Stern v. Farah Bros.

OPINION OF THE COURT. I-IANNA, J. The first point contended for by appellants is that, “The instrument sued on amounted in law to no more than an agreement to make a binding contract in the future, provided the parties could agree upon its terms.” In support of this contention, instructions were ■asked by the defendants, appellants here, and refused, to the effect that the contract did not, at the time of its execution, bind either of the parties thereto to any action, and that either might lawfully withdraw at any time before the other had done anything in pursuance of said •contract; and, that before the prices for the merchandise were fixed in the manner prescribed by the contract either might recede, without incurring any obligation or liability to the other party by reason thereof; and that “if the jury believe that the defendants in good faith appointed Nathan Salmon to appraise the merchandise of the plaintiff and that said Salmon refused to proceed with the appraisement of his own volition and not because of anything said to Mm by defendants such appointment of Salmon constituted a full compliance with the agreement on their part and the jury should find for the defendants We are not prepared to say that the trial court erred in refusing the first two instructions, referred to 'above, because we can see possible obligations and liabilities that might flow from an election not to proceed with an agreement of this character. We are of the opinion, however, that error was committed in refusing defendants’ requested instruction No. 9, quoted above, and here set out in italics, and that this error was, of necessity, highly prejudicial to the case of the defendants. 1 In the matter of the consideration for a sale there must be an agreement, between the parties, upon the price or upon the manner in which it is to be determined. 35 Cyc. 47-48; Benjamin on Sales, sec. 87, laj^s down the law upon this question of the consideration in the following language: ‘‘It is not uncommon for the parties to agree-that the price of the goods sold shall be fixed by valuers appointed by them. In such cases they are, of course, bound by their bargain and the price when so fixed is as much a part ■of the contract as if fixed by themselves; but it is essential to the formation of the contract that the price should be fixed in accordance with this agreement, and if the persons appointed as valuers fail or refuse to act, there is no contract in the case of an executory agreement, even if one of the parties should himself be the cause of preventing the valuation. But if the agreement' has been executed by the delivery of the goods, the vendor would be entitled to recover the value estimated by the jury, if the purchaser should do any act .to obstruct or render impossible the valuation.” See also, Hutton v. Moore, 26 Ark. 382; Wittkowsky v. Wasson, 71 N. C. 394; Mechem on Sales, sec. 213; Fort v. Union Bank, 11 La. Ann. 708; Tiernan v. Martin, et al., 2 Bob. (La.) 523; Ellerton Hds. Co. v. Hawes, 122 Ga. 858; Pomeroy on Contracts, secs. 149 and 150; Nickers v. Nickers, 4 Eq. 529; Shepard v. Carpenter, 54 Minn. 153; Arnold v. Schardauer, 116 Fed. 492; Hopedale El. Co. v. Electric S. B. Co., 184 N. Y. 366; 1 Parsons on Contracts, 524. It is not contended in this case that any portion of the stock, or' fixtures, were delivered, and is admitted that Salmon was named by defendants as their appraiser and. declined to make such appraisement. There can be no question but that the written agreement between the parties would have resulted in a sale, if the conditions upon which the sale depended had been complied with, and both parties would then have been bound, but until the price was fixed the sale was incomplete. 2 The agreemnt was executory and provided, by its terms, the manner in which it was to be fully consummated. Can it be said that the court had the power to make a new agreement between the parties, or to permit one of the parties to vary its express terms and arrive at a valuation of the goods by a method not provided for, or outside of the terms of the agreement, and, that after such calculation is thus arrived at, to make it the measure of damages sustained? We do not think so. However we may view the question of good morals, or good conscience, in a case such as this, it is not for us to make a new contract between these parties, or to give force and efficacy to a departure, by one party, from the terms of the alleged contract. When Salmon refused to act as appraiser, Stern has no authority to designate other appraisers to make the appraisal of the stock. It has been held in the case of Elberton Hdw. Co. v. Hawes, supra, that “Where parties to an executory agreement for the sale of goods agree that the price to be paid for the property shall be fixed by them, there is no contract of the sale if the persons appointed as valuers fail or refuse to act; and this is true even where one of the parties to such agreement is the cause of such failure or refusal.” With this holding we fully agree, and after careful examination of all the authorities available we are compelled to conclude that the principle is controlling in this case. This well considered Georgia case, (Elberton Hardware Co. v. Hawes) supra, which in point of fact has much similarity to the case at bar, went further in holding that, 3 “Where one of the persons nominated in such an agreement as valuers refuses to act, the oth'er has no power, without the consent of both parties to the agreement, to select a third person to act as a valuer in the place of the person so refusing.” With this view of the question we likewise concur, and it necessarily follows that one of the principals could not select a valuer under such circumstances. We note the contention of the appellee that a breach of contract, as alleged in the case at bar, givés rise to an action for damages, and that such damages are those which were, or ought to have been within the contemplation of the parties when the agreement was made or when the breach occurred. The authorities cited by appellee in support of this contention, are all cases where the property'had been delivered, or defendant had come into possession of the same, and are clearly within the -exception to the rule laid down in 1 Benjamin on Sales, sec. 87. See also Elberton Hdw. Co. v. Hawes, 122 Ga. 858, 2t 865. Had this been an action for damages in connection with services rendered by plaintiff in procuring the lease for defendants, much greater weiglit could be given to the contentions of appellee, but the purpose of insisting upon and recovering under the alleged contract' of sale is quite evident. ■ An effort was clearly made by appellee to comply, as nearly as possible, with the conditions pertaining to a valuation of the merchandise, and that value is sought to be made controlling of the measure of damages in this case. It follows, in our opinion, that the court erred in' the matter of refusing the instruction referred to. Our conclusion as to this point in the case malees it unnecessary for us to pass upon the remaining numerous assignments of error, except in the matter of alleged error in the trial court’s refusal to direct the jury to find for the defendants for the recovery of the money paid and interest. The instruction requested was as follows: “The court instructs the jury to find the issues for the defendants and assess their damages on their counter' claim at the sum of five Iximdrecl dollars, with interest thereon at six "per cent per annum from the 20th day of January, 1909, until this date.” Our conclusion in this case necessarily results in our agreeing with this last contention of appellant. The five hundred dollars paid was in part performance of an incomplete agreement, which has never become an executed contract. Not only the merchandise, but the fixtures as well, were sold to third parties and never came into the hands of appellants, in whole or in part, therefore, the consideration cannot be retained, or treated as liquidated damages in. the absence of an agreement to that effect. We find error in the refusal of the last mentioned instruction. For the reasons giv.en, the judgment of the lower court is reversed and the cause remanded with instructions to enter judgment in the District Court of Bernalillo County in favor of the defendants in this cause and against the plaintiffs for the recovery of the sum of five hundred dollars, with interest from the 20th day of January, 190£. until paid, and their costs.