Hendrickson v. Callan

70 Misc. 342, 128 N.Y.S. 980

• Court: New York Supreme Court
• Decided: January 15, 1911
• Status: Published

Opinion

Le Boeuf, J.

The securities referred to in the underwriting agreement came into existence within the year 1909. The plaintiff, pursuant to the terms of that agreement which permitted him to obtain possession of them before the time for the payment of the last instalment had expired, obtained possession of these securities during the year 1909. There was nothing, therefore, to relieve either party from whatever their responsibilities were under this contract during the year 1909.

It is plain from the contract that the plaintiff, who drew it, intended to obligate the defendant to purchase one-half of Ms subscription within one year from the date which he fixed in that contract. It is not apparent, however, that it was the intention of the plaintiff to immediately confer title to one-half of this subscription upon the defendant as soon as he should come into possession of, the bonds. Hor does the plaintiff make any such claim. The plaintiff’s claim is that the defendant agreed absolutely to purchase these securities — that that agreement was not measured by the period specified in the contract, but was one which the defendant, it may be assumed, within the period of the Statute of Limitations could at all times be required to perform, and if he did not perform could be sued for its breach. This position embodies two claims:

One. That no tender of the securities' was required.

Two. That, if tender were required, it was made in time.

Taking up the first proposition, it appears clear that the contract made by these parties was not an executed, but an executory, contract. It appears equally clear that the conditions of the contract were concurrent. Something was to be done by the plaintiff on one hand, to-wit, the tender of the securities. Something was to 'be done by the defendant upon such tender, to-wit, payment therefor or a refusal to perform.

The plaintiff proceeded upon the theory that the tender was required in his complaint, where a tender is alleged and claimed to have been made within the time fixed for the life of the contract. It was, however, later contended that no tender whatever was really necessary, except as one might be required to be made before the commencement of the action. This proposition does not seem to be borne out by the authorities.

“ In Callenonel vs. Briggs, 1 Salk. 112, there was an agreement that the defendant would pay a certain sum of money, in six months after the bargain, the plaintiff transferring stock. Holt, Ch. J., said: ‘ If either party would sue upon this agreement, the plaintiff for not paying, or the defendant for not transferring, the one must aver and prove a transfer, or a tender, -and the other a payment or a tender; for transferring in the first bargain was a condition precedent, and though these be mutual promises, yet if one thing be the consideration for the other, then a performance is necessary to be averred. If I sell you my horse for £10, if you will have the horse, I must have the money; or if I will have the money, you must have the horse.’ .Therefore, the report says ‘ he obliged the plaintiff either to prove a transfer, or a tender and refusal within six months3 33 Lester v. Jewett, 11 N. Y. 453-456.

This ease was relied upon in Lester v. Jewett, supra, where for a valuable consideration one party had agreed at the expiration of one year from the date of the contract to, as here, purchase of a definite person certain definite securities. The plaintiff sued for breach of the contract to purchase. Upon demurrer four of his counts which did not allege an offer or tender of the stock were held bad, upon the theory that the promises of the parties were concurrent.

It was claimed that the case was to be distinguished from cases cited, including Callenonel v. Briggs, supra, because as in this case" they claimed a valuable consideration for the' agreement to purchase existed. The court held that that could not alter the nature of the contract, saying: “ The true and only question is, what is the defendant bound to do in order to perform his contract ? or, rather, under what circumstances will he be considered in default for its nonperformance ? ” The date for performance, to-wit, at the expiration of one year, would have been on the 6th day of September, 1840.

A further count alleged an offer of performance “ at the expiration of one year from the date of the instrument, to-wit: on the 7th day of September, 1840.” The court held that the use of the words “ at the expiration of one year ” was a sufficient allegation of performance; that the further specification of a date which was after the expiration of one year could be stricken out as surplusage.

The case last cited has never been overruled.

In Taylor v. Blair, 59 Hun, 347, a situation somewhat similar to the one at bar existed. The parties who'had in- ' duced another to purchase shares of capital stock of a company 'agreed “ that if at the end of one year from this date (April 4th, 1873) the said Meyer shall desire to sell the said shares at the .price paid for the same by him,' we will purchase the same and pay him the amount paid by him on the saíne, with interest.” On March 7, 1874, Meyer notifled the defendants that he desired to sell his shares under the agreement. The court said: “And before a recovery could be had in the action it was incumbent upon the present plaintiffs to prove that on the 4th of April, 1874, Meyer offered or tendered a transfer of these shares to the defendants. That was a condition precedent, according to the terms of the agreement, upon which the right to recover this money depended.”

It is apparent here, where notice had been given of the intention to exercise the option to sell within time, that the court insisted not only on a tender, but that the tender must be made within the life of the contract, ■ to-wit, not later than April 4, 1873. This was the same contract under construction in Meyer v. Blair, 109 N. Y. 60, relied on by plaintiff’s attorney. There, however, the question of tender was not considered by the Court of Appeals. •

That the Court of Appeals did not disagree with the doctrine in Taylor v. Blair is shown by the citation of this case in Delaware Trust Co. v. Calm, 195 N. Y. 231.

There parties had entered into a joint venture in which their interest was fixed in real and personal property by the terms of the instrument in suit. As one of the moving considerations evidently for entering into the agreement for purchase, the first parties to the agreement covenanted that they would “ at any time within three years of this date, at the request of the said parties of the second part, purchase for cash all the right and interest of the said parties of the second part in said business and this agreement.” The parties qualified to sue under this .agreement gave notice of the exercise of their option within the required time. At this time the court said:

“ Thus an executory contract came into existence as of the date when the option was exercised for the purchase and sale of both kinds of property. (Benedict vs. Pincus, 191 N. Y. 377, 383.) * * *

“The action was brought on the theory that it was for the recovery of a debt and that the commencement of the suit was a sufficient demand, but there was no debt. The express promise of the buyers was to purchase and pay for various rights and interests in a certain business and agreement, and the implied promise of the sellers was to transfer or assign those rights and interests to the purchasers, for there can he no purchase without a sale. * "x" * Concurrent action was required and no debt came into existence until the sellers had assigned or offered to assign that which they had agreed to sell.” The court cited approvingly Lester v. Jewett, supra. There was no evidence in this case tending to show an offer, tender or demand, and the court sustained the trial court* in dismissing the complaint. '

The reliance of the Court of Appeals in this case upon these earlier cases doesmot disclose any intent on its part to change the rule as claimed by the plaintiff. I can find nothing in this decision from which it may be assumed that •that court will now hold that a tender or offer of tender, though necessary, could be made at any time before the commencement of -the action or the trial of the case.

The authorities cited hy the plaintiff for this proposition do not bear out their contention. The trend of authority is apparently unbroken in favor of in such cases requiring a tender or offer of tender within the time fixed for the performance of the contract by its terms. Indeed, it may be asked, if this were not so, what object would the plaintiff have had in inserting a definite period of a year in the contract which he desired and required the defendant to sign.

But the plaintiff claims that these cases may be further distinguished upon another theory, saying: “ The plaintiff purchased fifteen hundred dollars of said bonds which he did not want, and at defendant’s request, and he -should not be compelled to keep that which he did not want and which only came into existence hy defendant’s action. Plaintiff acted as defendant’s agent, and the relation of vendor and purchaser did not exist between them.”

The -authorities cited for this proposition, however, do not appear to sustain it.

Both the plaintiff and the defendant were mutually interested in the success of the ice company. Both were syndicate managers and officers of the company. If the relation of vendor and purchaser did not exist between -them, it was because the contract was executory. It is true the title did not pass to defendant, for that reason something was yet to be done 'by plaintiff. The plaintiff in his statement claims that he purchased $1,500 of said bonds which he did not want. The whole situation is summed up in this assertion. He did purchase not only the $1,500, but the remaining $1,500, and took title to the whole amount during the year in question, in his own name. There was no agency for ■the defendant to be assumed from this transaction. Plaintiff simply placed himself in the position of demanding performance of the defendant as to the $1,500 of bonds he did not want within a stipulated time. His implied agreement to sell could not have been enforced after the expiration of that period. There was in this contract no more guaranty of repayment than what was claimed as such in Delaware Trust Co. v. Calm, supra.

There was absolutely no agreement on the defendant’s, part to either himself pay, or to assure the payment to the syndicate managers or the corporation of what plaintiff, himself by his subscription agreement agreed to pay. The best evidence of that is the fact that the plaintiff did himself purchase and pay for the whole amount of his subscription. There was no executed sale.

2. It having been determined that tender was required •to be made and made within the period of time required by the contract, the question still remains, was the tender pleaded and proven to have been made January 3, 1910', in time?

'Section 2'0 of the General Construction Law, a re-enactment of the provisions of the Statutory Construction Law, provides: “A number of days specified as a period from ia certain day within which or after or before which an act is authorized or required to be done means such number of calendar days exclusive'of the calendar day from which the reckoning is made. Sunday or a public holiday, other than a half holiday, must be excluded from th© reckoning if it is the last day of any such period, or if it is an intervening day of any such period of two days. In computing any specified number of days, weeks or months from a specified event, the day upon which the event happens is deemed the day from which the reckoning is made. The day from which any specified number of days, weeks or months of time is reckoned shall be excluded in making the reckoning.”

The plaintiff takes the position that the period of one year may be construed as a number of days, to-wit, 36b days.

In Aultman & Taylor Co. v. Syme, 163 N. Y. 54, the court said that the failure of the Legislature to include years in the statute was intentional. “ Had the legislature intended to apply that method to periods of years it could have disposed of the whole subject in a single sentence by saying that the day from which any specified period of time is to be reckoned shall be excluded from the reckoning. But it' did not say that. The silence of the statute in this regard is, therefore, significant of the legislative intent to exclude from its operation other periods than those enumerated. We do not think that this rule of statutory construction is rendered inapplicable, because, as suggested on behalf of the appellant, a ‘ year ’ and ‘ twelve months ’ are for all practical purposes one and the same thing. A year, twelve months, fifty-two weeks and three hundred and sixty-five days all denote the same total period of time. If the statute had simply provided that the ‘ day ’ from which any specified number of ‘ days ’ is reckoned shall be excluded from the reckoning, it could hardly be contended that because there are three hundred and sixty-five days in a year, therefore the legislature intended to apply the same rule of computation to years as to days. But there would be quite as much force in such a contention, as there' is in the argument that because a year is composed of twelve months the same rule must apply to both.”

It is claimed by the plaintiff that this case may be distinguished in that “ years ” were there involved, and because the statute specifically defines the period of a year to include 365 days. This, however, was the condition of affairs at the time of the decision in the Aultman case. The statute now reads (§ 5'8) : “ The term year in a statute, contract, or any public or private instrument, means three hundred and sixty-five days, but the added day of a leap year and the day immediately preceding shall for the purpose of such computation be counted -as one day.”

It may be questioned if the purpose of this definition of a year as including 36-5 days was for any other purpose than to indicate the method of computing that period in the case of a leap year.

Referring back to section 20, as it now stands, it is noteworthy that the language there employed is “ a number of days specified as a period,” etc. Again, “ In computing any specified number of days ”. The words “ within one year ” can hardly be deemed within this language. '

But another reason exists. The same section provides for a distinction between days -and weeks and months under differing conditions. The day from which all these periods shall he figured, if a specified number, is to be excluded in making the reckoning. As to that the statute is specific. But it is not as to weeks and months when it comes to excluding 'Sunday or a public holiday, if it is the last of any such period. Those periods are evidently purposely omitted, and it is only “A number of days specified as a period from a certain day within which or after or before which an act is ■authorized or required to be done,” whose last day if -Sunday or a holiday is to be excluded.

How it is apparent that a week is a period of days, yet, if the end of a single week fell upon a public holiday under this section, that day is not to be excluded from the calculation.

In Benoit v. New York Central & H. R. R. R. Co., 94 App. Div. 24, the reason for the repeal of the section 788 was there stated. That section would exclude Sunday or a public holiday for any period of time, independent of the fact that it was the last day in the period composed of days, weeks, months or years. When the Statutory Construction Law repealed that provision and dropped the word “ years,” the court stated that there was sufficient reason for the distinction, saying: “ Where a party is given only a few days within which to perform an act it is reasonable enough that his time should not be shortened by the occurrence of Sunday as the last day.”

Ryer v. Prudential Ins. Co., 185 N. Y. 6, held as to the six months’ period within which to commence an action, that, even though the last day of the six months period within which an action could be brought fell on Sunday, commencement of the action on the following Monday was •too late.

It is claimed that this case is to he distinguished, because the period of a month or months was expressly defined by the statute. The distinction, however, does not appear to be clear. The rule has been laid down not only for months, but' for a period of years.

In the Benoit case, supra, and in the case of Schinzel v. Best, 45 Misc. Rep. 455, it was held that Sunday was not to be excluded when it was the last day of a period of years. If, therefore, by .any construction of the plaintiff’s contract “within a year” could be held to .extend to January 1, 1910, no tender was made on that day. Tender is not excusable under these authorities because the last day to make that tender was a public holiday.

A tender was made, however, under circumstances that might have caused some doubt. I have, therefore, carefully examined the provisions of section 25 of the General Con-, straction Law to ascertain whether those provisions are broad enough to, of themselves, extend the time until the 3d of January, 19Iff. That statute provides: “Where a contract by its terms requires the payment of money or the performance of a condition on a public holiday, such payment may be made or condition performed on the next business day succeeding such holiday with the same force and effect as if made or performed in accordance with the terms of the contract.” This sentence was added by chapter 39 of the Laws of 1902 to the provisions of section 24 of the Statutory 'Construction Law. It followed almost immediately after the decision in Page v. Shainwald, 169 N. Y. 246. There .an option was required to be exercised and tender made upon January first, a day certain — not “within” a specified time. The request and tender were made on the third of January, and it was insisted that the tender and request were in time. The court held, however, that, as the statutes then stood, there was nothing to prohibit the making of the request -and the tender the first day of January, even though it was a public holiday. The court said: “ It is undoubtedly true that the state of the law -on this subject is likely to prove embarrassing to many, such for instance as those who find themselves obUged to tender a considerable sum of money on a day which is just enough of a holiday to allow the banks to close from which he must obtain the money to make the tender, but not enough of a holiday to avoid the necessity of the tender if he would not breach his contract. But such faults, if faults they be, in our business law can be corrected only by the legislature.”

It is -apparent in this case that the plaintiff was not obliged to make his tender on the first of January by the terms of the contract. It would seem as if the -statute had been drawn to fit just the situation that was involved in that case — one “ where the contract by its- terms requires * * * the performance of the condition on -a public holiday.”

This statute is in derogation of the rul-e as it had existed prior to that time.

If the Legislature had intended to say that a public holiday was for the purpose of the performance of contracts to be excluded in the computation of time, and performance of such contract could be had upon the next succeeding business day, such intention could have been -expressed by appropriate words.

I find neither reason nor authority for placing so broad a construction upon this provision -of statute.

A tender not having been made within the life of th-e contract, plaintiff failed to make out a cause of action, and the defendant is entitled to a dismissal of the complaint upon the merits.

Decision may be prepared in accordance with this opinion.

Complaint dismissed.