Court Opinion

ID: 8006273
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:53:38.165354+00
Date Added: 2024-06-11T16:35:53.901059
License: Public Domain

On Motion for Rehearing.

Hough, J. —
At the argument of this cause three leading propositions were affirmed on behalf of the city : first, the validity of the contract of 1846; second, the power of a court of equity to specifically enforce that contract; third, the invalidity of the tripartite agreement of 1873.
Two of the members of this court present at the hearing inclined to the opinion that the contract of 1846 was-originally invalid; two were of opinion that it was originally valid; all were of opinion that if valid, it was not susceptible of specific enforcement; and all were of opinion that the tripartite agreement of 1873 was a valid and binding agreement. A motion for rehearing has” been filed, in which we are asked to review our judgment upon the last two points.
The rule of this court in relation to motions for rehearing requires that such motion shall “be founded on papers showing clearly that some question decisive of the case, and duly submitted by counsel, has been overlooked by the court, or that the decision-is in conflict with an express statute, or 'with a controlling decision to which the *126attention of the court was not called through the neglect or inadvertence of counsel.” Neither in the motion for a rehearing, nor in the brief filed in support of it, has this been done, nor do we think it could have been done. The case was thoroughly argued by counsel and was carefully considered by the court. No question decisive of the case and duly submitted by counsel, was overlooked by the court. It is not pretended that our decision is in conflict with any statute, nor is there any controlling decision now cited, to which our attention was not called at the argument through the inadvertence of counsel or otherwise. We might, therefore, with perfect propriety, decline further to consider the motion. But, in consideration of the magnitude of the interests involved, the extraordinary zeal of counsel and the labor expended by them upon the brief which has been filed, we will, without intending that our action in this regard shall be drawn into a precedent, briefly review several of the cases which are cited as being at variance with the opinion of this court.
The first case to be noticed is that of Wilks v. Davis, 3 Mer. 509, decided in 1817. It is unneccessary to state the facts. Cooth v. Jackson, 6 Ves. 34 ; Milnes v. Gery, 14 Ves. 400, and Blundell v. Brettargh, 17 Ves. 232 were- cited in'argument. The Lord Chancellor said: “It has been determined in the cases referred to, that if one party agrees to sell and another to purchase at a price to be ascertained by arbitrators named by the parties, if no award has been made, the court cannot decree respecting it; on the other hand, there are cases which determine that if the parties are agreed as to the valuation, but have not appointed any person to make the valuation, the court will itself interfere so as to ascertain the value in order to direct the specific performance; but the case now before the court is different from either, the court being here called upon, not to ascertain the value but decree specific performance by the defendant conveying at such price as certain arbitrators named shall hereafter fix. No arbitration bond having *127been executed, and it not being known tbat any award will ever be made, the strong inclination of my opinion is, that such bill cannot be maintained, although, no direct authority has been produced, either in favor of it or on the other side.” The decision in this case is invoked by the counsel for the city in the following-language:
“ In the’ case at bar on the theory that the 27th and 28th sections of the charter of the gas company are part of the contract of 1846, and that they have no other force than that which was derived from being in that contract, it will be seen that the parties agree to the valuation of certain specifically named property, but do not appoint the persons to make the valuation. Lord Chancellor Eldon says, in this case of Wilks v. Davis, that under such circuim stances the court will itself ascertain the value and decree specific performance. No better authority is needed to sustain our hill than this case of Wilks v. Davis.” Counsel manifestly misconceive the meaning of the chancellor. The chancellor did not mean that when the parties had agreed upon a valuation, and had stipulated in their contract that arbitrators should be chosen by them respectively to make such valuation, and the parties failed to select arbitrators according to their agreement,- the court would itself interfere in order to ascertain the value. No such case is to be found 'in the books. Besides, such a construction would be- in direct conflict with the principle announced in Milnes v. Gery, approvingly referred to by the chancellor in the first paragraph of his opinion, wherein it was expressly decided that when in the sale of property, a valuation is agreed upon and a specified mode of making such valuation is likewise agreed upon, and that mode fails, there is no agreement between the parties which can be carried into execution. What the chancellor evidently meant was, that where it was agreed that property should-be taken at a valuation, and no appraisers were named in the contract, and none were directed by the contract to be named by the parties or to be otherwise appointed to fix *128such valuation, the court could fix it.. In such case as the parties have agreed that'the- property is to be taken at a valuation, and as they have-not-designated any persons to fix the-value,-the agreement is nothing more than an agreement to sell at a- fair valuation-. Sir William Grant in Milnes v. Gery, after speaking of agreements to sell at a price to be fixed by arbitrators, said: “ The case of an agreement to sell at a fair valuation is essentially different. In-that case no particular means of ascertaining the value are pointed out; there is nothing, therefore, precluding the court from adopting any means adapted to that purpose.”
, .- In-the case of Agar v. Macklew, 2 Sim. & Stu. 418, decided eight years after Wilks v. Davis, the contract provided that the plaintiff’ should, within a time named, be at liberty to purchase certain property-aí a price to be fixed by two persons, indifferently to be chosen as appraisers, one by each party, and in the event of their disagreement, they were to select an umpire. The .plaintiff, as in the case at bar, selected an appraiser and requested the defendant to select one, .which he refused to do. The plaintiff filed a bill for specific performance, and the defendant put in a general demurrer for want of equity. The case of Wilks v. Davis was cited .in argument,, and the paragraph of that opinion now relied upon by counsel, was brought to the attention of.the court; but the court held-that it was powerless to grant, the. plaintiff’ any relief, sa-ying: “I consider it to be quite settled that this court will not entertain a bill for the specific performance of an agreement to refer to arbitration, nor. will, in such case, substitute the master for the arbitrators, which would be to bind the parties contrary to their, agreement. ' The demurrer must be allowed.” In further confirmation of the correctness of this view, it will .not be inapt to quote the language of Lord Chancellor Oran worth, in the ease of Morgan v. Millman, 13 Eng. L. &. Eq. 34, and 3 DeG., M. & G. 24, decided by the lords justices of appeal-in 1853. He said: “All the authorities .(the case of Milnes v. Gery, 14 Ves. 400; Blundell v. Bret*129targh, 17 Ves. 232, and Gourlay v. Duke of Somerset, 1 Ves. & B. 68), enunciate the proposition in the strongest language, that when the parties have stipulated that the price shall be ascertained by arbitration — in Blundell v. Brettargh, it was by particular arbitrators; in Milnes v. Gery, it was not by a particular arbitrator, but by arbitration generally — if the arbitration does not proceed and the price be so ascertained according to the mode in which the parties have stipulated, this court has no right to make a different contract than the parties had entered into, and ascertain the price †0? them in some different mode.”
The next case cited, the opinion in which seem to be both misunderstood and misapplied, is that of Morse v. Merest, 6 Maddock’s Rep. 25. In that case three referees were named in the agreement of sale, who were to make a valuation on or before a certain day. The defendant prevented the valuation by the day named, by refusing to permit the referees to go upon the land. The court held that he could not take advantage of a delay which he had himself improperly occasioned, and then said, “that a man who agreed to sell at a price to be named by A, B and C could not be compelled by a court of equity to sell at any other price; but it appearing that the defendant refused to permit the referees to come upon the land, the court had jurisdiction to remove that impediment, and would decree that the defendant should permit the valuation to be made according to the contract, and if it were so made then a supplemental bill must be filed for a specific performance upon the terms of their valuation.” This case, .it will be seen, is in perfect harmony with the opinion of this court.
The last case we will notice is Dinham v. Bradford, 5 Chancery Appeal Cases 519, on the reasoning of which counsel for the city declare themselves perfectly willing to rest their ease. In that ease Bradford, who was a manufacturer of washing-machines and the owner of several patents relating to such machines, admitted Dinham into partnership with him for three years. The whole ulant *130and property of the partnership, including patents and everything else valued at $6,000, was contributed'by-Bradford, and Dinham contributed $T,000 in money. Bradford was to receive two-thirds of the profits and Dinham one-third. It was provided in the articles of co-partnership that at the expiration of the partnership the value of the share of Dinham of and in the property and effects of the partnership should bo ascertained by two indifferent persons chosen by the parties, and Bradford should become the purchaser at such valuation. At the termination of the partnership disputes arose as to Bradford’s share in the capital, and Dinham filed a bill for the settlement of the co-partnership affairs, praying that an account be taken, a receiver appointed, and that the assets of the business be sold. The court hold that it was the clear and manifest object of the agreement that the property was not to be broken up or sold, but the value of the share of Dinham was to be ascertained ; that the whole scope and purport of the agreement was that the partnership was to go on fora certain definite time, and at the end of that time Bradford was to pay Dinham his share. The Lord Chancellor said: “This ease is not like that of the sale of an estate, the price of which is to be settled of arbitration, but is a case in which the whole scope and object of the deed would be entirely frustrated if the court wore to apply the well-known doctrine to the present state of circumstances. In cases of specific performance the matter is very plain and simple. One person agrees to sell his estate in a given way and no rights are changed by the circumstance of that method of selling the estate having failed. The estate remains where it was, .and the money where it was. But here is a man who has bad the whole benefit of the partnership in respect of which this agreement was made, and now he refuses to have the rest of the agreement performed on account of the difficulty which has arisen. It is much more like the case of an estate sold and the timber on a part to betaken at a valuation, the adjusting of matters of that sort form*131ing part of the arrangement, but being by no means-the- substance of the agreement; and in such cases the court has found no difficulty. If the valuation cannot be made modo et forma, the court will substitute itself for the arbitrators. It is not the very essence and substance of the contract, so that no contract can be made out except through the medium of the arbitrators. Here the property has been had and enjoyed, and the only question'now is, what is- right and proper to be done with regard to settling the price.”'
In this case it will be perceived the partnership was at an end, the accounts were to be settled, the joint property was on hand and had to -be disposed of in- some way, either by a sale thereof','which,-as the Lord Chancellor said would have been contrary to the whole spirit and object of the agreement, and might have deprived Bradford of his patents and the power to continue his business; or by-ascertaining the value of Dinham’s share therein and charging the amount thereof against Bradford. In such case's it is plain the valuation provided for is not the very essence and substance of the contract, so that no contract can be made -out except through the medium of the arbitrators. The-essence and substance of the contract between the parties ivas not the acquisition by Bradford of Dinham’s interest in the property of the partnership, for at the time the contract was entered into Bra ford already owned the. property, and Dinham had no interest in it. The essence of the contract was that these parties should do a manufacturing business, as co-partners, for the period of three years, and share the profits in certain proportions; and this part of the contract was fully performed. In .order to prevent-the sale of the plant and patents and other property of theffirm for the purpose of settling the affairs of the partnership at its termination, it was provided that Bradford should take Dinham’s -interest at a valuation; and this being a mere incident to the main contract, which had been fully performed, the chancellor held'it must be carried into effect, and if the valuation'could not be made modo et forme, *132still.it must be made, and the court would make it rather than permit Bradford’s entire interest in the property of the firm to be also sold contrary to the spirit of the agreement.
The glaring dissimilarity between that case and the case at bar would seem to render all comment unnecessary. The city never transferred the gas-works to the defendant and permitted it to enjoy the profits thereof on condition that it was after a time to have them back again at a valuation. The city never owned the gas-works. It was not even required to purchase them. It had no right to them in 1860, as is assumed by counsel. The city had the mere privilege of acquiring a right in a certain specific mode— nothing more — and this privilege it voluntarily surrendered for the privilege contained in the contract of 1846.
It is not every contract for the sale of property which can be specifically enforced. Suppose two citizens of St. Louis should, by written contract, agree that within a given time, or on a day named, one should have the right to purchase from the other a valuable estate at such price as they should on said day mutually agree the same was worth. Such an agreement would manifestly seem to contemplate that the property should be fairly valued. But suppose that on the day named, the parties should meet together, and could not or'would not agree, would any one pretend that in such a case the owner could be compelled to sell his estate for such an amount as some other person should determine was a fair price? Would not a decree of court which should, under such circumstances, compel the owner to sell against his will and against his agreement, for a price to be fixed by a master in chancery, deserve to be characterized as an arbitrary and illegal interference with the rights of private property ? Now there is in reality no difference between the case put and one in which the parties stipulate that they will not personally meet to negotiate about the price, but that" each will send au agent or representative or arbitrator to act for him. Unless these arbi*133trators meet and agree, or failing to agree, call in an umpire, where one is' provided for, it is manifest that there is no completed contract of sale; and no court has or should have the power to complete the contract of sale for the parties and then enforce it. This is, in brief, the common sense of all the decisions on the subject. The fault, if any, lies in the agreement of the parties, and not with the law. We are speaking, of course, of contracts of sale by arbitration, simpliciter, such as the case at bar, and not of cases where ■new rights and controlling equities have arisen out of the transfer or delivery, by the vendor, of the subject matter of the contract into the possession of the purchaser, before the ¡Drice was ascertained, nor where the valuation provided for is subsidiary and incidental, and not an essential portion of the contract; such eases stand upon an entirely different footing
As to the second point. It is now contended that the contract of 1873 is invalid, because the city had no power to surrender the right to purchase conferred by the contract of 1846. The suit of the city is founded upon that contract of 1846. The city asserts the validity of that contract. It asserts, therefore, that it had the power to surrender the privilege conferred upon it by law, of becoming the purchaser in a specified mode, of the property of the defendant in 1860, for this was yielded by the contract of 1846. Of course it had equal power to relinquish the privilege of purchasing in 1865. Now it seems to us too plain for argument that if the city could relinquish a privilege conferred upon it by law, it could relinquish a similar privilege conferred upon it by-its own contract; that it relinquished the privilege of purchasing under the contract of 1846 is, therefore, no objection to the validity of the contract of 1873.
As to the agreement between the St. Louis company and the Laclede gas company of Eehruary 14th, 1873, forbidding mutual encroachments upon designated territory therein allotted to each, and now urged upon our attention, *134it is only necessary to say that it was made before the execution of the tripartite contract, which was- entered into February 28th, 1878; that it constitutes no part of that contract, and was not before-us for adjudication in this suit. We, therefore, make no ruling in regard to it. Besides it is expressly provided in the tripartite agreement that both .of said companies, and any other gas company or private individual, shall be permitted to exist and do business in that portion of the city lying north of Washington avenue. The motion for rehearing will' be overruled.
Judges Napton, Henry and Nortor concur. Judge Sherwood not sitting.
Napton, J. —
My views on-his case have already been stated. The case was fully argued at the bar orally and in thirteen printed briefs, and was held under advisement by the court for a month. The motion for a rehearing pointed out no omission or misunderstanding of facts in the opinion of the court. I, therefore, voted against granting a rehearing or allowing further time for re-argument of the points decided, and take this occasion to enter my protest against rehearing and redeciding cases under such circumstances.