44 N.Y. 79 | NY | 1870
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *81 The facts, as they were found by the referee, established nothing more than that there was a negotiation between the parties, having for its object a disposition of the road to the defendant by a perpetual lease, with the right on the part of the defendant, at some time, to become the purchaser on the payment of $1,000,000. The time when the rent should commence, its amount, when payable, the place of payment, and the sum to be paid by the defendant in order to become the owner instead of a perpetual lessee of the road, were well understood; but the time when the defendant should be at liberty to change its status from lessee to owner was purposely left open for future negotiation; as were also the form and covenants of the lease, the rental certificates and other details, which, in the opinion of the plaintiff, would require consideration, were also left open to be thereafter arranged. Whether the mere form of a contract or other matters unessential to the rights of contracting parties will or will not prevent the completeness of a contract where the parties have purposely left such matters open for future arrangement need not now be considered; but if there are essential elements affecting the rights of the parties, which are not implied by, or to be inferred from what the parties have agreed upon, but left open for future consideration and adjustment, the contract as a whole lacks completeness, and no action can arise upon it. It does not require argument to prove that the right of the defendant to elect whether to be a perpetual lessee or purchaser at some future time was an essential right, and that the time when the right might be asserted was also essential; as much so as to a prudent borrower of money, whose interest as well as his comfort might be greatly promoted by the exercise of his right to pay his *84 debt and cease to be a borrower. We cannot in any way so well determine to what things the plaintiff referred as details requiring consideration as by referring to some of the provisions of the contract finally agreed upon. One is, that the defendant is to pay "all taxes, rates, charges and assessments, ordinary and extraordinary, which may be in any way imposed upon the premises, or any part thereof;" another, the right to "exchange the demised lands or buildings for other lands more convenient or necessary for its use;" another, "from time to time, during the continuance of the lease, to sell and dispose such parts of the demised premises as may not be necessary for the use of the demised railroad." There are other equally important details in addition to the right secured to the defendant to extinguish the rent by the payment of $1,000,000 at any time prior to April 1, 1888, by giving six months' notice, and thus end their relation of landlord and tenant. No one of these provisions could by possibility have been implied by what was agreed upon by the correspondence of the parties prior to and on the 27th of March, 1858. As a test, suppose the defendant had been a real person, instead of a corporation, and had died on the 2d day of April following the 27th day of March, 1858, and his heirs had refused to complete the contract, or take possession of the road, or pay rent, and an action had been brought by the plaintiffs to compel a specific performance of what the plaintiffs have alleged to be a contract. The first thing to be done would be to set about the work of ascertaining what, as a whole, the contract was; what the parties meant as to the time of paying the one million of dollars, by saying that the defendant might do so "at a time to be agreed upon." It certainly could not be said that any time was implied as a limit, within which it should, or should not be paid. But without this insurmountable barrier in the way, how could what the parties denominated details, which in their judgment would "require consideration," and which the referee regarded as indefinite, unessential arrangements, be settled? From what data in the alleged contract, so far as the correspondence went *85 toward making one, could the court ascertain what they were, so long as the parties themselves did not know? They had, on account of the consideration which they would require, deferred them for future thought and arrangement? The contract, as subsequently completed, shows that they were not only essential, but such as could not be judicially settled as being implied by the correspondence, or within the contemplation of the parties. It was urged, that because the parties subsequently agreed upon a time within which the defendant might pay the million of dollars and become the owner of the road, and settled the other details of the contract, it was in legal intendment a completion of the contract as of the day when the correspondence terminated, and entitled the plaintiffs to rent from the 1st of April. The answer is, that the defendant, before completing the contract under which it took possession of the road, refused to do it with the understanding that rent should be paid from April 1st; and when it was executed, it was expressly agreed that it should not prejudice either party as to the question now under consideration. It may be that the defendant was remiss in its efforts to fix a time for becoming the owner, instead of remaining the lessee of the road, and in arranging other details of the contract. Be that as it may, lack of diligence on its part in reducing negotiations to an agreement is not now a legitimate subject for consideration. The judgment was erroneous and should be reversed.
Concurrence Opinion
As the defendant did not have possession of the road in April, they can only be made liable for the rent claimed by virtue of some agreement. Here the agreement to pay rent, if any; was part of an agreement for a perpetual lease of the road. There was no independent agreement to pay for the month of April alone. As the lease, therefore, was to be perpetual, it was required to be in writing.
The correspondence prior to July did not make a lease, as the minds of the parties had not met. There were many matters to be settled, and the correspondence shows that the *86 parties did not understand that it made the lease or agreement between them. It shows that they intended that the agreement between them should be formally reduced to writing. The time when the rent was to be extinguished by purchase was to be agreed on, and the forms and covenants of the lease, and the rental certificates and other details were left for future consideration and arrangement. That the matters thus left for future adjustment and agreement were many and important, will be seen by the lease subsequently executed.
In Lyman v. Robinson (14 Allen, 254), Judge FOSTER, says: "A valid contract may doubtless be made by correspondence, but care should always be taken not to construe as an agreement letters which the parties intended only as preliminary negotiation. The question in such cases always is, did they mean to contract by their correspondence, or were they only settling the terms of an agreement into which they proposed to enter after all its particulars were adjusted, which was then to be formally drawn up, and by which alone they designed to be bound?" "The circumstance that the parties do intend a subsequent agreement to be made, is strong evidence to show that they did not intend the previous negotiations to amount to an agreement." (Lord CRANWORTH in Ridgway v. Wharton, 6 H.L. Cas., 268.) In the same case Lord WENSLEYDALE says, p. 304: "An agreement to be finally settled must comprise all the terms which the parties intended to introduce into the agreement. An agreement to enter into an agreement upon terms to be afterward settled between the parties, is a contradiction in terms. It is absurd to say that a man enters into an agreement till the terms of that agreement are settled. Until those terms are settled, he is perfectly at liberty to retire from the bargain."
The principles here laid down fully cover this case, and it follows that the judgment must be reversed and new trial granted, costs to abide the event.
Concurrence Opinion
The correspondence created no agreement. It purported to arrange only certain portions of a contemplated *87 agreement, and conceded that there were other material portions to be arranged thereafter. Neither party could have maintained an action for specific performance, or for damages for non-performance, on an agreement evidenced by the correspondence, for the reason above stated. It was not possible for any court to declare the covenants, referred to by the correspondence, and not then agreed on; and until that was done the agreement was inchoate, not capable of enforcement. There was no agreement concluded till in July following. Either party could refuse to proceed with the negotiation till that time.
The judgment should be reversed and a new trial ordered.
For reversal, GRAY, LEONARD and EARL, CC. For affirmance, LOTT, Ch. C., and HUNT, C.
Judgment reversed and new trial ordered, costs to abide the event.
