Court Opinion

ID: 8744055
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:00:19.956725+00
Date Added: 2024-06-11T17:00:33.982520
License: Public Domain

THAYER, Circuit Judge
(dissenting). I am not able to concur in the foregoing opinion, and accordingly express the reasons for my dissent, doing so with as much brevity as possiblé. The opinion *187of my associates, as I view it, deals for the most part with principles of the law of contract, wliicli, however correctly stated and reinforced by authority, are not in my judgment applicable to the case in hand. By the terms of the agreement out of which this controversy arises the plaintiff below agreed to take certain shares of preferred stock in the Central Building Company “in payment for four installments of rent” under his lease, as the same became due. I can perceive no sufficient reason for saying that the delivery of these shares oí stock did not operate as payment for the four installments of rent, and that the plaintiff merely held the stock when delivered in trust and as collateral security for the rent, as the majority of the court seem to hold. This view is not only opposed to the language of the agreement, which recites that the defendants had requested the plaintiff to take the stock “in payment of four installments of rent,” and that he had agreed to do so, but it is-not in harmony with the conduct of the plaintiff himself, since it appears that lie hypothecated the stock to secure his indebtedness to the Merchants-Láclede National Bank and that it remained hypothecated with (hat institution for at least two months after the defendants’ option to purchase the stock expired; that is to say, for two mouths subsequent to July 1, 3808. In view of the language of the agreement and the conduct of the.parties, I am of opinion that the stock became the absolute property of the plaintiff as soon as it was delivered to him; that it was taken in payment of the rent, and extinguished the same; that the plaintiff had an undoubted rigid to hypothecate it; and that there is no substantial foundation for the novation theory which is outlined in the opinion of the majority. As I feel constrained to construe the contract, the parties entered into the following stipulations: The plaintiff agreed to accept the preferred slock in payment: for certain rent: which was to accrue, his motive being, doubtless, to aid in the construction of a valuable building on the leasehold premises, which would insure the payment of many future installments of rent that were to accrue under his lease, and at the same time greatly enhance the value of his property. On the other hand, the defendants agreed, if the stock was taken in payment of the rent, to purchase it from the plaintiff “on or before the 3 st day of J uly, 1898,” for a sum equal to the amount of rent which it had discharged, and the plaintiff agreed to sell the stock at that price. The result was an executory agreement for the sale of the stock, by virtue of which the defendants had the option to buy it at any lime before July 1,1898, when their obligation to lake it and pay the purchase price became absolute. The plaintiff on his part had the right to call for performance on July 1, 1898, but not before that time. The contract in question is not essentially different from many contracts for the sale of stock and other securities which are daily made, whereby a vendee acquires the right to exact performance at: any time intermediate the making of the agreement and a certain future date, whereas the vendor acquires the right to call for performance only at the latter date. The real question in the case, therefore, as I view it, is not the one stated at the commencement of the majority opinion, and declared to be *188“the most important question”; but the question is whether the plaintiffs admitted failure to tender the stock on July 1, 1898, and to demand payment therefor, released the defendants from their obligation to perform. This was the question which was decided below in the affirmative, and, as I think, rightly decided. This is not a case, as I view it, where a question arises concerning the right of a person, who has accepted and retained the benefits accruing from a substantial performance of an agreement, to decline to pay for what he has received because of some slight default by the opposite party which may be compensated in damages. When the stock was accepted by the plaintiff, it paid for the installments of rent, because such was the express agreement of the parties, and presumptively, at least, the stock was adequate payment. After the stock was delivered the plaintiff held the defendants’ obligation to buy it on or before July 1, 1898, at a given price; but to maintain án action on this obligation it was his duty to do whatever would be required of any other vendor of stock who agrees to sell and deliver the same on a certain future day, or on any intermediate day if the vendee elects to call for an earlier delivery. In such cases the rule is that on the day when the option expires the vendor must tender the stock and demand payment; time being of the essence. To put the vendee in default there must be an offer, of the security sold and a demand for payment, or a waiver of the tender by the vendee. Waterman v. Banks, 144 U. S. 394, 12 Sup. Ct. 646, 36 L. Ed. 479; Norrington v. Wright, 115 U. S. 188, 6 Sup. Ct. 12, 29 L. Ed. 366; Kelsey v. Crowther, 162 U. S. 404, 408, 16 Sup. Ct. 808, 40 L. Ed. 1017; Kelley v. Upton, 5 Duer, 336; Summers v. Sleeth, 45 Ind. 598; Doloret v. Rothschild, 1 Sim. & S. 590; Shinn v. Roberts, 20 N. J. Law, 435, 444, 43 Am. Dec. 636; Stilwell v. Bowling, 36 Mo. 312; Henderson v. Wheaton, 139 Ill. 581, 28 N. E. 1100.
I do not understand that this rule of law is disputed, but the effort seems to be to differentiate the case at bar from those cited, and to show that the rulé is inapplicable, on the ground that the contract in suit was not a contract of sale. Now, on the day when the plaintiff had the right to tender the stock in question and exact payment therefor, no such tender or demand was made. The plaintiff did not even have possession of the stock, but the same was then hypothecated to a third party, and remained in its hands for more than two months thereafter. The letter which was written by the pledgee of the stock on May 16, 1898, did not advise the defendants whether the Merchants-Laclede National Bank held the stock as the absolute owner or as pledgee. Neither did it advise the defendants that the bank was acting as agent for the plaintiff, or request the defendants to appoint a suitable place for the delivery of the stock on the day when the plaintiff 'was entitled to exact payment. The letter was silent on each of these essential points, and for that reason it imposed no liability on the defendants and called for no action on their part. The letter was entirely consistent with the view that the bank had become the absolute owner of the stock; and, if such was the fact, then the defendants were under no obligation to take the stock from it and pay for the same, since an executory agreement like the one in hand *189is not «assignable, and the plaintiff’s assignee could not have enforced performance of the agreement to purchase. Boykin v. Campbell, 9 Mo. App. 495; Lansden v. McCarthy, 45 Mo. 306; Lawson, Cont. § 352. The letter of the bank was at most a mere notice that the plaintiff had parted with the stock, and, as it did not state that the bank was acting as agent for the plaintiff, the natural presumption would be that it was acting for itself and of its own volition. In my judgment, therefore, the letter in question did not alter the legal relations of the parties to any extent; and as there was no waiver by the defendants of their right to have the stock tendered to some one of them on the day the obligation to purchase became absolute, and as no request was made by the plaintiff to have them designate a place for delivery, I am of opinion that the trial court properly held that there could he no recovery, and that the judgment below should be affirmed.