Court Opinion

ID: 8191854
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:14:54.889213+00
Date Added: 2024-06-11T16:40:38.279623
License: Public Domain

Vinje, J.
The appellant claims, first, that the contracts-were mere options; second, that they were too vague and indefinite to be enforced in law; and third, that the second contract is illegal. The first two claims can best be negatived’ by the language of the second contract itself. It reads-:
“Now, therefore, the parties of the first part, for and in: *438consideration of tbe covenants hereinafter contained, hereby agree that they will make diligent efforts to purchase all of the outstanding merchandise claims of Leflys on a basis of fifty cents ($.50) on the dollar ($1) and-will furnish the money therefor; that as soon as the said parties of the first part have succeeded in obtaining, either by purchase or by agreement to accept said percentage or otherwise, fifty-one per cent. (51 %) of said outstanding unsecured claims in number and amount, that said parties of the first part will forthwith perform said escrow agreement and forthwith assume the obligations of said parties of the second part therein mentioned and relieve them of all further liability thereon, or will forthwith cause to be submitted the composition hereafter mentioned.
“In case said parties of the first part shall find it impossible to obtain fifty-one per cent. (51 %) of the outstanding unsecured claims of Leflys at fifty cents ($.50) on the dollar ($1), they will furnish the money for a composition to be offered by Leflys in bankruptcy of fifty cents ($.50) on the dollar ($T) ; that if said composition is approved by the court, that upon said approval said parties of the first part will forthwith perform said escrow agreement, assume liability of said parties of the second part therein mentioned, and relieve said parties of the second part of all liability thereon.
“In case the property of said Leflys shall go to a bankruptcy sale, in that event said parties of the first part agree to bid therefor at said sale, and in case they or either of them shall purchase said property or any part thereof at such sale or shall obtain any interest of any kind, either directly or indirectly, in said property through said sale, they will thereupon perform said escrow agreement, assume the liability of said parties of the second part therein mentioned, and relieve them of all liability thereon.”
We fail to see any vagueness or uncertainty in the language used. It provides in clear specific language just what, the defendants obligated themselves to do. The fact that the contract gave the parties of the second part the option to cancel it upon a certain contingency does not make its performance optional with the defendants.
The claim that the second agreement is illegal because the *439composition agreement therein contemplated provides for the payment; of some of tbe creditors of Leflys in full and of others only fifty cents on the dollar is not tenable. It is true that the agreement, if carried o„ut, would result in those creditors who held paper indorsed by plaintiff and his assignors being paid in full and the others only fifty cents on the dollar. But such payments were not to be made out of corporate funds or property, but out of the individual funds of the defendants. Their individual funds were impressed with no trust in favor of creditors of the corporation. They could use them to pay any debts of the. corporation they chose in full or in part. No creditor could thereby be prejudiced, for any payment made by defendants out of their individual funds would reduce corporate liabilities without diminishing corporate assets. Had the agreement been to pay some creditors in full out of corporate assets, another question would have been presented.
By the Court. — Order affirmed.