Court Opinion

ID: 7980294
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:04:34.254636+00
Date Added: 2024-06-11T16:35:00.303396
License: Public Domain

Holt, J.
(dissenting).
The situation and the claims of the parties are clearly and concisely stated by Justice Dibell, but the result reached does not appeal to me as right nor compelled 'by the doctrine invoked. The findings and record accord to defendant the utmost good faith in all his dealings with *450plaintiff and its officers, his associates Peterson and Pitts, save in this, that, between the time he made the contract to purchase the option of plaintiff and the time he took it out of escrow by payment, he ascertained that he could obtain a royalty from Quinn in addition to the $15,000 which, when the contract was executed, he had told Peterson and Pitts was the highest amount Quinn would pay.
From the beginning defendant refused to be an officer of plaintiff, but, concede that he was in the same condition as if 'an officer, he could, nevertheless, properly enter into a fair contract with the corporation. Minnesota L. & T. Co. v. Peteler Car Co. 132 Minn. 277, 156 N. W. 255. It seems to me the contract he did make was fair, and, under all the circumstances, fairly made. When it was entered into there was hope and belief, but no certainty, that defendant would be able to dispose of the option thereby transferred to Quinn so that he could pay $8,000 to the corporation and get sufficient to pay the whole or most of the claim that he held against it. plaintiff was then at that stage where it was evident to all that no profit could be realized for the stockholders. It was a question of saving something for them and paying the liabilities. Defendant stood a chance of losing a large sum which he alone had risked in exploring for ore under the option, and, unless he was willing to make the effort to realize something therefrom, all concerned would certainly sustain a loss. In order to be able to realize the amount defendant was to pay under the contract, it was, no doubt, clearly understood that he would have to -sell and dispose of the option. The contract so indicates. In order to dispose of the option to Quinn he had to secure a modification of its terms, and incur certain personal obligations. The option he transferred to Quinn was in a more valuable state than when transferred to him. It was, no doubt, well understood that for the efforts he was to make he stood the chance of loss or gain. The contract was deliberately made by plaintiff and its officers. It was completely executed and irrevocable as to them. It could not be taken out of escrow or recalled by them because of anything thereafter developing. It contains no provision looking towards its cancelation by plaintiff, if defendant could dispose of the option at a bigber price than the one he had represented that Quinn might be induced to give.
*451- Suppose defendant had gone to plaintiff’s officers 'and informed them that he had succeeded in obtaining twice the price and twice the royalty that he did 'obtain, would plaintiff have 'been in a position to recall the escrow? I think not, under the finding that defendant had exercised the utmost good faith and 'had disclosed all that was known to him, as to the probability of his being able to dispose of the option and for what price, when the contract was signed and placed in escrow.
It is clear to me that the parties dealt at arm’s-length, not only when the contract was negotiated, but also intended that when it was put in escrow it terminated all confidential relations that ever existed, so that as to what was developed thereafter and 'as. to- any knowledge or advantage thereafter gained, no obligation rested on defendant to disclose it. Neither the contract nor any tacit understanding required defendant to sell the option to Quinn or to any one.' Suppose he had taken it over himself and successfully mined so as to make many times the profit now made, would that have given the plaintiff a cause of action? It would seem not. Again, suppose he had not succeeded to dispose of the option to Quinn, but had sold it to some one else for a 'better price and better royalty than he did obtain, could this action have been maintained? The answer must be the same, for even if he had informed plaintiff and Peterson and Pitts that he had made such a sale, before he took the contract out of escrow, I see no way in which he could have been prevented from holding onto a bargain fair and just when made. On the findings of fact as they stand I think defendant is entitled to judgment.