Loeb v. Stern

Per Curiam : In deciding this case the Appellate Court delivered the following opinion: “It is contended by the learned counsel for appellants that the agreement by which appellants undertook to buy back the mortgage notes in question at the election of Marcus Stern, is an option contract within the prohibition of section 130 of the Criminal Code. This contention cannot, we think, be sustained. The contract to buy back was contemporaneous with the purchase by Stern and part of the same transaction. The decision of the Supreme Court in Wolf v. National Bank, 178 Ill. 85, is in point and controlling. (See also Ubben v. Binnian, 182 Ill. 508). “It is contended that because no demand was made upon appellants to carry out the terms of the contract to re-purchase after the expiration of the thirty days named in the notes, therefore no recovery could be had. We regard this contention as untenable. Upon receiving the notice of Stern’s election to have appellants perform their undertaking to re-purchase appellants expressly notified Stern’s agent that they would not perform. This dispensed with need of any further demand. The law does not require the needless formality of demand in such case, it being apparent from the declaration of the parties that a demand would be unavailing. (Wight v. Gardner, 66 Ill. 94; Lyman v. Gedney, 114 id. 388; Gorham v. Farson, 119 id. 425). “It is also contended that the rights of Stern under the contract were waived when his representative proceeded to a foreclosure of the trust deed by which the notes in question were secured. “We are of opinion that the action of appellee in foreclosing the trust deed did not operate to estop her from claiming- damages for breach of the contract to re-purchase the notes. Assuming that contract to have been a valid and enforceable contract, and that appellants, upon their refusal to perform, became liable to appellee for breach of it, how was appellee to establish her measure of damages? If, upon the refusal of appellants to re-purchase, she had at once brought suit for breach of the contract, her claim to any substantial damages would doubtless have been met by the answer of appellants that, until she had enforced payment of the notes or disposed of them by sale, it could not be known that she was damnified in any substantial manner, and hence that she could recover nominal damages only. It was the duty of appellee to take such action, as might be reasonably calculated to reduce the damages resulting from appellants’ breach of the contract. Appellants refused to take back the notes. If they were to be enforced at all by foreclosure of the trust deed, it was for appellee to take this means of realizing upon them. In so doing she was, presumably, getting all out of the notes which could be realized by subjecting the land security to their payment, and to that extent she was by prompt action presumably decreasing the damages for which appellants were liable. We are unable to perceive any substantial difference between such action and the ordinary sale upon the market of goods which a contracting party should, but will not, receive in compliance with his contract to buy. In either case, it is simply the effort of the party damaged by breach of the contract to make the damages as slight as possible. “We think that there is no merit in the contention of counsel, that appellee should have sold the notes upon the market in order to establish the measure of her damages. The ground, upon which a vendor is required to sell upon the market the goods which the vendee refuses to receive in conformity with his contract, before seeking substantial damages from such vendee for breach of the contract to buy, is the duty of the vendor to realize all that he reasonably can upon the goods and thus lessen, in so far as he reasonably can, the damages resulting from the breach of the contract. This duty would be as well met by the reasonable efforts of appellee to realize all that she could upon the notes by foreclosure, as by sale of the notes, unless it appeared that by the latter method a greater reduction of the damages could be accomplished. The underlying reason and purpose of the rule is the reduction of the loss. In Sutherland on Damages, page 155, the author says: “ ‘Where damages can thus be saved by timely pre- ■ ventive measures, taken by the injured party, it is his duty to exert himself for that purpose, but he has a correlative right, in similar cases, to employ other means to' attain the object of the contract broken, which was within the contemplation of the parties at the time of contracting; or to extricate himself from any predicament in which the wrong complained of may have placed him.’ “It does not appear from the evidence that, at the time of the breach of the contract, the notes could have been sold upon the market, or that by sale of them, or in any other manner, appellee could have further reduced the damages caused by the breach of appellants’ contract. At the time of the appellants’ refusal to re-purcbase, one of the interest notes was overdue and unpaid. It would seem very doubtful if such paper could have been sold upon the market, except at a sacrifice, and that it could have been sold at all is problematical. There is no evidence to warrant a conclusion that it could. “Counsel also contend that parol evidence should have been admitted to show that the time within which the" election of appellee to re-sell the notes to appellants should be exercised, was limited, and that the right had expired by such limitation before appellee sought to enforce it. In this behalf it was sought to show that by oral agreement the time was in effect limited to the time of a proposed visit of Marcus Stern to the city of Chicago, he being a non-resident of that city. The written contract contains no limitation of time within which the option was to be acted upon. It is also urged that the time for the exercise of the option would be, in the absence of express provision in the written agreement, a reasonable time, and that to establish what was a reasonable time it was competent to show what the parties themselves regarded as a reasonable time by showing their conversations in relation thereto at the time of the making of the written agreement. “It is enough to say of these contentions that, if it was proper to allow any showing in this behalf to be made,- yet no competent evidence was presented by appellants by which any such facts could be established. “The mere statements by appellants to Glaser as to what they told Glaser at the time of the service of the notice upon appellants, being after the written agreement was made, could not establish these facts. Nor were appellants competent witnesses by whom to prove what was said by them and by Glaser at the time of the making of the original contract in writing. This suit was brought by appellee as administratrix with the will annexed of Marcus Stern, now deceased. Therefore, appellants were not competent to testify to the transactions accompanying the contract made in Stern’s lifetime. The fact, tha.t Glaser testified at the trial did not make appellants competent witnesses, except as to matters concerning which Glaser testified in behalf of appellee. Glaser, as a witness on behalf of appellee, did not testify at all to any of the transactions which occurred when the contract was made. Appellants could not by questioning Glaser upon cross-examination as to such transactions, thus make themselves competent as witnesses to the transactions, for he was, in thus testifying upon his cross-examination, not a witness on ‘behalf’ of appellee. Upon his direct examination as a witness on behalf of appellee, he did not testify at all as to such matters. The statute which makes parties in interest as litigants competent to testify, removing the disability imposed by the common law, makes certain exceptions. The statute is, in part, as follows: Section 2 of chapter 51 of the Revised Statutes, provides in general that no party to a civil suit shall be allowed to testify on his own behalf when any adverse party sues or defends as administrator, etc. Under this provision several exceptions are specified. By paragraph 2 it is in effect provided that when in such action, etc., any agent of any deceased person shall, in behalf of any person suing or being sued as administrator, etc., testify to any conversation or transaction between such agent and the opposite party, etc., then such opposite party may testify concerning the same conversation or transaction. This latter provision is an exception to section 2 of the act. Section 2 is an exception to the operation of section 1 of the act and section 1 is a modification of the common law rule as to disability of parties in interest. The question now presented is as to whether the testimony of appellants proffered as to conversations with Glaser, agent of Marcus Stern, had when the written contract was made, falls within the last exception noted, and is therefore competent. We think that it does not, and that it was properly excluded by the learned trial court. When Glaser testified ‘on behalf’ of appellee to transactions with appellants, it became competent for appellants to testify in relation to the same, but this did not open the door for testimony of appellants regarding other matters not testified to by Glaser. Nor did the questioning of Glaser upon cross-examination as to such other transactions, not touched upon in his testimony upon direct examination, make the testimony of appellants competent as to the same. For to that extent he was not a witness ‘in behalf’ of the appellee, within the provision of the statute. (Donlevy v. Montgomery, 66 Ill. 227). The facts being established without any conflict, it was for the court to determine whether the right of Stern was exercised within a reasonable time. (Chicago, Rock Island and Pacific Railroad Co. v. Boyce, 73 Illl. 510). “We are of the opinion that the court did not err in holding that in this case Stern had the right to enforce the contract when he gave the notice of August 10, 1896. “Evidence was proffered and excluded by the court as to the value of the mortgaged premises which were sold upon foreclosure of the mortgage lien in question. We are of opinion that in this there was no error. In the absence of any fraud or irregularity in the foreclosure proceeding, the price at which the property was sold is the conclusive measure of its value as a security of the notes in question and for the purposes of this suit. (Franklin v. Greene, 2 Allen, 519). “It can hardly be maintained that appellants had no notice of the foreclosure proceeding, for one of them was a party to the suit and appellants were co-pártners. “The questions of appellants’ rights under the deficiency decree in the event of payment by them of this judgment, is not, upon this record, a matter for consideration. To say that they would be equitably entitled to the rights of appellee under the deficiency decree, would be no answer to appellee’s claim to this judgment. “We are of the opinion that a clear right to the recovery was established, that no valid defense was shown, that substantial justice has been done, and that there is no reversible error in the proceedings of the trial court. Therefore the judgment is affirmed.” We concur in the views expressed in the foregoing opinion, and in the conclusion there announced. Accordingly, the judgment of the Appellate Court is affirmed. Judgment affirmed.