220 F. 595 | 3rd Cir. | 1915
Lead Opinion
The plaintiffs were bond brokers. The defendant was a coal operator. In a contract bearing date July 7, 1908, the defendant, in order to procure money needed in its business, made certain engagements for the sale of its bonds to the plaintiffs, and the plaintiffs undertook to resell and dispose of the same. Parts of the contract, and certain decided questions arising therefrom, that have relation to the matters now in controversy, appear in the opinion of this court reversing the judgment entered at the first trial of this •case, and reported in 199 Fed. at page 86, 117 C. C. A. 598.
The contract makes two provisions for the delivery and sale of bonds. The first is an outright sale of $250,000 of bonds, to be delivered and paid for at the rate of $25,000 of bonds on the 1st day of each month following the date of the execution of the contract, with a stipulation that the plaintiffs might anticipate monthly deliveries by calling for and taking at one time any part or the. whole of the bonds purchased,' and thereupon be credited on their undertaking to the extent in which the transaction is anticipated. The second provision contemplates an option for the sale of $1,250,000 of bonds on commission, and contains similar requirements. as to monthly and anticipated deliveries. This provision requires. that the option, to be ef
It is admitted that the parties performed all their undertakings with respect to the bonds purchased outright, but on April 8, 1909, before the tenth and last installment of purchased bonds had been delivered and paid for, the defendant delivered and the plaintiffs accepted for resale to a designated purchaser for a specified purpose, $100,000 of bonds, pursuant to negotiations theretofore had. These bonds were no part of those which were sold and purchased outright.
At the first trial of this case, the court excluded testimony offered by the plaintiffs to show that, by taking this $100,000 of bonds before the completion of the outright purchase, they had accepted or exercised the ■option contained in the contract, and held that the option to take the $1,250,000 option bonds could not be accepted or exercised until after the completion of the delivery and sale of the $250,000 purchased bonds. On, writ of error, this court declined to give to the contract the restricted construction which its literal terms might warrant, and gave it a construction which the court found the parties themselves by their conduct had given it, and held that the plaintiffs obtained an option, which was established by the contract, that they could accept and exercise it before the termination of the period for the delivery of the bonds purchased outright, that the right to anticipate deliveries attached to the option bonds as well as to the purchased bonds, and that if anticipations were made, whether of one class or of the other, the requirement to take $25,000 of bonds monthly -was suspended until such time as would have elapsed had the bonds been taken in regular monthly installments, instead of being taken in advance thereof.
When this court placed this construction upon the option clause of the contract, the question whether the sale of $100,000 of bonds of April 8, 1909, was an acceptance or was made in pursuance of an acceptance of the option by the) plaintiffs, or was a transaction under another contract, became the central question in the controversy. The plaintiffs introduced testimony which had been excluded at the first trial, tending to prove that by the transaction of April 8th they had accepted the option granted them by the contract; and the defendants, on the other hand, introduced testimony tending to show that the transaction was the result of a separate negotiation, having for its object an altogether different matter from what was contemplated by the contract, that the transaction was entered into and completed under an agreement independent of and unrelated to the contract of July 7, 1908, and that therefore it was not an acceptance of the option.
This question was submitted to the jury, and to the manner of its submission the plaintiffs take exception. We are of opinion that the learned trial judge submitted the case upon a very clear statement of the law, and that while certain expressions in the charge, standing alone, might be open to the comment to which the plaintiffs have subjected them, nevertheless, when read in connection with their context, we find them unexceptionable.
“Now, while the contract does include all the bonds that the defendant had subject to its disposal at that time, yet there is no evidence in the case that the defendant did not have other bonds on April 8th, which may have been other than some of these option bonds, and it was not necessary that the same bonds of the same number be always preserved intact to meet the requirements, provided that other bonds of like tenor and amount of the same issue were available.”
It is not entirely clear just what the learned judge meant by this language. Its importance, however, is wholly lost in the consideration of the main issue, which was, not whether the bonds sold on April 8th were a part of the bonds reserved for delivery under the option, if accepted, but whether the bonds then sold were sold under the option or under an entirely different contract.
Default in paying for bonds terminated the contract. By the transaction of April 8, 1909, the bonds purchased by the plaintiffs were sold by them to a creditor of the defendant, and by the creditor were accepted in substitution of the defendant’s obligation of indebtedness. The difference between the amount of the defendant’s indebtedness and the purchase price of the bonds was paid by the purchaser to the plaintiffs, and the same remitted by the plaintiffs to the defendant, less the sum of $500. It was claimed by the plaintiffs that this sum was chargeable to the defendant as its part of the expense in effecting the sale. This was denied by the defendant, and the jury was asked to decide, if they found the option accepted, whether in withholding the payment of this sum the plaintiffs had defaulted in a payment for bonds delivered and purchased, and thereby under its provisions had terminated the contract. On this question there was considerable controversy, which the plaintiffs in error have reviewed before this court, but with which we think we have nothing to do.
After a careful consideration of all matters assigned as error, we are very clearly of the opinion that in the proceedings and judgment below error was not committed.
The judgment below is affirmed.
Rehearing
On Petition for Rehearing.
As the issues of this case developed, it was clear that the plaintiffs based their right to recover upon the acceptance of an option, the, de
“The main question in the case, gentlemen, is whether or not this option was accepted; then if accepted, whether or not the retention of the $500 was a material violation of its terms.”
In approving the submission, this court said:
“The jury was asked to decide, if they found the option accepted, whether in withholding the payment of this sum ($500) the plaintiffs had defaulted in payment for bonds delivered and purchased and thereby under its provisions had terminated the contract.”
The verdict was entirely consistent with a finding by the jury that the option had been accepted and that the contract had been terminated by the plaintiffs’ failure to pay for the bonds delivered thereunder.
The other points presented‘in the petition for a rehearing fail to impress us that this case was improperly submitted or reviewed. The petition, therefore, is dismissed.