Snow Storm Mining Co. v. Johnson

ROSS, Circuit Judge (after stating the facts as above). Section 6009 of the Revised Codes of Idaho, in which state the suit was brought, declares various agreements invalid unless in writing, among them the following: “An agreement for the sale of goods, chattels, or things in action, at a price not less than two hundred dollars, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action, or pay at the time some part of the purchase money.” The statute of Washington upon the subject is substantially the same. Section 4577, Ballinger’s Annotated Codes & Statutes. Stock in corporations is embraced by such statutes. Franklin v. Matoa Gold Min. Co., 158 Fed. 941, 944, 86 C. C. A. 145, 16 L. R. A. (N. S.) 381, and cases there cited. It is conceded by the appellants that the oral understanding had between the appellee and the appellant Nicholls over the telephone, falls within the statute; but they insist that the appellee’s letter to Nicholls of date December 20, 1905, together with the bond contained therein, and his letter of date December 29, 1906 (1905), to the secretary of the Snow Storm Mining Company, constitute an executed sale, thereby passing title to the stock in question to the appellant Nicholls. In the Elgee Cotton Cases, 22 Wall. 180, 187, 22 L. Ed. 863, the Supreme Court said: “It must be admitted there is often great difficulty in determining whether a contract is itself a sale of personal property so as to pass the ownership to the vendee, or whether it is a sale on condition, to take effect or be con-sumated only when the condition shall be performed, or whether it is a mere agreement to sell. It is doubtless true that whether the property passes or not is dependent upon the intention of the parties to the contract, and that intention must be gathered from the language of the instrument. There are, however, certain rules for the construction of such contracts, which are well settled in England, and, we think, also in this country. Mr. Justice Blaek-burn, in his work on Sales, states two of them, and Mr. Benjamin, in his treatise, adds a third. They are as follows: “First. ‘When, by the agreement, the vendor is to do anything to the goods for the purpose of putting them into that state in which the purchaser is bound to accept them, or, as it is sometimes worded, into a deliverable state, the performance of those things shall, in the absence of circumstances indicating a contrary intention, he taken to be a condition precedent to the vesting of the property.’ “Second. 'Where anything remains to be done to the goods for the purpose of ascertaining the price, as by weighing, measuring, or testing the goods, where the price is to depend on the quantity or quality of the goods, the performance of these things shall also he a condition precedent to the transfer of the properly, although the individual goods be ascertained and they are in the state in which they ought to be accepted.’ “Third. ‘Where the buyer is by the contract bound to do anything as a consideration, either precedent or concurrent, on which the passing of the property depends, the property will not pass until the condition be fulfilled, .even though the goods may have been actually delivered into the possession of the buyer.’ [752] “These may be regarded as rules for ascertaining the Intention of the parties. They are in most eases held to be conclusive tests. Though not supported by ail the decisions, they certainly are generally accepted in England, and by most of the courts in this country.” The second of the above-stated rules of interpretation is not applicable to the present case, but the first and third are. Tested by them, we think- it very clear that the letters and bond relied upon by the appellants do not show an executed sale of the stock in question. It is true that in the letter of the appellee to the secretary of the company, he-says', “I have sold this stock”; but that is by no-means all that he says therein. He commences the letter by saying that lie inclosed certain newspaper notices which were self-explanatory, and which manifestly were the published notices required by the by-laws of the corporation of the holders of its stock who had lost their stock certificates and desired-a new issue in place of those lost or- destroyed. The writer of the letter proceeds: ‘“You will greatly favor me if you will send me a statement over tlie seal and signature of the Snow Storm Co. to the effect that I (not the appellant Nicholls) am the owner of 1,500 shares of Snow Storm stock and that a eer-tificate of same will be issued to me soon as these notices have run the agreed length of time — sixty days.” And it concludes with these words: “X have sold this stock and have given a bond to the purchaser to deliver same in sixty days. Now he. wants a statement from you that I own this stock and that you will issue this certificate soon as I have complied with the law in the cáse. Please let me hear from you soon as possible.” ■ As a matter, of course, to ascertain the true meaning of the letter, the whole of it must be considered. The case here is altogether unlike..that of Beardsley v. Beardsley, 138 U. S. 262, 266, 11 Sup. Ct. 318, 34 L. Ed. 928, relied on by the appellants. There the words of the contract involved implied nothing executory, but something executed. Here the letter- under consideration plainly implied that everything was executory and nothing executed. Neither in this letter nor in the one of the appellee-to the appellant Nicholls of December 20, 1905; inclosing ■ the indemnity- bond to him, was there any mention of tlie payment of the consideration for the stock, either as to time of payment or amount thereof, nor was there any statement or -intimation- as to the time or place for the deliveiy of the stock. The letter containing the words-, “I have sold this stock,” so much relied upon by. the appellants, expressly requested that the company issue to.the appellee a new certificate in place of the one destroyed, and also a statement to the effect that he (the appellee) was then the owner '.of the 1','500' shares, which statement the letter further expressly, declared tlie purchaser wanted. Why? 'If the sale had been consummated and the title to the stock had passed to the purchaser,-why should^ the certificate be issued to the seller as owner? The rea.son, we think, is obvious enough from the letters relied upon by the. ’appellahts. It is still more obvious when tlie petition for in-tei-yen.tion- a-n.d: the cro.ssrcómpl.aint filed by the. appellant Nicholls, as well-as-his--testimony-and other, evidence-in the-cause, is considered. It is that the sale had not been consummated, no part of the purchase [753] price of the stock had been paid, nor had the time arrived under the contract between the parties for the delivery of the property agreed to be sold. If anything more be needed to show that the contract relied on by the appellants was not a completed sale thereby passing title to the stock, it is shown by the letter of the appellant Nicholls to the appellee of March 1, 1906, in which, among other things, he says: “When you left here in December it was agreed that if the trade did not stand you were to write me to that effect at once, and ask for the return of the bond.” Turning to the petition filed by the appellant Nicholls for leave to intervene in the cause, we find these allegations: “That on or about December 10, 1905. the complainant in the said suit entered into a contract with your petitioner herein, whereby your complainant agreed with your petitioner to sell, and did sell, to your petitioner the 1,500 shares of the capital stock of the Snow Storm Mining Company referred to in the said bill of complaint, at the agreed price of 20% cents per share; and further agreed with your petitioner that in view of the loss and destruction of the certificate for said 1,500 shares of stock, as set out in the said bill of complaint, he, the said complainant, would do all things necessary to procure from the said Snow Storm Mining Company a now certificate for said stock, and would deliver the same to your petitioner; and especially that he would procure from the said Snow Storm Mining Company a statement that it would so issue said now certificate for said 1,500 shares of stock. That it was further agreed by and between the parties to said Agreement that the purchase price for the said 1,500 shares of stock, amounting in all to the sum of $597.50, should be paid by your petitioner to -the complainant herein, upon the procurement by the said complainant of the said statement from the said Snow Storm Mining Company, or upon the doliverj" of the said new certificate. “That thereafter the complainant herein refused and failed to procure such statement from the said Snow Storm Mining Company, and refused to do those tilings necessary to procure said statement from the said Snow Storm Mining Company, or to procure the said new certificate, to wit: lie refused to execute the indemnity bond prescribed by the by-laws of the said corporation for the issuance of new certificates in lieu of lost or destroyed certificates, and that your petitioner thereafter himself gave to the Snow Storm Mining Company the indemnity required by the said company as security, and, thereupon, on the 20th day of February, 190(5, the said Snow Storm Mining Company issued to your petitioner a new certificate, being No. 1,705, for the said 1,500 shares of stock referred to in the bill of complaint herein, and thereupon and forthwith your petitioner, waiving tile default of the complainant above set forth, tendered to the complainant herein the agreed price for the said stock, to wit, the sum of $:>97.50, which the said complainant refused to accept, and that your petitioner thereafter, and upon the 1st day of March, 1906, again tendered the said amount to the complainant heroin, who again refused to receive or accept the same, and that your petitioner ever since has kept the said tender good, and has been able, ready, and willing to pay to the said complainant the said amount, and still is ready, able, and willing to pay said amount and perform any and all conditions of said contract as are and were by him to lie kept and performed, and hereby tenders and offers to perform all the conditions of said contract.” The cross-bill contained similar allegations. That an essential part of the contract between the appellee and the appellant Nicholls rested in parol is not only plainly shown by the pleadings of the latter above referred to, but also from the testimony given by him to the effect: [754] “That on the 19th day of December, 1905, the complainant herein, Andrew Johnson, had a conversation with the intervener, W. A. Nicholls, in the course of which he stated that he was the owner of 1,500 shares of the stock of the Snow «Storm Mining Company, for which he had lost .the certificate, and which he offered to sell to the said Nicholls at 26% cents per share. The said Nicholls stated that he would take the stock at that price, as he had a client who would take it off his hands. The said Johnson at that time stated that he would take whatever steps were necessary to procure a certificate for the said 1,500 shares from the Snow Storm Mining Company; but that it would be about 70 days before he could procure a new certificate in lieu of the one he had lost. The said Johnson further stated that he would procure from the secretary of the Snow Storm Mining Company a statement that he was the owner of 1,500 shares of the company’s stock, and that a certificate would be issued to him or his order at the end of 70 days. And the said Nicholls agreed to pay the purchase price for the stock upon the receipt of such statement from the secretary of the company; it being agreed that Johnson was to give a bond for the sum of $500 for the delivery of the certificate within 70 days. At that time the said Nicholls had no knowledge or information as to the conditions which would be required, or the terms which would be imposed by the Snow Storm Mining Company or its by-laws as a condition of the issuance of a new certificate of stock in lieu of the lost certificate. That this was the only transaction ever had between the complainant and the intervener, W. A. Nicholls. in reference to 1,500 shares of the capital stock of the Snow Storm Mining Company, and that all the letters covered by the stipulation filed in this case refer to that transaction alone.” It thus clearly appearing that an essential part of the contract ifi question rested in parol only, the contract was void by reason of the statifte cited. Mentz v. Newwitter, 122 N. Y. 491, 25 N. E. 1044, 11 L. R. A. 97, 19 Am. St. Rep. 514; Gault v. Stormont, 51 Mich. 636, 17 N. W. 214; Bogigian v. Booklovers’ Library, 193 Mass. 444, 79 N. E. 769; Porter v. Patterson, 42 Ind. App. 404, 85 N. E. 797; Turner v. Lorillard Co., 100 Ga. 645, 28 S. E. 383, 62 Am. St. Rep. 345; Catterlin v. Bush, 39 Or. 496, 65 Pac. 1065; Waterman v. Meigs, 4 Cush. (Mass.) 497; Bacon v. Eccles, 43 Wis. 227. The judgment is affirmed.