Buck v. Carlisle

McCLELLAN, J. Samuel Buck, tbe plaintiff below and appellant here, and Milton Humes paid Hugh Carlisle five hundred dollars for an option to accept and enter into a certain contract with tbe Tennessee and Coosa Rivers Railroad Company at any time during a period of fifteen days, tbe period to begin at a specified date in tbe future. This arrangement was made on tbe part of Buck and Humes in tbe name of James E. 0’Shaughne.ssy, and tbe agreement, in writing, of Carlisle was to bold open and extend to O’Sbaugbnessy for tbe period mentioned tbe privilege of accepting and entering into tbe contract, all tbe terms of which are set forth m tbe writing, with tbe company ; but tbe evidence adduced on tbe trial below goes to show tbat O’Sbaugbnessy in reality bad no interest in tbe agreement for tbe option and was to have none in tbe contemplated final contract, but tbat Buck and Humes with 'bis consent used bis name in tbe transaction. Two thirds of tbe five hundred dollars was paid by Buck, and tbe remaining one third by Humes. Tbe agreement for tbe option was entered into by Buck and Humes and tbe consideration therefor was paid by them upon tbe assumption and representation by Carlisle tbat be owned a controlling interest in tbe stock of tbe railroad company and also was fully invested with power and authority to bind tbe company in the terms which tbe contemplated contract was to embody. It transpired that all tbis was otherwise than as so assumed and represented; tbat in point of fact Carlisle did not own a majority of tbe stock and was wholly without authority to bind tbe corporation in tbe manner proposed, and hence tbat tbe obliga [584] tion nominally made by him to O’Shaughnessy was wholly incapable of performance. Upon the theory that the consideration for which the five hundred dollars were paid had failed, or was utterly wanting, and that he as beneficial owner of the claim of Humes for the one third of that sum paid by the latter, Buck alone brings this action in assumpsit for the recovery of the whole. On the trial many rulings were made adversely to the plaintiff on the competency of testimony, and the sufficiency of two special counts added by amendment to the complaint which originally contained only the common count for money value received, and on plaintiff’s right to file a 4th count setting up fraud, misrepresentations, &c. &c., on the part of Carlisle as the basis for recovery of the money paid on the contract which by these undue means he was induced tb enter into. On the view we take of the case it will not be necessary to consider these rulings in detail. So far as they were prejudicial to the plaintiff, or rather such of them as were prejudicial, they, as also the court’s action in giving the affirmative charge for the defendant, were based on the idea that the contract had been made by plaintiff in the name and as the agent of O’Shaughnessy, that there was no evidence of a transfer of it by the latter to the plaintiff and none that O’Shaughnessy had ever elected to rescind it, and that until there was an election to rescind by O’Shaughnessy, neither he nor the plaintiff could maintain assumpsit for the money paid in consideration of Carlisle’s undertaking. The record fully supports this position in the matters of fact involved in it. The contract was made, as we have seen, by Buck and Humes, or by Buck, Humes paying a part of the money, in the name of O’Shaughnessy. Certainly as between them and O’Shaugh-nessy on the one hand and Carlisle on the other they were the mere agents of O’Shaughnessy; it does not appear that Carlisle knew aught to the contrary. It is not pretended that O’Shaughnessy has ever transferred the contract to Buck, or that he has rescinded it. If the conclusion drawn by the trial court from these facts is a sound one Buck can not recover in this action at all on the case he fully developed in the evidence, and whether the court erred or not in other rulings would be immaterial .since the defendant was, on these assumptions, entitled to the affirmative charge given by the court on the merits of the case. We think the conclusion was sound. So long as the contract stood in the name of O’Shaughnessy, that is, until he transferred and assigned it, which he had not done when this suit was brought nor when the trial was had, he undoubtedly had the right [585] to maintain an action in bis own name against Carlisle for tbe breach of it shown in the evidence offered by the plaintiff, and to recover in such action damages therefor. In such action one item of damage would be the five hundred dollars paid for the option. Carlisle would be precluded by the writing to say that this sum was received from and belonged to Buck. Whatever transpired meantime between him and Buck in regard to it, this litigation and all possible results of it included, would be res inter alios acta ao for as O’Shaugh-nessy might be concerned. Full payment of the sum by Carlisle to Buck, upon the coercion of judgment and execution or otherwise, would afford him no defense to O’Shaugh-nessy’s action. If the present suit is maintainable, in other words, Carlisle may be compelled to repay this sum twice over — once to Buck, because the latter paid it to him in the name of O’Shaughnessy, and again to O’Shaughnessy, because Buck ostensibly — and really so far as Carlisle was concerned — as the agent of O’Shaughnessy entered into a written contract in the latter’s name with Carlisle. This demonstrates what absurd and unconscionable results the maintenance of the present suit would admit of. It is to avoid just such results that the law'interdicts suits to recover back money paid on a contract where the consideration has failed until that party to the contract in whom the election rests has determined whether he will rescind the contract and brings assumpsit for the money paid, or will hold the other party to the contract and bring an appropriate action, which assumpsit is not, sounding in damages for the breach of it. Buck could not rescind this contract. O’Shaugh-nessy, who could, has not rescinded it.. On this state of the case Buck can not recover, and the court did not err in giving the general affirmative charge for the defendant; and this ruling would have been equally free from error had all the evidence offered by the plaintiff, and at first admitted, been allowed to remain with the jury. Something is said in briefs of counsel about the beneficial ownership of this contract being in the plaintiff, and to the effect that for that reason he is entitled to maintain this suit under section 2594 of the Code. There are several reasons for denying all advantage to plaintiff based on this consideration. One is that the contract is not one for the payment of money, and hence is not within that section. Another is that the present action is not based on the contract at all, but proceeds on the assumption that the contract has been destroyed by rescission. And yet another is that a contract can not be rescinded efficaciously except by the parties to [586] it — those bound, by its terms whether original parties or transferrees — not persons having no connection which the law recognizes, with the writing, but merely some beneficial interest in its terms. The judgment must be affirmed.