Court Opinion

ID: 6429438
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:06:52.161728+00
Date Added: 2024-06-11T15:52:07.795953
License: Public Domain

Knowlton, C. J.
The rights of the parties in this case depend upon the meaning of the contract contained in the two papers signed by the plaintiff and delivered to the defendant, bearing date January 1, 1903. The second of these papers relates to coupons annexed to bonds referred to in the first paper, and it was to have effect only upon condition that the defendant exercised the option to buy bonds given him in the first paper. It is therefore of but little consequence as an aid in the construction of the first contract.
The contract contained in the first paper is the giving of an option by the plaintiff to the defendant, to remain open through February 10, 1903, which option was “the right to purchase ”, from the plaintiff as trustee, certain bonds to the amount of $700,000; face value, at the price of seventy per cent of their par value, with accrued interest after the date of the contract. In the first clause of the contract the plaintiff also agrees “ that in case this option is accepted by said Hitchings, as hereinafter provided,” he will endeavor to procure the sale and delivery of $50,000 more of the same kind of bonds, or such part thereof as he can obtain control of, at the same price. In the second clause, “in case this option is taken up as hereinafter provided,” he makes an agreement to sell at a certain price stock of the company that issued the bonds. In the third clause there is an agreement of the plaintiff to sell certain other bonds of the same kind, at the same price, “ in case this option is accepted by said Hitchings, as hereinafter provided.” Plainly, the option referred to in each of these clauses is the right to buy the bonds to the amount of $700,000, face value, referred to in the first clause, and “accepted ... as hereinafter provided!’ means accepted within the time that the option is to remain open under the ninth clause, which is through February 10.
The fourth clause contains an agreement of the plaintiff to use all reasonable effort to help the defendant get $187,000 more of the same bonds then outstanding in the hands of various parties, and this agreement is only “ in case this option is accepted by said Hitchings.” The option referred to here is the same.
The fifth and sixth clauses give the defendant the right to *78buy certain treasury bonds of the same kind, with certain treasury stock, at prices stated.
The seventh clause, upon which the plaintiff founds his suit, is as follows: “ It is also expressly understood that said Hatchings is to purchase upon accepting this option $20,000 of said bonds out of said above mentioned lot of $59,000 the purchase price to be seventy per cent of the face value thereof, proceeds of said sale to be applied to the payment of certain debts of said Rio Grande Company.” The lot of $59,000 is the one referred to in the third clause of the contract.
The contention of the plaintiff is that the words “ upon accepting this option ”, in the seventh clause, mean upon the delivery and acceptance of the writing, which purports to give an option to be exercised on or before February 10. He contends that the obligation of the defendant to purchase bonds to the amount of $20,000 became absolute immediately on the delivery and acceptance of the paper. He thus gives the words “ this option ”, in this clause, a meaning different from their obvious meaning in every other part of the contract. The bill as originally drawn was plainly founded on this construction of the contract, and the two amendments do not change it in this particular.
The defendant, on the other hand, contends that accepting this option, in the seventh clause, means the same thing as the similar language in the first, second, third and fourth clauses of the contract, namely, the election to purchase $700,000 of bonds, upon which everything else is made to depend. The third clause, in which the words are plainly used in that sense, refers to the sale of the same lot of bonds which are to be purchased under the seventh clause if the option is accepted. In the ninth clause the word “option” has the same meaning. Looking for a moment at the second writing, the plaintiff’s agreement in reference to the coupons upon this lot of $59,000 is made conditional upon the purchase of the bonds by the defendant. This is inconsistent with the existence of a contract of purchase which was absolute the moment that the writing was delivered and accepted.
While the case is not free from difficulty, we are of opinion that the construction contended for by the plaintiff is not correct. It seems a strained and unnatural view to hold that the words “ this option ”, in the seventh clause, mean a paper writing, *79while in every other part of the instrument they mean the right to purchase certain specified property within a stated time at a stated price.
The averments in the amendments to the bill have little bearing upon this point. They are intended to relieve from the defence of the statute of frauds, and to show how the parties interpreted the contract. In the view that we take of the. case the statute of frauds becomes immaterial. A payment of $100 by the defendant to the plaintiff, or at his request, as a part of the purchase price of the bonds referred to in the seventh clause, made at some tyne after January 1,1903, and before February 10, 1903, does not bind the defendant to purchase these bonds, if he elected not to accept the option. This is conceded by the plaintiff upon the interpretation which we give to the word “option.” The plaintiff relies upon the averment as showing the defendant’s construction of the contract; but if the contract means what the plaintiff contends that it means, the defendant should have taken and paid for bonds to the amount of $20,000 on the delivery of the paper. The conduct of the parties, taken as a whole, tends to support the defendant’s rather, than the plaintiff’s construction of the contract.

Bill dismissed.