Court Opinion

ID: 8850695
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:12:09.587506+00
Date Added: 2024-06-11T17:05:29.225631
License: Public Domain

GILBERT, Circuit Judge
(dissenting). I am unable to concur iu that portion of the opinion which holds that the pleadings state facts upon which a cause of action may be predicated. The agreement, sued upon in this case shows that the parties to this action were engaged in a joint venture, the object of which was to purchase timber lands with, a view to realizing profits, either* by the sale of the lands, or by the sale of the timber. The defendant in error and his associate were to contribute to this ventux*e their services in purchasing the lands, and were to receive a certain fixed percentage of the profits. The other parties to the agi*eexnent were to furnish the purchase money, were to take the title to the lands, and were to receive the remainder of the profits. They reserved to themselves also the power to determine the time and terms of the sale, whether of lands or of timber, with the option to cut and use the timber for themselves, in which event they were to be charged the market value of the timber. In arriving at the pi'ofits the purchase money was to draw interest at 7 per cent,., and the plaintiffs in error were to be allowed all sums paid for taxes on the lands. The contract was made in June, 1882. The lands wex*e subsequently purchased thereunder. The complaint then proceeds to show that; oxx August 6, 1888, an offer was made' by a responsible person to purchase the lauds at a pxice which, if accepted, would have yielded a net profit of 897,412.61, and on the basis of that profit the plaintiff *790in this action demanded judgment. It is not alleged that any of ihe lands or timber have been sold, and there is no averment of the present value thereof; but it is assumed that because, in 1883, an opportunity was afforded to sell at a certain price, the right accrued to the defendant in error to sue for and recover his proportionate amount of the profits that would have resulted, ha'd that offer been accepted. The parties to this contract did not agree that the lands should be sold to the highest bidder, or at the first offer that might be received. It Avas left to the discretion of the plaintiffs in error to sell at such times and terms as they might deem advisable. They could not abuse that discretion, ‘however; and no doubt the contract imposed upon them the obligation to sell within a reasonable time, and at a reasonable price. But, clearly, they Avere under no obligation to accept the offer of August C, 1883. They had the right to exercise their judgment concerning its acceptance or rejection. That power had been voluntarily conferred upon them, and the contract had been entered into with that understanding. It is within common knowledge that the value of such lands is fluctuating. It does not follow that because, in 1883, an offer was made, which, if accepted, would have insured a profit of $97,412.61, that profits to that amount have been earned. The property may have greatly decreased in Aralue since that date. In declining that offer the plaintiffs in error may, it is true, have lost an excellent opportunity to sell the lands at a profit, and they may have failed to exercise ordinary prudence; but the relation they sustained to the defendant in error was not such that the fact of that offer, and its refusal, amounted to a breach of their contract or caused their liability to him to become fixed and determined in a definite sum recoverable in an action at law. This view of the contract relation between the parties does not deny to the defendant in error the power to protect his interests, or to sue for his proportion of the profits, if any there were. If, after the lapse of a reasonable time Avithin Avhich to dispose of the lands, they still remained unsold, he undoubtedly had his remedy. If the profits had in any manner been ascertained, as by an accounting, or by the agreement or admission of the parties, he could have brought an action at law to recoArer the ascertained amount; but if, as in this case, nothing had occurred to determine the profits, I hold that his only remedy was by a suit for an accounting. In such a suit, he must either prove an increase in the value of the lands, or such failure of contract duty upon the part of the other parties to the agreement that they would be held liable for profits which they might have earned, but did not. In such a suit, account would be taken of the amount of the purchase money expended, with the interest on the same, and the taxes paid since the purchase. In the case before the court, no mention has been made of the taxes.