Court Opinion

ID: 7182835
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:49:50.789236+00
Date Added: 2024-06-11T16:15:58.324818
License: Public Domain

Rost, J.,
dissenting. Green and Ogilvie made an agreement, by which they bound themselves to pay James Erwin the sum of $320,000 on certain terms of credit, for a square of ground belonging to him in this city, on condition that it should be divided into lots and sold at public auction on the terms agreed upon for the price, and that Erwin should make titles to the purchasers, and receive in payment their notes satisfactorily endorsed; Green and Ogilvie to receive the surplus of the sale over the price, or to account for the deficiency as the case might be. These parties then made a contract with a company, in which they bound themselves to take all the necessary steps to have the ground divided into lots; to cause those lots to be sold at public auction within a given time, and to account to the company for all that might remain from the net proceeds of the sale, after paying James Erwin $320,000, and retaining for their trouble and labor in effecting the sale, and as a profit upon their purchase, the further sum of $30,000; and in case the net proceeds of the sale were less than $350,000, the members of the company agreed each to furnish, for the deficiency in proportion to the amount of their stock, six notes satisfactorily endorsed : the first payable six months after the day when the deficiency was ascertained, and the other five in one, two, three, four and five years from that date, these being the terms on which the property was to be sold.
The square was accordingly divided into lots, and on the 29th March, 1837, a public sale was effected in presence of the defendants, who purchased some of the lots. The aggregate amount of that sale was $291,400; but it was reduced by a re-sale of part of the property rendered necessary by the failure of the purchasers to comply with the terms of the sale. The re-sale took place on the 29th June, 1837, and the loss sustained in consequence of it, amounts to the sum of $11,307 50, thus reducing the actual amount of the sale to $284,092 50, which was received by James Erwin, in the notes of the purchasers, and leaving a clear loss to the company of $69,907 50. Of this sum, $39,907 50, with the stipulated interest at six per cent, was to make good the sum of $320,000 to James Erwin at the date of the sale, and the remaining $30,000 were to be paid to Green and Ogilvie.
*483The defendants held stock of the company to the amount of $20,000, and this suit was instituted by the assignees of Erwin, and by Green and Ogilvie, to recover from them the proportion of the loss which they assumed to pay.
Green and Ogilvie discontinued the suit, so far as they were concerned, and there was judgment in favor of the defendants, against the other plaintiffs, on the ground of prescription. The latter have appealed.
I do not think that the facts of this case admit of any reasonable doubt. James Erwin accepted the stipulations in his favor contained in the agreement between Green and Ogilvie and the company, by recording the proces verbal of the auction sale, making titles to the purchasers and receiving their notes in payment, in conformity with that agreement.
The defendants having been present at the sale, had notice of the mortgage existing upon the property, and of the provision which was made to secure the purchasers against it. That mortgage was subsequently raised, and they cannot now set up its existence at the time of the sale, in avoidance of their obligation.
At the re-sale, Green and Ogilvie were acting for the defendants and in their presence; and so far as Erwin is concerned, the defendants are as much bound by the acts of these parties as they would be by their own. They never objected to the proceeding, and the loss sustained should be determined by the re-sale.
The main ground of defence is, that this action is based on the alleged promise to give notes for the deficiency, and that taking the 29th June, 1837, the day of the re-sale, as the day on which the deficiency was ascertained, and James Erwin had the right to demand these notes, more than ten years elapsed from . that day to the institution of the suit, and the claim is barred by prescription.
I do not understand this action to be on the promise to give notes for the deficiency, but rather on the promise to pay the deficiency. The giving of notes was subsidiary to the principal obligation, and could be dispensed with without impairing it.
. The omission of Erwin to require the security which the defendants were bound to give, amounts to a waiver of it on his part, and leaves unimpaired their obligation to contribute to the payment of the loss upon the sale.
Had notes been given, they would have been barred by the prescription of five years. As the case stands, the prescription of personal actions can alone be invoked, and the ten years necessary to perfect it should be counted on each installment from the day of its maturity. Under this view of the law, the three first installments are barred by lapse of time, and the three last only can be recovered.
Green and Ogilvie having discontinued their suit, and the first three installments of the claim of the other plaintiffs being prescribed, that claim should be limited to one-half of the pro rata proportion of the loss upon $39,907 50, the amount remaining due to James Erwin, for this sum, divided into three equal installments, falling due respectively on the 29th of June, 1840, 1841 and 1842, and interest at six per cent after maturity, I am of opinion the plaintiffs are entitled to a judgment.