Federal Reserve Bank of Richmond v. Neuse Manufacturing Co.

196 S.E. 848, 213 N.C. 489, 1938 N.C. LEXIS 116

• Court: Supreme Court of North Carolina
• Decided: May 4, 1938
• Status: Published

Opinion

Barnhill, J.

At tbe bearing tbe petitioner offered tbe letter of ber testator to "Willis Smith, counsel for tbe receiver, and tbe reply thereto; tbe memorandum showing tbe estimated net asset value of tbe policy; evidence of a tender and tbe following admission contained in tbe answer of tbe receiver: “It is admitted that tbe said Don P. Johnston as receiver, and tbe said Kenneth Gant conferred with reference to tbe disposition of tbe said policy and tbe taking over of tbe same by tbe said Kenneth Gant, and tbe said Don P. Johnston, as receiver, and Mr. H. H. Harris, as bookkeeper of tbe Neuse Manufacturing Company, ascertained that tbe net interest in equity of Neuse Manufacturing Company in said policy after tbe payment of tbe premium then due upon tbe policy was, in so far as they were able to determine, $105.37 as of tbe end of tbe grace period, to wit: Tbe 6th or 7th day of April, 1937, as tbe policy may determine. Tbe said Don P. Johnston, receiver, says that from time to time, over a period of several months, be and tbe said Kenneth Gant, deceased, bad discussed tbe taking over of tbe said policy by tbe said Kenneth Gant without anything definite being done by either party towards accomplishing tbe transfer of tbe policy or tbe interest therein. That on 15 March, 1937, there was a conference between tbe said Kenneth Gant and Don P. Johnston, receiver of tbe Neuse Manufacturing Company, at which time tbe proposed taking over of tbe policy by tbe said Kenneth Gant and tbe transfer was discussed.”

There was also evidence of statements by tbe receiver that be bad been negotiating with Gant for a transfer of tbe policy, that tbe receiver intended to recommend tbe transfer, and that be regarded that tbe transfer bad not been consummated. This was all tbe evidence offered bearing upon tbe existence of a contract.

Was there a valid and subsisting contract to transfer said policy? Petitioner’s rights depend upon tbe answer to this question which, upon tbe record, we are compelled to 'answer in tbe negative.

Tbe petitioner alleges a contract to convey and assign tbe policy of insurance in question. Tbe want of consideration to support tbe agreement, tbe indefiniteness of tbe terms as to who was to be made tbe new beneficiary and as to when the transfer was to become effective might be mooted to some length. It is unnecessary, however, for us to discuss these features of tbe claim for tbe reason that .the defense made by tbe receiver that such negotiations or agreements as were bad or entered into between tbe petitioner’s testator and tbe receiver did not become effective as a contract for tbe reason that it was stipulated that tbe approval of the resident judge should be first obtained as a condition precedent, is well founded and must be sustained.

That a contract is not made so long as in the contemplation of both parties thereto something remains to be done to establish contract relations is too well established to require the citation of authority. “The parties to a written contract may agree that until the happening of a condition which is not put in writing the contract is to remain inoperative.” Anson on Contracts (Am. Ed., 318). To like effect are the decisions in Insurance Co. v. Morehead, 209 N. C., 114, and the cases there cited. Speaking to the subject in Bowser v. Tarry, 156 N. C., 35, it is said: “It is fully understood that although a written instrument purporting to be a definite contract has been signed and delivered, it may be shown by parol evidence that such delivery was on condition that the same was not to be operative as a contract until the happening of some contingent event, and this on the idea, not that a written contract could be contradicted or varied by parol, but that until the specified event occurred the instrument did not become a binding agreement between the parties.”

In negotiating a contract the parties may impose any condition precedent, a performance of which condition is essential before the parties become bound by the agreement. A promise, or the making of a contract, may be conditioned upon the act or will of a third person. 13 C. J., 679. Wellsville v. Miller, 243 U. S., 6, 61 L. Ed., 559; Rollins v. Denver Club, 18 L. R. A. (N. S.), 733; Insurance Co. v. Morehead, supra; 12 Am. Jur., 849.

It is not conceded that the receiver was vested with authority, either under the general law or the order appointing the receiver, to dispose of a capital asset without approval of the court. Even so, in the instant case, the receiver did not undertake to exercise any such authority. He elected to make his agreement subject to and on condition that it was approved by the court. This was a valid condition precedent, even if it is assumed that the receiver had power to convey without such approval. The approval of the court not having been obtained, there is no enforceable contract.

The judgment below is

Affirmed.

Sea well, J., took no part in the consideration or decision of this case.