164 P. 583 | Or. | 1917
Lead Opinion
delivered the opinion of the court.
The plaintiffs assign as errors: (1) The judgment was erroneous because the facts stated in the answers are not sufficient to constitute a defense; and (2) the court erred in overruling their motion for a directed verdict. The principal ground for this motion was that the contracts, the execution of which is admitted, are void for
There is but little dispute, if any, about the substantial facts of the case. It appears that after signing the contract the plaintiff Max Holtz went to New York to arrange for funds with which to carry out the contract and returned to Portland some time in June, 1911. Negotiations were then taken up between the parties on the subject of security for the subsequent purchase of the remainder of the defendants’ preferred stock yet to be issued, but they were unable to agree on that feature and after protracted discussions, covering some ten days, all further proceedings were abandoned and later on this action was commenced.
The next step in the process of performance of the contract would have been to augment the stock and to deliver the preferred part thereof to the stockholders of the corporation, for it is said in the contract, after speaking of the deposit to be made in escrow, that “then and in that case the parties of the first part” will increase the capital stock and distribute the same among the stockholders. The next in order of time was the purchase of a third of what was owned by the defendants, for we find in the contract “that after such capital stock shall be issued to the present stockholders” the defendants agreed to sell and the plaintiffs to buy that portion of the total number of shares of preferred stock held by the defendants and to pay for the same in cash or New York exchange on or before July 15, 1911. If we should consider the agreement as solely for the purchase of one third of the stock, the defendants were clearly in default in performance of their part of the contract for, after the execution thereof, the first thing to be done by them was the making of the inventory which they utterly failed to perform. The principle is well settled that where something is to be done by the first party before the other is called upon to act it is an independent covenant to be performed before that other can be said to be in default: Couch v. Ingersoll, 2 Pick. 292; Dey v. Dox, 9 Wend. 129 (24 Am. Dec. 137); State v. Winona etc. R. R. Co., 21 Minn. 472; Mill Dam Foundry Co. v.
Passing the question of whether a stipulation for satisfactory security is sufficiently definite to be binding, we note that there is not a hint about the amount of such security. Indeed, the quantity thereof could not be well specified in advance, because at that time the net value of the assets of the corporation to be ascer
“I entertain no doubt that, where work has been done, or articles have been furnished, a recovery may be based upon quantum meruit or quantum valebant; but, where a contract is of an executory character and requires performance over a future period of time, as here, and it is silent as to the price which is to be paid to the plaintiff during its term, I do not think that it possesses binding force. As the parties had omitted to make the price a subject of covenant, in the nature of things, it would have to be the subject of future agreement, or stipulation, and, to use the language of*578 the opinion in Buckmaster v. Consumers’ Ice Co., 5 Daly, 313, if the price each week was to he by fntnre agreement, the contract was not legally binding on either party, as neither could be compelled to agree with the other.”
Other precedents pertinent to this point are Shepard v. Carpenter, 54 Minn. 153 (55 N. W. 906); Sibley v. Felton, 156 Mass. 273 (31 N. E. 10); Foot v. Webb, 59 Barb. (N. Y.) 38; Dayton v. Stone, 111 Mich. 196 (69 N. W. 515); Gaines v. Vandecar, 59 Or. 187 (115 Pac. 721, 1122); Jackson v. Alpha Portland Cement Co., 106 N. Y. Supp. 1052; Somers v. Musolf, 86 Ark. 97 (109 S. W. 1173);. Edmondson v. Fort, 75 N. C. 404. As stated in Clark on Contracts (3 ed.), p. 52:
“An agreement to be finally settled must comprise all the terms which the parties intend to introduce into the agreement. An agreement to enter into an agreement upon terms to be afterwards 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. ’ ’
It is indeed competent for parties to enter into a preliminary agreement looking to the execution of a. consequent one in the future. We have daily examples of that kind in bonds for deeds or in contracts for insurance, the policies of which are yet to be issued. But in all cases the minds of the parties must meet on the terms not only of the present convention, but also as to those of the covenants yet to be executed. If this rule be not observed in the stipulation and a substantial part is left open for further settlement without a canon by which the subsequent negotiations may be controlled there is no aggregatio mentium so essential to every contract. Tested by this standard, under the authorities cited, the admitted document was void for
Reversed and Remanded With Directions.
Rehearing
Denied June 19, 1917.
On Petition for Rehearing.
(164 Pae. 1184.)
Petition for rehearing. Rehearing denied.
Messrs. Reed & Bell, Mr. Charles W. Fulton and Mr. T. M. Dye, for the petition.
Messrs. Beach, Simon & Nelson, contra.
delivered the opinion of the court.
The original opinion awarded the plaintiffs a judgment for $20,000 without interest. The plaintiffs insist that they are entitled to interest on $20,000 from July 15,1911.
The defendants honestly and in good faith denied and litigated the right of plaintiffs to recover; and therefore if the rule announced in Baker County v. Huntington, 48 Or. 593, 603 (87 Pac. 1036, 89 Pac. 1044), is adhered to, it would prevent the allowance of interest. There is, however, a more persuasive reason for disallowing interest.
Rehearing Denied.