McNamara v. Home Land & Cattle Co.

GROSSCUP, Circuit Judge, after the foregoing statement of facts, delivered the opinion of the Court: The contract, as a whole, contemplated a sale by the defendant in error to plaintiffs in error of its herd of stock cattle, including beef cattle, then ranging in Valley, Dawson and Custer Counties, Montana, and bearing a certain described brand. The contract mentioned the number as “thirty thousand more or less’’, but this was descriptive merely; the subject of barter was the herd of cattle, and, in the absence of deceit or fraud, no action would lie, merely because the number was less than the descriptive number mentioned in the contract. The contract contained a guaranty that of this herd, at least .nine thousand should be beef cattle and should be delivered during the season of 1897. The guaranty was of the highest consequence, for, though the beef cattle were much more valuable than the run of cattle in the herd, the contract price was uniform. But the guaranty was not one of ratio. It is not met and fulfilled by a tender of nine beef cattle out of every thirty of the cattle of the herd offered. It contemplated nine thousand beef cattle to be delivered during the season of 1897, irrespective of what should turn out to be the whole number of the herd, or of the beef cattle in the herd. Upon the matter of actual ratio the parties each took their chances. In our opinion, the contract required that the nine thousand beef cattle should be a part of the herd. Manifestly, such was the mind of the parties. It was this particular herd that was in mind when the parties came to an agreement. It is probable — at least conceivable— that the herd had been looked over before the agreement, and the agreement made in view of such inspection. To allow the vendor to supply beef cattle from outside, might result in the tender of cattle inferior to those in the herd. It would result, certainly, in disturbing the actual ratio, providing the herd contained thirty thousand head of which only nine thousand were beef cattle; and it was on this basis, and this basis alone, that the parties contracted. In this state of the contract, as we have interpreted it, the parties, near the close of 1897, (October 22, 1897) met at Oswego, Montana, to close up the transaction for the season of 1897. Already about sixteen thousand of the cattle had been shipped. Of these, including [800] those tendered on that day, seven thousand one hundred and thirty five were beef cattle; leaving a shortage of one thousand, eight hundred and sixty-five head under the beef cattle guaranty clause. Accepting the contract as fulfilled up to this date, there remained thus due defendant in error, including strays afterwards brought in, and the five hundred horses mentioned in the contract, $47,575.00. But if there were to be deducted $20.00 per head for the number of beef cattle undelivered, the balance would be $9,675.00. Here the parties split. The plaintiffs in error tendered the latter sum; the defendant in error stood for payment in full. Thereupon plaintiffs in error refused payment beyond the tender, filed their bill in the state court of Montana to have the contract specifically performed, and obtained the appointment of a receiver who took possession of the remaining cattle — about four hundred and fifty-seven in all. This receivership suit was subsequently removed to the United States Circuit Court for the District of Montana. The bill in the suit set forth the contract as already stated; its partiál performance by both parties; its breach by the vendor, defendant in error, in refusing to deliver fully, the nine thousand head of beef cattle; and the vendor’s insolvency. The answer of defendant in error denied these averments; alleged its willingness to perform1; and charged that the first breach of contract was committed by the vendees, in refusing to make full payment. The suit eventuated, in the Circuit Court, in a decree ordering specific performance, as to four hundred and fifty-seven head of beef cattle, by delivering the same to the defendants in furtherance of the terms of the contract. On appeal to the Circuit Court of Appeals for the 9th Circuit (49 C. C. A. 642, 111 Fed. 822), this decree was, however, reversed, and the cause remanded with instructions to dismiss the bill. The record in that case is now pleaded as an adjudication adverse to the defenses invoked by the plaintiffs in error, in the cause under consideration. We cannot concur in this view. Whether we look at the record of that cause, with or without the aid of the printed opinion of the Circuit Court of Appeals, we are convinced, that nothing was ever determined between the parties, save that under the facts and circumstances found by the Circuit Court, a bill in equity would not, as a matter of law, lie for the specific performance of the contract. Only under special circumstances will equity enter upon a specific performance of a contract respecting chattels, and those circumstances were absent from the cause as presented to the courts of the 9th. Circuit. Indisputably, these are the grounds upon which the decree of the Circuit Court of the District of Montana was reversed, and such reversal does not, therefore, embody an adjudication of the facts of the cause. Upon the trial of the case under consideration, in the Circuit Court for the Northern District of Illinois, plaintiffs in error offered evidence in support of their alleged set-off, tending to show that they would suffer damages. The damages claimed were measured, in the evidence offered, by the contract liquidation of $20.00 per head, and by the difference between the contract price and the value of beef cattle at the time the cattle ought, under the contract, to. have been delivered. This evidence was rejected, on the theory that plaintiffs [801] in error, having committed the first breach, cannot set off their damages in an action to recover the contract price; the argument being that the defendant in error had until November ist to supply the deficiency, and could, if it saw fit, have obtained such supply from outside the herd. This was, in our judgment, an erroneous application of the law. As already indicated, it would not have been within the right of the defendant in error to supply the missing beef cattle from outside the herd. The evidence submitted tended decidedly to show, that on the date when the difference between the parties was sprung, the parties had substantially reached the end of the round-up season of 1897. It was plain then, as it has since appeared, that the beef cattle called for in the contract were not in the herd. The vendees would not, under such circumstances, be required to pay the full price, and await the expiration of the eight or ten remaining days to have verified, by mere lapse of time, what both parties knew would be the certain outcome. The view taken by the Court, considering the whole situation, was an erroneous view of the respective rights of the parties. The Court should have admitted the evidence tendered upon this plea of set-off, as well as the evidence tendered upon the issue raised by the alleged failure of defendant in error to gather up and deliver the cattle remaining after the round-up of 1897; and for the Court’s error in that respect, and in directing a verdict for the defendant in error, the judgment below must be reversed with instructions to grant a new trial. ■