Mitchell v. Taylor

41 P. 119, 27 Or. 377, 1895 Ore. LEXIS 67

Opinion

Opinion by

Mr. Justice Wolverton.

In support of the action of the court below the defendant submits several propositions, only three of which we are called upon to notice at this time, viz.: first, the agreement to repurchase upon which the action is based is, by the terms thereof, made conditional upon the personal desire, or at the option of Cornell or his legal representatives, and therefore not assignable; second, Cornell being in default with the Columbia River Fruit Company upon his contract therewith, could not compel the defend ant to repurchase it in its defaulted condition; and, third, plaintiff’s remedy in a court of law, if he is in other respects entitled to recover, is for the damages which he has sustained by the breach of the contract, and the measure of damages is the difference between the true value of the property and the price agreed to be paid therefor. Aside from these propositions, there is a question as to whether there is evidence in the record sufficient to carry the case to the jury. Of these in their order.

1. Defendant’s counsel claims that, as Taylor agreed to repurchase this stock “if D. B. Cornell or his legal representatives so desire,” he could not be compelled to repurchase if any one else besides Cornell or his legal representatives so desired, and hence that this contract, in so far as it stipulates for an option to require a repurchase of the stock on the part of Taylor, is not assignable. The contention is that Taylor contracted for the personal act of Cornell, if living, or, if dead, of his legal representatives, and that none other will fill the measure of the agreement. The criterion by which to determine the assignability of things in action is to ascertain what demands survive upon the decease of a party, and what die with him. Those only which survive are assignable. Those that do not survive are: all torts to the person or character, when the injury and damage are confined to the body or the feelings, and generally, though not always, those implied contracts, the breach of which produces only direct injury and damage, bodily or mentally, to the person; and contracts, so long as they are executory, which stipulate solely for the special personal services, knowledge, and skill of a contracting party: Pomeroy’s Code Remedies, § 147. The reason why a contract for special personal services does not survive, and consequently is not assignable by the person obligating him S3lf to perform, the services, is that it is presumed the services were sought on account of the peculiar skill and fitness of the person employed to perform the particular work or task in hand. There is here no peculiar fitness or skill required on the part of Cornell to assert a desire to have Taylor repurchase. Indeed, Cornell is not required to perform any kind of service, nor is he required to enter into any personal obligation with Taylor as an act prerequisite to or concurrent with the demand for a repurchase of the stock. Cornell is accorded a right under the contract, which he may assert or not at his option. It is valuable to him as he might be able to better his condition by an exercise of it. Whether he exercised the right personally or by an agent, directly or indirectly, could make no sort of difference to Taylor. It could impose no additional burden upon him, nor change the contractual relations to his detriment in any material respect; so that the reason upon which the nonassignability of a contract for special personal services or skill is based does not exist here. That an option is assignable in equity there is no longer any doubt: House v. Jackson, 24 Or. 99 (32 Pac. 1027); Kerr v. Day, 14 Pa. St. 112 (53 Am. Dec. 526). It is said in La Rue v. Groezinger, 84 Cal. 289, (18 Am. St. Rep. 179, 24 Pac. 42,) that “An optional contract upon sufficient consideration is binding. And the mere fact that it is optional cannot be a reason why it should not be assigned. ” We conclude, therefore, that the Cornell-Taylor contract was assignable by Cornell before asserting his option, and that he could thus transfer his interest therein together with any right of action arising thereunder to the plaintiff.

2. It is next contended that Cornell was in default with the company at the time plaintiff asserted his option to have defendant repurchase, and that for this reason defendant could not be compelled to take the defaulted contract off his hands. This involves a consideration of both contracts, and of their relations one to the other. The execution by Cornell of the contract with the company was the sole and only consideration for the execution by Taylor of his contract with Cornell. Hence it must be presumed that Taylor contracted with reference to the company contract, and had in view at the time the-rights accorded to Cornell by its terms and stipulations. The company contract is not a sale of stock to Cornell, but an agreement to sell and transfer a certain number of shares in the future. This is manifest from the fact that the stock was not to issue until Cornell had fully paid the stipulated price of four thousand dollars; SO' that, instead of acquiring stock with which he could deal directly, he merely obtained the obligation of the company to issue and transfer to him ten shares of stock in the future. The Taylor contract is, in substance: “I, O. D. Taylor, * * * in consideration of the purchase by D. B. Cornell * * * of ten shares of stock in the Columbia River Fruit Company, paying therefor one thousand dollars in cash, and agreeing to pay one thousand dollars annually until the par value is paid, do hereby agree to repurchase said stock, if D. B. Cornell or his legal representatives so desire, at any of the stated dates of payment, and to pay therefor the sum or sums actually paid in cash by Cornell with eight per centum annual interest on said sum so paid.” This latter was, therefore, not a contract to repurchase stock of Cornell, but a contract to purchase of him his right to obtain ten shares of stock in the company acquired by virtue of his contract therewith. In effect, it is an agreement to take Cornell’s contract off his hands if he so desired. If this agreement is not capable of this construction it is nudum pactum, and of no binding force or effect whatever. The ten shares of stock alluded to herein are the same which Cornell contracted with the company for, and which it agrees to issue to him upon completion of his payments. The Taylor contract contemplates a purchase from Cornell before he (Cornell) can acquire the' title, and even before the company is required to issue the stock; so that when his contract stipulates for the repurchase of stock it simply amounts to an agreement on Taylor’s part to purchase of Cornell, at his option, at any one of several stated times, the company’s agreement with Cornell, and thereby be placed in such position under the contract, that he, Taylor, may comply with the conditions thereof, and thus acquire the stock for himself. This construction seems reasonable in the light of the two contracts and the surrounding circumstances. The two contracts are incapable of being construed as parts of one as the parties to each are not the same; but the Taylor contract should be construed with reference to the conditions of the company contract, as the rights acquired under the latter constitute the subject matter of the former. Now, Cornell has undertaken, by the terms of the company contract, to pay four thousand dollars for the stock, as follows: “One hundred dollars to be paid at the signing of the contract (March twenty-fourth, eighteen hundred and ninety-two,) for each share of stock hereby subscribed and taken, * * * and one hundred dollars annually thereafter for each share so subscribed by him until the full amount subscribed is paid. ” He made the first payment of one thousand dollars as agreed, but no other payment has been made on said contract either by Cornell or plaintiff. After having defaulted in the payment of one thousand dollars, due March twenty-fourth, eighteen hundred and ninety-three, and at the date when the second deferred payment became due, (March twenty-fourth, eighteen hundred and ninety-four,) and without paying it, the plaintiff, the sue cessor in interest of Cornell, declared his desire to have defendant “repurchase,” and at the same time tendered the stock contract with an assignment thereof to Taylor, and demanded payment of one thousand dollars, with interest at eight per cent, per annum from March twenty-fourth, eighteen hundred and ninety-two. Taylor refused to comply with the demand, and, it is contended, refused to accept the assigned company contract. He now claims that he was not compelled to take the company contract in its defaulted condition, and that it was incumbent upon plaintiff to tender him a perfect one that he could enforce without question. The effect of a failure to make payment of an installment of the purchase price falling due at a stated time may or may not preclude an action for breach thereof, and depends somewhat upon other facts and circumstances attending the default. If the breach is the result of accident or oyersight, or is accompanied with facts and circumstances inconsistent with an intention to abandon, and which incline one to presume the buyer intended fully to perform, then the failure to pay an installment at the agreed time does not work a forfeiture of the whole contract, and by a subsequent tender of the installment with further installments due he may claim the benefit of the sale: Tiedeman on Sales, § 210; Hime v. Klasey, 9 Ill. App. 166; Winchester v. Newton, 2 Allen, 492. But if the acts of the buyer in failing to comply with his agreement in making payment of an installment indicate an intention to abandon the contract, as where the refusal to pay is wilful, and not through inadvertence or accident, the contract is thereby held to be forfeited, and the seller cannot be compelled to perform. So, a refusal to pay because of one’s pecuniary inability, if more or less continued, would create a presumption that the purchaser intended to abandon further performance: Tiedeman on Sales, § 210; Curtis v. Gibney, 59 Md. 131; Bradley v. King, 44 Ill. 339; Robson v. Bohn, 27 Minn. 333 (7 N. W. 357). If this view of the law touching the effect of defaulted payments is correct, it is, to say the least, questionable whether the company contract could now be enforced against it, and would be a matter for the determination of a jury. It is apparent, therefore, that the contract tendered to Taylor was not free from infirmities, which infirmities are the result of plaintiff’s failure to comply with its terms and stipulations. Taylor did not agree to accept sueh a contract of doubtful validity, and hence was not guilty of a breach of his contract with Cornell if he declined to accept and to repay the money with interest paid by Cornell on the company contract. Plaintiff should have tendered a contract unimpaired by any default on his part, before it was incumbent upon Taylor to accept, and without which plaintiff could have no action against Taylor. The foregoing conclusions render an examination of the third point unnecessary, as plaintiff cannot maintain an action in either case, whether upon the contract for the purchase price, or for breach thereof and for damages, unless Taylor has accepted the contract tendered with its infirmities, in which case he would be deemed to have waived the objection thereto arising from the default, and plaintiff’s action for the agreed price would then be appropriate.

3. We come now to the question whether the case should have been sent to the jury, and this must be determined under the pleadings as they come here, including the supplemental complaint, answer, and reply. It appears that the supplemental complaint, filed without objection, alleges an acceptance by Taylor subsequent to the commencement of the action, and, no exceptions having been taken to it either by demurrer, motion, or otherwise, it is now too late to make the objection for the first time in this court, that no cause of action existed at the date of the commencement thereof: Lowry v. Harris, 12 Minn. 267; Smith v. Smith, 22 Kan. 702. The turning point in the trial was whether Taylor did or did not accept from plaintiff the company contract, and thereby become responsible to him for a repayment of the sum of money paid thereon with interest. We think there was evidence on this question which should have been allowed to go to the jury. The testimony of Johnson showing that Taylor took the assigned company contract from the clerk’s' office with knowledge of what it was, and retained it for a considerable length of time, had a tendency to support plaintiff’s contention that Taylor did accept, and it was the province of the jury to say from this testimony, when taken in connection with Rorick’s, whether he did or not. The court below was in error in granting the nonsuit, and its judgment is therefore reversed and a new trial ordered.

Reversed.