would be entirely correct, and for this reason I dissent from the conclusion reached in the opinion of the court.
If I buy bonds and stock at par to-day, I may not, in the absence of a special warranty or fraud, defend to-morrow on the ground that the stock has fallen to SO cents.