Stover v. Flack

By the Court, Miller, J. Several important questions were raised by the defendant’s counsel upon the argument of this cause, which I will proceed to consider. I. It is urged that the agreement between the defendant and the intestate was not a legal and valid contract by which the defendant became the owner of one-half of the stock subscribed for, or liable to pay the moneys advanced for the same, The authority of the intestate to purchase the stock in his own name, on the joint account of himself and the defendant, I think was sufficiently established by parol, and a written instrument executed by the defendant was not necessary for that purpose. The intestate was acting for the benefit of both parties, and he was agent for the defendant in the purchase. In Burr v. Wilcox, (22 N. Y. Rep. 551,) it was held that one for whom stock had been purchased by an agent is a stockholder, although the stock has been apportioned to the agent, for the principal. (See also McWhorter v. McMahan, 10 Paige, 386; Lawrence v. Taylor, 5 Hill, 107.) The purchase of the stock having been made by due authority, for the joint benefit of the parties, although in the name of the intestate, the defendant was in fact the owner of one-half of it. The act of one of the parties being the act of both, no written assignment of the stock was necessary to make the defendant liable. It was not a mere beneficial interest to be [168] enjoyed at Ms pleasure or volition, but an obligation wMch he, through his agent, and as a joint owner, had assumed, and which made him liable to his copartner in the transaction, for his proportionate share. (Bank of Rochester v. Monteath, 1 Denio, 402. Wright v. Hooker, 6 Seld. 51.) The defendant never demanded a transfer of the stock, and although an assignment was actually tendered to him before suit brought, he declined to accept it. He certainly has no reason to complain if his own act has prevented an assignment. II. It is said that the defendant was not liable to pay for the stock except upon a sale of it in market, upon notice. There is no such stipulation in the contract; nor do I find any thing to warrant that interpretation of it. I have already discussed the question as to how far the defendant was the owner of the stock under the agreement, and it is unnecessary to enlarge upon that subject. It is however proper to observe in this connection, that there is a wide and manifest distinction between a contract where the right to sell stock is reserved for the benefit of the pledgee, and one where a sale of property is made containing a covenant that the vendor shall do certain acts which will materially enhance the value of property sold, and the failure to perform which must necessarily produce great loss and injury. In the latter case the party injured may very properly avail himself of a failure to perform when prosecuted for the consideration money. In the former I do not discover any good ground upon which the reservation of a right to sell can be considered as a condition precedent. The reservation was made for the benefit of the intestate, to secure him for the moneys advanced, and not as a condition of the defendant’s liability. It was but a cumulative remedy, without impairing any other rights. (Troy Turnpike Co. v. McChesney, 21 Wend. 296. Ogdensburgh R. R. Co. v. Frost, 21 Barb. 541. Northern R. R. Co. v. Miller, 10 id. 271. Troy and Boston R. R. Co. v. Tibbits, 18 id 297.) In case the intestate did sell, the defendant was liable to pay whatever loss was sustained. Even if it did not [169] by the terms of the agreement rest with the intestate to determine whether he should sell or not, there was no request made by the defendant to sell, and I do not see that the defendant was injured in the least by not exposing the stock for sale, as there is no evidence that the stock could have been sold so as to benefit him. But, independent of this view of the matter, the charge of the judge to the jury that Stover was not bound to sell the stock in market before commencing a suit, if it was worthless, virtually left it for them to determine whether the defendant had lost any thing in consequence of a failure to sell the stock; and as they have found against him on that point there is no ground for complaint. III. If any question can arise as to an implied promise where the doctrine of principal and agent, and of liability arising from the action of one of two joint parties is applicable, perhaps a promise to pay may be implied from the facts presented in this case. I deem it however unnecessary to discuss that question, as it appears that the promise was express and absolute, in the contract. The intestate bought and paid for the stock at the defendant’s request, under an express agreement that the defendant was to pay him for the moneys advanced, the intestate holding the stock in the mean time for the defendant as a pledge for repayment, with a right to expose it for sale in the market, if upon notice the defendant refused to pay for it. Here'was an absolute agreement to pay the money, which was ratified by the subsequent acts and conduct of the parties. IV. I do not regard the agreement as inchoate and imperfect because the parol negotiation was not reduced to writing and signed by the parties, as was originally intended. The stipulation that the contract should be written was not an essential element of vitality. It was not the writing which would render it effective. This was only the means provided for making the agreement more definite and certain. If the parties chose to do so, and actually did execute the contract without a writing, they had a perfect right thus to dispense [170] with it and waive it, although such a condition might he enforced in equity upon a refusal of either party to execute a written contract. A party may waive a condition precedent to an agreement by entering upon its performance. (Betts v. Perine, 14 Wend. 219. Grote v. Grote, 10 John. 402.) Some of the evidence in this case shows that the defendant claimed the benefit of the parol agreement and to own the stock after the intestate had declined to sign the writing, and I think the judge properly submitted to the jury the question of fact which arose upon the testimony whether the understanding or agreement that the contract should be reduced to writing was waived by the defendant. V. The point now urged, that conceding a perfect agreement, it was broken by Stover so as to discharge the defendant, does not appear to have been distinctly taken on the trial at the circuit, and cannot be made available now. VI. I think the contract was not void by the statute of frauds, because (1.) It was partially executed and carried into effect. (2.) There was no sale of the stock by the intestate to the defendant. The purchase of the stock was made in the name of the intestate by both parties and for their joint benefit, by the authority of the defendant. It appears to me, therefore, that no question arises under this statute. VII. The action was not barred by the statute of limitations. (1.) The intestate paid the money for the stock, on the 23d of March, 1853, within six years before the commencement of the suit. The defendant could not be liable to pay prior to the advance of the money, and the statute would not commence running before the payment. (2.) The amount of personal liability incurred by reason of holding the stock was not paid until the 28th of February, 1859. (3.) It may perhaps be questionable whether the statute began to run before a demand or before a settlement and a balance struck between them as joint owners of the stock. VIII. The offer made by the defendant’s counsel, to prove that Stover did not at any time during his lifetime make an [171] offer to or a demand of the defendant with reference to the stock was properly rejected by the justice. In the absence of any evidence to show that he did make such offer or demand the law presumes that he did not. The defendant had the benefit of this legal presumption, and his case would not have been strengthened by any negative evidence. [Albany General Term, December 1, 1862. IX. It is insisted that the judgment was erroneous to the extent of five hundred dollars paid upon the debts of the company in February, 1859, with interest from that date. (1.) I am inclined to think that Stover was not a trustee, within the provisions of the general act of 1848. (Laws of 1848, ch. 40, §§ 16, 24.) (2.) Stover had signed individually and not as trustee, and could not avail himself of a fact not known at the time of his subscription, as a defense. (3.) Stover and the defendant were joint partners in the subscription, and when one partner buys for both it is not a trust. In 22 N. Y. Rep. 552, 553, it was held that the relation between the parties in a similar case was not that of a trustee and cestuis que trust, but that of principal and agent. (4.) But no such point was made in the court below, and it is too late to present it now. In conclusion, upon the facts of the case the jury have found in favor of the plaintiff, and there is no such preponderance of evidence upon the main issues as would authorize this court to set aside their verdict upon that account. A new trial is denied, and the judgment affirmed with costs. Hogeboom, Peckham and Miller, Justices.)