Court Opinion

ID: 9445526
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:31:51.971253+00
Date Added: 2024-06-11T17:30:18.674607
License: Public Domain

POPE, Circuit Judge
(concurring).
I concur in all that Judge Barnes has said in the foregoing opinion, but I should like to add a statement of a further view which I have respecting the merits of the case.
I agree that appellants are wrong in asserting that there was a failure to perform what they call “conditions precedent” to the obligation to pay for the stock; but it is also my view that these elaborate and involved provisions of the contract relating to a method of determining the value of the stock were not conditions precedent at all. Long ago the Supreme Court of California, in language which has many times since been quoted with approval, observed that a court should not construe the stipulations of a contract as conditions precedent unless compelled by the language of the contract to do so since such a construction would often prevent the court from doing justice between the parties.1
Immediately upon the execution of the contract, the certificates for the stock were delivered to Hines. By the time the suit was started two and one-half years had elapsed during which Hines had had himself elected president and had carried on the management of the corporation and many changes had been effected in the affairs of the company. He was then in no position to rescind the contract and return the stock and indeed he made no attempt to do so. His present position that he can sit back and retain the stock and pay nothing because what he calls “conditions precedent” have not been met, would be completely untenable even if it were to be conceded that the elaborate machinery for ascertaining the value of the stock had broken down completely and never been complied with.
If these provisions of the contract mean what appellant says they do, then we have here what is in essence nothing *467more than an agreement to agree at some future time. If that is what these provisions for appraisal and audit mean then this part of the contract is too indefinite to enforce. But one party— Perez — the seller, has performed and has delivered the stock to Hines, who still has it. Under well settled principles of quasi contract the resulting unjust enrichment of Hines warrants a recovery by Perez of the reasonable value of the stock.
In my view the situation here is similar to that discussed by Prof. Williston in his work on contracts. In § 49 (Williston on Contracts, Rev. Ed., Vol. 1), after alluding to a bilateral agreement containing an indefinite promise and a counter promise which is definite, the author says: “It may be supposed, however, that such an agreement is performed either wholly or partly by one party or the other. Let it be supposed first that the promise which originally is definite is performed; this cannot make the indefinite promise enforcible but may give rise to a quasi contractual obligation to pay the fair value of what has been received.” 2
How a very similar situation can give rise to an obligation to pay the reasonable value of personal property actually delivered was referred to by this court in Aitchison v. Anderson, 9 Cir., 183 F.2d 922, 925, involving a contract to sell which provided that the price be fixed by a third person. This court said: “If the third person fails to fix the price under the terms of the contract, without fault of either party, the sale is thereby avoided; but if delivery of any part has been made to the buyer he must pay a reasonable price therefor.”3
Indeed, I think the written contract itself shows on its face that the parties recognized the possibility that an obligation to pay the reasonable value of the stock would arise in the event that the appraisal and audit system collapsed and failed. As I read the contract it says that if audit and appraisal did not bring agreement, and if the attorneys could not agree, then the matter would have to be taken “into any court with jurisdiction thereof”. This makes no sense to me unless it means that if the contract method of audit and appraisal does not work out, it is the contemplation of the parties that the reasonable value of the stock may be recovered by an action in an appropriate court.
The trial court has by its judgment determined the reasonable value of the stock and awarded judgment therefor. It is true that the court instead of awarding an immediate recovery of the full amount adjudged has permitted the defendant to pay in installments. But even if it were assumed that the recovery here would have to be based upon quasi contractual obligation only and a recovery in quantum meruit, yet the form of this judgment and its indulgence of payments in installments, is something of which the appellant is not in a position to complain.

. “Courts are disinclined, as was observed by the Court of Appeals of New York * * * to construe the stipulations of a contract as conditions precedent, unless compelled by the language of the contract plainly expressed. The reason of this disinclination is that such a construction prevents the court from dealing out justice to the parties according to the equities of the case.” Front St. M. & O. R. Co. v. Butler, 50 Cal. 574, 577.

. Cf. Guam Civil Code, § 3441: “Impossible, unlawful conditions void. A condition in a contract, the fulfillment of which is impossible or unlawful, 'within the meaning of the article on the object of contracts, or which is repugnant to the nature of the interest created by the contract, is void.” Under the statute it is the condition that is void, not the whole contract.
If the provision that the parties “agreed to agree” were a condition, and if it has the meaning appellant says it has, then it would be so indefinite as to be inherently impossible, and its invalidity should not affect the duty of the buyer, who has the stock, to pay its value to the extent of his unjust enrichment.

. The rule recognizing that obligation essentially a quasi contractual one, has long been recognized wholly apart from statute. It has been incorporated bodily into the Uniform Sales Act which has been adopted in Guam. C.O. Territory of Guam, § 1730. Since we deal here with shares of stock the Uniform Sales Act, applicable to “goods” does not apply to this contract. Porter v. Gibson, 25 Cal.2d 506, 154 P.2d 703.