Court Opinion

ID: 6575282
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:33:41.969867+00
Date Added: 2024-06-11T15:57:04.242140
License: Public Domain

The opinion of the court was delivered by
Red field, Ch. J.
I. We have spent no time upon the question of variances between the declaration, and the contract, since the defendant’s counsel admit, that o'ne of the counts in the declaration is unobjectionable on that ground, and more perhaps, if the contract is construed to contain mutual promises, which is the next point made. If one count is good in this respect it is sufficient.
II. We think the contract is somethingmore than what is termed a mere refusal of the property by defendant, leaving it optional with plaintiff, whether he will take the property, within a certain time or not. Such a contract, unless upon some other consideration, or under seal, would probably not be regarded, as valid, in law, for want of consideration. But it was intended, by the parties to this contract, as appears by its very terms, to have it upon consideration. And it seems to us, that the contract, in termsj con*458tains a stipulation, on the part of the plaintiff, to deliver the stock, by the first of July, 1850. And that if he had declined doing so, an action would lie upon the contract, for the refusal to do so. The terms are, “ to be delivered, to me, by D. F. Faulkner on or before the first day of July next,” and this is signed by both parties. We think the intention of the parties was, that both parties should be bound to do what is specified in the contract to be done on his part.
III. But, by the terms of the contract, as it seems to us, the delivery of the stock, and the conveyance of the property, stipulated to be conveyed, on the part of the defendant, were to be concivrrant acts. And although the plaintiff by the terms of the contract, was first to move in the premises, so far as to manifest a readiness to convey, we do not deem it reasonable, inasmuch as the one promise is the entire consideration of the other, to hold, that either party was bound to absolutely convey his property, except upon the conveyances, by the other. The import of the contract is, that each shall convey to the other, at the same time, but the plaintiff has the privilege of naming any time, before the first day of July next, and if he do not, it shall be done upon that day. In regard to this class of contracts, it is a settled rule, that neither is obliged to convey absolutely, if the other declines conveying, on his part. The other party is then restricted to his remedy in damages. But the party claiming damages must either show a readiness, and offer to perform on his part, or else that he was excused therefrom, by the consent or conduct of the other party. We conclude, therefore, that the plaintiff was not bound absolutely to part with his property, except upon the receipt of a conveyance from defendant. Such a rule of construction would make the contract unequal and unjust and we ought not to give the contract such a construction, unless its terms so clearly speak, which is not the case.
The plaintiff then, as it seems to us, was not bound to part with the title of his stock unless he obtained the stipulated pay. It was not a case of credit, or independent promise on either part. And the proof does not show any consent by plaintiff to part with the title of the stock, or of the defendant to receive it. Wedgewood, the person to whom the certificates were sent, was at most amere stakeholder, or agent for both parties, but strictly he was the plain*459tiff’s agent, and evidently so viewed by both parties; and therefore although the stock was on the company books transferred to the names of defendant and his agent, still there was no such actual delivery to defendant, as would vest any legal property in him in his own right. The most that could be claimed would be that the plaintiff having done this, by defendant’s direction, might, at his election, treat the title of the stock, as "having passed to defendant. But I think this even will not follow, from what was done. The plaintiff then was entitled to recover, if at all, the difference between the value of the stock at the time, and the property stipulated to be conveyed by defendant, and the judgment must at all events be reversed for this cause.
IV. But the important question in 'this case is, whether the plaintiff can recover at all. The finding of the jury negatives all fraud or intentional misrepresentation, on the part of the plaintiff, or even knowledge of the circumstance, which it is claimed should exonorate the defendant from his contract. The only question, then is, whether the parties were under such a mutual misapprehension, in regard to the actual state of the subject matter of the contract, at the time of entering into it, as will relieve the defendant from the obligation of it. This is a familiar ground of relief from the performance of contracts in a court of equity, and as a general thing confined mainly to that forum. But in some few cases it has been allowed, as a defense, at law. The case of Ketchum v. Catlin, 21 Vt. 191, has perhaps gone .to the full extent of such'relief, in a court of law, and may be regarded as laying down the law, as it now stands,(in regard to defense at law to contracts, on the ground of mutual misunderstanding in regard to the state of the subject matter at the time. And this case goes upon the ground, that to constitute a defense at law such subject matter must be so changed, at the time of the contract, without the knowledge of either party, as not in any sense to answer the purpose, for which the contract was made. This mode of defense goes upon the ground, that if the party buys one thing, or a thing, in one state, he is not bound to accept of a different thing, or the same thing, in a different state. If property is sold, as being in existence and in fact has been destroyed, or changed state, the sale will be inoperative.
But any accidental occurrence, not directly affecting the state *460or quality of the thing sold, but only its market value, will have no such effect. News of peace or war, or commercial restrictions, or the repeal of such restrictions, or their modification, has often a most surprising effect upon the market value of commodities, but whether both parties, or one only, is ignorant of such facts, which renders the matter more unjust and unequal, is no ground of relief even in equity, unless the one party gaining the advantage, is guilty of artifice, or misrepresentation. The rule of the civil law was somewhat different and more in accordance with the rule of moral justice and equity, than that of common law. This has been with some writers a ground of reproach to the common law, as being less in accordance, with the principle of Christian morality, than the.law of pagan Greece and Rome. But the case put in Cicero de officiis is of this character, where the two cargoes of corn coming into Rhodes, in time of famine, or great want, and the one first reaching port, knowing of the near approach of the other, with a large supply, the question is whether the first is bound, before he sells his cargo, to make known the probable early arrival of the other ? The Roman casuist decides that he is, and so must a Christian moralist; but the common law will not allow any such determination, in a civil tribunal!
So too, stocks may be affected, by general legislation, by the granting of other charters, by governmental negociations, by war, or peace, by the management of the corporations, by the result of an election, by the death of an important financial agent, and by a thousand other accidental matters. The question is, whether such mere accidents, not affecting the inherent quality of the stocks or essentially their actual value, can be said to create such a change of state, as to justify the vendee in refusing to go forward with his contract. I have not been able to find any such case, and the books are filled with those of an opposite character.
Had this vote of the directors cancelled, or annihilated the stock, it would no doubt have been a good ground of defense to this action, within the principle of the best considered cases upon the subject. But so far from that, it did not affect the stock in any sense, except incidentally, by its increase at alow rate. This had three accidental effects upon all the stock of the company. 1st. It showed the company to be embarrassed, if not desperate, which of itself had a tendency to lessen the market value of the stock, *461but not its real value. 2d. It showed the probable opinion of the directors . that the stock was net worth much above $30, which would have a similar effect. 3d. If it whs a legal act it did tend to lessen in some degree the actual value of the stock, by letting in those who paid but $30, to an equal participation in the profits of the company, with those who paid $100. But if this was a legal act it was one, which fhe defendant was bound to know the directors might do, and which would therefore form one of the contingencies of his purchase, and. which, whether, done before or after the actual time of 'sale, could no more affect the validity of the sale, than any other legal act of the directors. If. the act was an unlawful exercise of authority, by the directors, the defendant when he became a stockholder mightresist'it, in any legal way.
The length of time given the plaintiff to deliver the stock must have involved the hazard of the directors doing many things, which might affect the stock, and indeed, every legal act certainly, and illegal acts would not bind the stockholders. We do not see how this will form ahy defense to the suit, there being no fraud or misrepresentation. '
Judgment reversed, and case remanded.