Court Opinion

ID: 6427356
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:05:06.771741+00
Date Added: 2024-06-11T15:52:03.003436
License: Public Domain

Holmes, C. J.
This is an action by a member of the defendant corporation, counting first for $1,000 upon the covenant contained in his certificate of membership, and secondly on an account annexed, which is for the money paid by the plaintiff *17for and under the certificate. The first count was disposed of by the decision reported in 172 Mass. 533. The right to recover on the second now is argued on the footing that the defendant declared a forfeiture of the plaintiff’s stock without right, and that therefore the plaintiff at his election may treat the contract as repudiated and annihilated as if from the beginning, and may recover the consideration which he has paid. The case comes here by report after a ruling that the plaintiff could not recover. The first count being on the contract and the second being on a supposed right which depends on the annihilation of the contract at the plaintiff’s election, it is a little hard to see how the plaintiff can press the second after having gone to trial and done his best to recover upon the first. Whiteside v. Brawley, 152 Mass. 133,135. But we will pass to the other considerations in the case.
The report states that “ no question arises as to the pleadings.” We should suppose this to mean that the ruling of the court was on the substance of the case and not upon any question of form. We hardly should take it to open an argument that the plaintiff had a cause of action for the withdrawal value of his certificate, a matter quite different from the subject of either of the counts. That would be a claim under the contract of a different nature from the one set up in the first count, and of course it would be different also from the claim in the second count. The plaintiff does not attempt to make out a case of that new kind, and it is questionable whether if he did he could succeed. After being informed that the amount standing to the credit of his certificate was $690.38, he had written in a threatening tone a letter which implied that he insisted on being paid a thousand dollars. A conciliatory reply stated that if he desired the withdrawal value of his certificate the defendant would send a withdrawal blank. The plaintiff answered, it is true, that he desired the withdrawal value of his certificate, but the letter indicated pretty plainly that he meant by this the whole thousand dollars. His conduct showed that that was what he intended to get. The application returned to him was not signed, and he said nothing for nearly a year, when again he pressed for a thousand dollars. Whether he ever did anything sufficient to indicate that he wanted the withdrawal value we need not consider further.
*18We find it still more difficult to see how the plaintiff can recover as upon a rescission. The plaintiff says that the defendant was wrong in supposing that his stock was forfeited. The plaintiff made default in a monthly payment due on the last Saturday of January, the 26th. A notice was published on July 11 to all stockholders “ who are in default for six months or more in the payment of dues ” etc. to pay in sixty days under penalty of forfeiture. Without considering what could be said on the other side, we assume that the notice was a condition of the power to forfeit, that it did not hit the plaintiff as his default was a few days less than six months before July 11, and that the defendant was wrong. But all that the defendant did was to notify the plaintiff that his stock was forfeited, seemingly under a bona fide belief that he fell within the class described in the notice. It would be straining the facts and the law to say that this imported a refusal, before any demand, to pay any sum under the policy even if the defendant’s mistake should be pointed out, and that therefore it was a repudiation.
A mere refusal to pay money when due, especially a -refusal based upon the terms of the contract and in good faith although mistakenly believed to be justified by it, is not a repudiation of the contract and does not warrant a rescission. The only remedy is a suit upon the contract, not a suit for the consideration. This is clearly the law in the case of a failure to pay the price after a sale and delivery of goods. Martindale v. Smith, 1 Q. B. 389. The law would seem to be even clearer when, as here, the plaintiff has had the rights of membership in the defendant company for five years, not to speak of his having elected to insist upon his covenant, as we mentioned at the outset. Conduct going no further than the defendant’s might not justify even a refusal of further performance on the other side, Mersey Steel & Iron Co. v. Naylor, 9 App. Cas. 434, a right which must not be confounded with rescission, and which in some cases is more easily made out. Boston Deep Sea Fishing & Ice Co. v. Ansell, 39 Ch. D. 339, 365. Stubbs v. Holywell Railway, L. R. 2 Ex. 311, 314. In True v. Bankers' Life Association of Minnesota, 78 Wis. 287, the question of the form of the remedy does not seem to have been brought to the attention of the court.
As in our opinion the contract between the parties has not *19been ended, there is a further ground upon which their case is disposed of, which we thought in our earlier decision that it would not be necessary to consider. The certificate is granted in consideration, among other things, of “ full compliance with the Terms and Conditions printed on the back, ... all of which are hereby referred to and made a part of this contract.” One of the conditions is that “ Any action brought against this Association by any Shareholder shall be brought ... in the County of Ontario, State of New York.” We are of opinion that this condition should be enforced.
We do not mean to overrule Nute v. Hamilton Ins. Co. 6 Gray, 174, but it is obvious that that was a somewhat hesitating decision, and we think that it should not be pressed so far as to dispose of this case. Here we are dealing with a New York corporation, most of whose members would live in New York, and the greater part of whose dealings and contracts naturally would take place also in New York. There, we take it from Greve v. Ætna Live Stock Ins. Co. 81 Hun, 28, which was put in evidence, the condition would be an answer to an attempt to sue in another county. The condition, at least so far as we have occasion to consider it, refers to suits by members of the corporation as such. It is perfectly reasonable, and as applied to a New York corporation in view of the New York law cannot be held contrary to the policy of Massachusetts with regard to such contracts as happen, by the accidents of post-office communication, to be concluded on this side of the boundary line. The language is different from that used in Nute v. Hamilton Ins. Co., and stronger. It plainly purports to attach a condition to the contract, and we are of opinion that it does so effectually. It is not intimated in Nute v. Hamilton Ins. Co. that when such a condition is attached to a contract and is valid, there is any technical difficulty in enforcing it as an answer to an action in another place.
It is true that in this case the question is not between counties but between States, and that our decision requires a resident of Massachusetts to go elsewhere for a remedy upon a contract made here. Reichard v. Manhattan Ins. Co. 31 Mo. 518, 520, 521. But objections of this sort may be made to appear more serious than they are. Courts are less and less disposed to in*20terfere with parties making such contracts as they choose, so long as they interfere with no one’s welfare but their own. The plaintiff might have given his money to the corporation if he had seen fit. We see no reason why he might not give it upon such partial return as he was content to accept. It will be understood that we are speaking of parties standing in an equal position where neither has any oppressive advantage or power, and that our decision as to the validity of the condition as a defence does not go beyond the particular circumstances of this case. See further Matter of New York, Lackawanna & Western Railroad, 98 N. Y. 447, 453 ; Heslin v. Eastern Building & Loan Association, 28 Misc. (N. Y.) 376; Carpenter v. Shepardson, 43 Wis. 406, 413.

Judgment for the defendant.