Court Opinion

ID: 8754597
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:41:10.947595+00
Date Added: 2024-06-11T17:01:10.952947
License: Public Domain

GROSSCUP, Circuit Judge
(after stating the facts as above). The Missouri suit was by Shinkle against Vickery, and the National Bank of the Republic; and was based on Shinkle’s alleged legal title to the shares in question by virtue of their sale by Vickery to Gibson, and their re-sale by Gibson to Shinkle. The prayer was for a compulsory specific assignment of the shares by Vickery directly to Shinkle.
We are inclined to hold, though not free from doubt, that the suit under review is by Shinkle, not in his own right, but in the right of Gibson to the shares in question, not as holder of the legal title, but as possessing an equity in Gibson’s claim of title. The object of the bill, in that view, is not an assignment of the certificate, but an adjustment by the court of Gibson’s transaction with Vickery to the extent that Shinkle is entitled, as one having an intervening equity, to such adjustment. In such a view of the two suits, the Missouri suit and this suit would be fundamentally different. In the Missouri suit the issue raised was that Shinkle had no legal title. In this suit 'the question raised would be the nature of Gibson’s transaction, and the extent of his relief, and of Shinkle’s interest therein. *427against Vickery; and it would follow that an adjudication of the Missouri suit, would be no adjudication of the issues of this suit. But this distinction need not be worked out for we are ready to decide this case on the proofs.
The original contract between, Vickery and Gibson was in the nature of an exchange of the shares in question for a farm in St. Louis County, Missouri. The agreed price for each — the farm and shares — was thirty-two thousand dollars. So far as the transaction related to the shares it seems to have been unconditioned, but to the extent it related to the farm, it was accompanied with these conditions : That Gibson should, on his part, during the next succeeding year, have a right to re-purchase the farm upon the payment of the thirty-two thousand dollars in cash; and that Vickery should, on his part, during the same period, have a right to tender back the farm, and demand in cash, the fixed price of the shares, thirty-two thousand dollars. Collateral to the latter portion of this agreement, Gibson made to Vickery his deed of another farm in Christian County, Missouri.
After this transaction had been entered into, it turned out that an encumbrance of ten thousand dollars on the St. Louis farm, to be paid off by Gibson under the stipulations of the agreement, was not paid off; whereupon a supplemental agreement was made, under which Vickery advanced to Gibson, to pay off such encumbrance, the ten thousand dollars needed. To secure himself for this advance, it was agreed that Vickery should hold, as collateral, the shares in question, and the memorandum already set forth was delivered, as evidence of that portion of the supplemental agreement.
But before the year stipulated for had expired, and a month or so before the sale of the shares by Gibson to Shinkle, Vickery elected to exercise his option to give back the farm, and take in lieu thereof the thirty-two thousand in money. This he had a clear right, under the agreement, to do. Gibson failed to pay the money, and thus, in this respect, broke his agreement. There can be no doubt that as between Vickery and Gibson, Vickery from that moment had the right to withhold the assignment or delivery of the shares, until Gibson had either performed his contract, or compensated Vickery for the loss suffered by his failure to so perform. The transaction covering the exchange of the shares and farm, with the accompanying options, and the supplemental transaction out of which grew the collateral pledge evidenced by the memorandum, were in essence, a single transaction. Vickery could insist that either the whole of it, or no part of it, should be carried out; and could recoup losses for failure to carry out one part from anything found available in any other part. Such clearly were the rights of the parties, had the rights of Shinkle not subsequently intervened.
Shinkle insists that though he prosecutes this suit in the right of Gibson, he stands, with reference to Vickery, in a right somewhat different from Gibson’s. He insists that the memorandum of July 24th, 1894, constitutes an estoppel upon Vickery, whereby his rights against Vickery are augmented beyond those available to Gibson.
*428The transaction with Gibson, bringing Shinkle into the case, was as follows: Shinkle sold to Gibson, at a price named at fifty thousand five hundred dollars, one hundred and ten lots at Findlay, Ohio; agreeing also to advance to Gibson twenty thousand dollars to purchase a leasehold interest in St. Eouis. As security to the twenty thousand dollar advance, Gibson gave to Shinkle title to the leasehold interest; and as part payment of the purchase price of the lots, transferred to him the shares in question at a price fixed at twenty-three thousand dollars, ten thousand dollars of which was to be paid by Shinkle to Vickery to redeem the shares from the pledge already referred to. Upon the entire transaction three thousand dollars was at the time paid down by Shinkle.
Vickery had no knowledge of this transaction between Gibson and Shinkle, and Shinkle claims to have had no knowledge of the transaction, in its entirety, including the option features, between Gibson and Vickery; and lays stress upon the claim that the payment of the three thousand dollars was made solely on the faith of the memorandum shown him.
The memorandum was, as we have already seen, not a transaction by itself, but part of another, and a larger, transaction. It was not meant to be shown to Shinkle, or to be given to the world; it was drawn solely for the eyes of Gibson and Vickery, and as evidence of a supplemental feature of their transaction as an entirety. That Gibson used this detached paper to deceive Shinkle, need not be denied ; that the use Shinkle now asks the court to make of it, would be a wrong to Vickery, is equally undeniable. We see in the execution and delivery of the memorandum by Vickery, under the circumstances shown, no failure of ordinary precaution, or negligence of any kind, that in equity and good morals should make him responsible for the use made of it by Gibson. The memorandum had no place outside the Gibson and Vickery transaction; we cannot assume that Vickery ought to have foreseen that Gibson would give it an independent meaning and existence. Thus viewed, Vickery and Shinkle are equally innocent; and their equities to the shares must be settled, not by estoppel, but by priority of claims in point of time, a priority that indisputably is Vickery’s.
Had Shinkle in right of Gibson, in apt time, have offered to carry out Gibson’s part of his contract with Vickery, or reimburse Vickery for his damages, he might have laid claim to an assignment of the shares. But no such offer was made in the bill, nor in the subsequent proceedings, though the cross bill invited it. Shinkle is, in consequence, without equitable footing on which to ask for relief.
The decree must be affirmed.