Northern Central Railway Co. v. Walworth, 193 Pa. 207

Northern Central Railway Co. v. Walworth

193 Pa. 207 | Pa. | 1899

Opinion by

Mb. Justice Green,

By the very explicit and plainly expressed terms of the writ*211ten contract in question in this case, the defendant Warren F. Walworth agreed to sell and deliver to the plaintiff, on or before the 25th day of June, 1898, certificates for 10,000 shares of the capital stock of the York Southern Railroad Company, and $142,000 of the five per cent bonds of the same company due in 1944. In consideration of the said sale and transfer the plaintiff agreed to pay to the vendor the sum of $160,000. There is not the least element of doubt or uncertainty as to what this contract is and means. It means just what it says, and what it says is so plainly and clearly expressed that a description of its meaning would be merely a repetition of its words. The vendor further agreed that the railroad company should be free of debt, except its mortgage debt of $399,950, and its car trust notes, not exceeding $4,000, and he agreed also that he would pay all the interest due on the mortgage debt and car trust notes, and the principal and interest of all the floating debt of the company up to the time of delivery, June 25,1898. To make sure of the payment of these items it was further agreed that the vendee, the plaintiff, might retain out of the purchase money so much as was sufficient to make tbe payment. The foregoing are the whole of the terms of the sale, and it is scarcely necessary to repeat that they are absolutely free of any question as to their meaning. The vendor agreed that he would use his best endeavors to secure for the vendee the remaining 2,000 shares of the stock of the railroad company, and the remaining $8,000 of its mortgage bonds, at the lowest price practicable, and that he would submit the accounts, books and records of the company to the examination of a representative of the vendee, but these stipulations were merely ancillary and constituted no part of the actual contract of sale. The bill alleges and the demurrer necessarily admits that the vendee, at the request of the vendor, extended the time of performance from the 25th day of June to the 31st day of July, 1898. And the bill further avers, and the demurrer does not deny and necessarily admits, that the vendee was ready and willing to comply with its part of the contract in all respects, both on the 25th day of June and on the 31st day of July, but that the vendor failed and neglected to comply with his part of the contract on either of those dates. The bill further alleges, and the demurrer does not deny and necessarily admits, that on the 27th *212day of August, 1898, the vendor absolutely refused to perform his part of the said contract of sale, and declared the same terminated. The bill further avers that after the execution of the contract of sale the defendant, Walworth, in fraud of plaintiff’s rights, sold and delivered the said stock and bonds to other of the defendants, naming them, and that these other defendants, when they bought and received the said stock and bonds, had knowledge and were advised of the previous contract made by said Walworth with the plaintiff, and colluded with Walworth for the delivery of the stock and bonds to themselves in fraud of the plaintiff’s rights. Some amendments to the bill were allowed, but as they are not material to the controversy in its present state they are not now considered.

The demurrer filed by the defendants to the bill contains a number of averments, many of which are of so trivial a character as not to require consideration. The learned court below refused a special injunction and subsequently sustained the demurrer and dismissed the bill. The reasons for this action are expressed in the opinion filed, and they are chiefly to the effect that the contract is too uncertain and indefinite in its terms; that the contract lacks mutuality, and is “ loaded down with conditions contradictory and incapable of performance; ” that a bill for specific performance is an appeal to the conscience of a chancellor, who will not order its performance if it is hard or unconscionable; that the bill does not show irreparable injury; that the securities have been transferred to the parties, and that specific performance will not be decreed in Pennsylvania of contracts for the sale of stocks and chattels. We find ourselves quite unable to agree with any of these conclusions. We have already considered the averment of uncertainty and indefiniteness in the terms of the contract. We have endeavored to show that there is nothing indefinite or uncertain about it, but that its terms are plainly and clearly expressed, and we cannot conceive of any reason why they cannot be specifically performed. The subsequent sale and delivery of the securities to other parties in disregard of the earlier contract with the plaintiff is not of the least consequence as a defense, most especially when the bill avers that those parties had knowledge of the prior contract with the plaintiff, and they are made parties to the bill and are asked to be enjoined. We do not discover any *213want of mutuality in the contract. If the vendor had performed his part of the contract and the vendee had refused to take the securities upon tender of them being made, we know of no reason why specific performance could not be decreed against the plaintiff. We are not referred to any authority holding the contrary of such a doctrine. Certainly an action for damages would lie, in which the whole contract value of the securities could be recovered, and that is a sufficient reply to the allegation of “want of mutuality.” In Jennings v. McComb, 112 Pa. 518, we said: “ The principle that contracts must be mutual, must bind both parties or neither, does not mean that in every case each party must have the same remedy for a breach by the other. Covenants may lie against one, where only assumpsit can be maintained against the other: Grove v. Hodges, 55 Pa. 504.” In the note on page 940 of 22 Am. & Eng. Ency. of Law (1st ed.), it is said, “ The mutuality required is that which is necessary for creating a contract enforceable on both sides in some manner, but not necessarily enforceable on both sides by specific performance.” The contention that the contract is uncertain because the amount of the interest on the mortgage bonds and the car trust notes is not stated, and the amount of the floating debt of the company is not given, and therefore the contract does not disclose how much money is to be paid for the securities, is of no force. The amount to be paid is fixed and definite, $160,000. There is no amount to be deducted, unless the vendor defaults in his agreement to pay the interest on the bonds and note and the principal and interest of the floating debt, and such default is not to be presupposed. But if it occurs the vendor can show what the amounts to be deducted are, and thus these amounts can be rendered certain, and that is certain which can be made certain. The only other contention of any importance is the one that bills in equity will not lie in Pennsylvania for the specific performance of contracts for the sale of chattels. While this is true as a general rule, it is not true where the articles sold are of such a nature that they cannot be purchased in the market. This contract is for the sale and purchase of almost the whole of the bonds and stock of this particular company.. These securities cannot be had nor obtained except under and by force of this particular *214contract. They cannot be bought in the general market, because they do not exist. Outside of this contract there are but 2,000 shares of stock and $8,000 of bonds; hence it is not possible for the plaintiff to obtain the bonds and stocks which the defendant Walworth agreed to sell him, except by the specific performance of this contract. This consideration constitutes a well-established exception to the general rule which denies specific performance to executory contracts for the sale of chattels. This whole subject was discussed in the opinion of this Court delivered by Claes, J., in the case of Goodwin Co.’s Appeal, 117 Pa. 514, and the exception to the rule as above stated was clearly recognized and enforced. On page 584 it is said in the opinion: “ The same general principles govern in contracts for the sale of stocks of this character as in the sale of other personal property; if the breach can be fully compensated equity will not interfere; but when, notwithstanding the payment of the money value of the stock, the plaintiff will still lose a substantial benefit, and thereby remain uncompensated, specific performance may be decreed: Waterman on Spec. Perf. sec. 19. . . . The doctrine has in some cases been carried to this extent that if a contract to convey stock is clear and definite, and the uncertain value of the stock renders it difficult to do justice by an award of damages, specific performance will be decreed.”

The case of Foil’s Appeal, 91 Pa. 434, cited for the appellee, has no application. The decision was founded upon the special and highly exceptional facts stated in the opinion, which dó not appear in this case. Moreover there were but fifteen shares involved in that controversy, and there were several hundred more shares in the hands of other persons which were susceptible of purchase. It nowhere appears on the record of this case that there is anything contrary to public policy in specifically executing this contract. The sufficiency of that reason for the decision of Foil’s Appeal may well be questioned. To the writer it is not at all sufficient, but the other reason, that there was other stock open to purchase, was of controlling force. In the present case, however, the contention founded upon a supposed public policy adverse to the acquisition of control by any one interest is altogether inapplicable. The public policy of a state is certainly indicated by its legislation. , *215In Carpenter’s Estate, 170 Pa. 208, we said: “How can there be a public policy leading to one conclusion when there is a positive statute directing a precisely opposite conclusion. . . . There can be no public policy which contravenes the positive language of a statute.” In Van Steuben v. Central R. R. Co., 178 Pa. 367, we said: “The public policy of a state is to be. deduced from the general course of legislation and the settled adjudications of its highest courts.”

By our Acts of April 23,1861, P. L. 410, and its supplements of March 17, 1869, P. L. 11, February 17, 1870, P. L. 31, and May 16, 1861, P. L. 702, railroad companies were fully authorized to lease, make traffic contracts with or purchase the stock, bonds, etc., of other railroad companies, and these laws and the numerous decisions under them most clearly favor the existence of a public policy sanctioning all transactions of that character. In the case of R. R. Co. v. R. R. Co., 171 Pa. 284, it was said by our Brother Dean in the opinion: “ The right of one road to lease, make traffic contracts with, or consolidate with connecting roads not parallel or competing lias not for thirty-four years been doubted that we Imow of; the act of April 23,1861, expressly confers such right, and the constitution does not affect it except to prohibit the consolidation and leasing of parallel and competing lines. The rights of connecting roads under that act have been recognized many times since the adoption of the constitution of 1874; and that contracts for through business, both freight and passenger, between connecting railroads and shippers, are not only not ultra vires, but on the contrary, have for their basis sound business principles; and special contracts may be made with a special class of shippers to secure business. ... It is not seldom those who have reaped benefits from a contract such as this seek to escape its obligations by taking refuge in that assumed turpitude which, on grounds of public policy, avoids the contract; but here, and it is a gratification to us to say it, the parties to this contract violated no law, restrained not others from engaging in business, did nothing of evil example or detrimental to public morals ; therefore there is no public policy which, in the absence of express legislative enactment, makes void this contract.”

The Act of April 23,1861, P. L. 410, contains the following provision: “ That it shall and may be lawful for any railroad *216company created by and existing under the laws of this commonwealth, from time to time, to purchase and hold the stock and bonds, or either, of any other railroad company or companies chartered by or of which the road or roads is or are authorized to extend into this commonwealth.”

In the face of such legislation it is idle to talk of a purchase of the bonds and stocks of one railroad company by another being contrary to the policy of the law.

It is almost unnecessary to add that there is nothing on this record showing or tending to show that the York Southern Railroad is a parallel or competing line with the Northern Central Railway.

With reference to the contention that there is an adequate remedy at law, and that the bill does not show an irreparable injury, it is enough to say that under the case disclosed by the bill the plaintiff has no remedy at law, and that the plaintiff’s injury is necessarily irreparable in every equitable sense, if the plaintiff does not acquire the bonds and stock which they purchased and aver their readiness and willingness to pay for.

It was these bonds and stock which they bought, and which they had a perfect legal right to buy. If they cannot have them their injury is necessarily irreparable, because they lose the very subject-matter of their contract. A money consider- . ation, even if it could be obtained, is no substitute. The assignments of error are all sustained.

The decree of the court below is reversed and the demurrer ■ is overruled. The defendant is ordered to answer the bill under penalty of a decree pro confesso, and the record is remitted for further proceedings, the costs to be paid by the defendants.