133 F.2d 5 | 5th Cir. | 1943
Lead Opinion
The suit was for damages for breach of a contract of sale of a chose in action, a claim of defendants against the United Cigar Stores Company, a corporation, then in 77B reorganization proceedings. Bankr. Act, 11 U.S.C.A. § 207. The claim was that defendants, Hyer and Davis & Son Co., through their attorney and agent Schelker, authorized to act and acting for them, had contracted to sell the -claim to plaintiffs, by accepting an offer plaintiffs had made by telephone and confirming that acceptance by letter.
The material facts are without dispute. Dickinson was the attorney for the sellers with respect to their claim against the United Cigar Stores Co. in reorganization, and he was authorized by them to, and did, retain the firm of which Schelker was a member to represent them in the reorganization proceedings, and the sellers did on February 24, 1934, constitute and appoint Schelker and his partner their attorneys-in-fact for the purpose of those proceedings. On March 30, 1937, one of the appellants, acting for them all, telephoned Schelker, as the attorney for seller, an offer of 75% of the net claim in cash. On the same day Schelker telephoned the offer to Dickinson, at the same time telling him, and Dickinson did not take the stand to deny this testimony, of the details of the suggested plan of reorganization under which sellers and other general creditors would receive for each $1,000 of claim $250 in cash, $250 in 5% bonds maturing in 1952, 5% shares of non par cumulative preferred stock and 150 shares of non par common. Dickinson, telling Schelker that he would submit the matter to their client
• This appeal was brought both from the judgment dismissing Dickinson and from that in favor of the other defendants, but appellants here admit that their appeal from the Dickinson judgment was too late, and they stand upon their appeal as to the other defendants. Taking the position that the undisputed evidence establishes that Schelker was authorized by defendants to make the deal and that so authorized he did make in writing a sufficient memorandum to satisfy the statute of frauds, and further that Dickinson’s letter of April 3rd was both a ratification of Schelker’s act and itself an acceptance of plaintiffs’ offer, they insist that the findings and judgment against them are without support, and the judgment must be reversed.
Taking up first the question of whether Schelker was authorized to, and did by the confirmation of his acceptance, effect a binding contract of sale, we find the answer to it not without difficulty. The difficulty, however, does not inhere in or rise out of any insufficiency in the memorandum, for though it does not fix a place and time of payment, the law will supply these. Neither does it inhere in or arise out of the testimony of Hyer that his acceptance was based on his understanding that no cash was to be paid creditors and was qualified by his statement to this effect to Dickinson, or out of the finding of the court that such misunderstanding on his part prevented the meeting of minds necessary to constitute a contract. For apart from the wholly unsatisfactory nature of that testimony and the circumstances which so mark it as an afterthought as to lead us to the view that the court’s conclusion on it was wholly wrong, such a misunderstanding of fact as to matters of induce
“This will confirm our telephone conversation in respect to the sale to your company by our client of Landlord’s Claim No. 5145, United Cigar Store Company of America, the claim having been allowed in the amount of $68,629.77 by order of Erwin Kurtz, Special Master, entered December 4, 1935.
“The owners of the daim, being the ones who will execute the assignment to you, are R. L. Hyer, May Hyer, and W. M. Davis & Son Oo.
“The purchase price of the claim is to be 75% of the face thereof, in cash, payable on delivery of the assignment.
“I understand that you will forward me the assignment form you will require. Will you be good enough to send an extra copy thereof so that I can have one for my record?”
These were (1) that Schelker’s letter to appellants on March 31, 1937, confirming the sale was not a sufficient memorandum under the statute of frauds; (2) that the minds of the sellers and appellants had not met on the terms of the sale because the appellants knew and the sellers did not at the time of the alleged contract what were the precise terms of the proposed plan of reorganization of the United Cigar Stores Company; (3) that because it did not provide for the form of the assignment and the place of the payment of the price and delivery, the written confirmation does not evidence all of the essential terms of the agreement, and, therefore, it is not a sufficient compliance with the statute of frauds; and (4) that Schelker did not have authority to sign a memorandum binding the sellers and that the sellers did not ratify the letter of confirmation because they did not know of it. He concluded that the evidence was not sufficient to show that Schelker had authority from the sellers and that Dickinson, their agent, was not authorized to appoint a subagent to sign a written memorandum binding under the statute of frauds.
The record shows without contradiction that a meeting was had, the offer was accepted, and Dickinson was instructed to communicate to Schelker sellers’ acceptance of the offer. Hyer testified, “The first I heard of the offer of 75$ on the dollar was Davis came to my house one night and said that Dickinson had had a telephone message from these people or this lawyer in N. Y., and they would give 75$ on the dollar for it, and I said, ‘Wasn’t there no money in it?’, and he said, No, he didn’t think so. T went to Dickinson’s office the next morning, and he read from a little scrap of paper what the telephone message was, and I asked him if there was any money involved, and he said, ‘No’, and then I said, Well, we will sell it for that price if there is no money involved in it.’ I told Mr. Dickinson if there was no money consideration, then we would take the 75$. And Mr. Dickinson thereafter submitted a contract for us to sign. I told Mr. Dickinson I wouldn’t sign that form. I understood we were to get 75$ on the dollar, but I understood at that time that there was no cash to be paid out. What objection did you have to the form?’ ‘The assignment provided if they didn’t get their money out of it, they would hold us responsible and come back on us. Dickinson said he thought he could draw up a form that they would sign and cut out the obligation.’ ” He further testified that his objection to selling the claim if any cash was to be paid to creditors was that he was not selling cash money and he would not sell it at that price if there was to be any cash paid on the claim. To the question, “Just what did you tell Mr. Dickinson when you went up to his office about the 75% offer?” “I told Mr. Dickinson that if there was no money consideration I would take the 75$ on the dollar for the claim. I knew that he had gotten the offer through Schelker and I knew to make a deal he would have to relay acceptance back to the person that had made the offer.”
“Enclosed please find our confirmation of purchase of your claim against the United Cigar Stores Company of America, which you state is allowed in the amount of $68,629.77.
“We are also enclosing in triplicate, Assignments of Claim forms and Resolutions authorizing officers to make such Assignments.
“The Assignments of Claim should be signed by R. L. Hyer, May Hyer, and an officer of the Davis Company, other than the Secretary; and the resolutions should be signed by the Secretary of the Davis Company. Kindly execute two copies of each for us. The third is for your own records.
“Please do not neglect notarizations and imprint of Corporate Seal in proper space.
“Payment of $51,472.33 will be made by us against sight draft attached to properly executed Assignments of Claim presented at our office.
“We respectfully request prompt delivery and thank you for your favor.”
The objection made to the form of assignment was that it imposed a warranty of the ownership of the claim and an obligation to establish its validity. Dickinson advised them to make a simple assignment or quit claim, and he was instructed to draft such an instrument to be submitted by Schelker to appellants.
Dissenting Opinion
(dissenting).
The dealings between the parties to the alleged contract never passed beyond the stage of negotiations for a sale. The minds of the parties never met; they never met personally; never talked to each other over the telephone; and not a line of writing ever passed between them. The seller was in Florida, the buyer in New York. This is as close as they ever got together, either in mind or body.
Messages passed from Roth to Hyer, and a letter was addressed to Hyer in care of Schelker, but they amounted to no more than proposals and counter proposals. The agent that wrote the letter that is alleged to have bound the seller to part with his property for about two-thirds of its value was a New York lawyer, named Schelker, who was employed solely as an associate counsel to' represent the claimant in a bankruptcy proceeding pending in a federal court in New York. He was associated in the case by a Florida lawyer by the name of Dickinson, who also was employed solely
Neither Dickinson nor his associate had any authority to sell or dispose of his client’s claim. The buyer knew this, or is presumed to have known it, but it is said that the New York attorney was held out as an agent with power to sell. There is nothing in the record to prove this, and the finding below was to the contrary. A man cannot lift himself by his own boot straps; and an agent does not acquire authority by holding himself out as having it.
The appellants contend that the buyer ratified Schelker’s letter of March 31, 1937. The court below found, upon undisputed evidence, that the seller never had any knowledge of this letter and did not ratify it. An appellate court cannot rightfully set aside such finding; but, if it should undertake to do so in this case, it would be met with the statute of frauds, because the written memorandum of the contract relied upon by appellants was not complete in itself, since essential matters were left open for further consideration.
It seems to be conceded that this was a Florida contract and that the Florida law governs; but how do we know it was a Florida contract when everything the appellants rely upon to complete the agreement was done in New York? The writing is silent as to the time and place of payment and delivery. The law would imply a reasonable time, but it could not imply anything as to the place when the parties were so widely separated. The buyers demanded delivery in New York, and offered to make payment there if a sight draft were drawn upon them “attached to properly executed assignment of claim duly presented at our [their] office.” R. p. 95. If the contract was made in New York, and called for payment and delivery in New York, it was a New York contract.
The seller might have been led into a sale before finding out about the cash payment but for the fact that, when the time came to complete the contract, the buyer requested an assignment containing all kinds of warranties. This the seller refused to execute, but submitted a new form, which the buyer declined to accept. Pending this disagreement as to the form and substance of the assignment, the seller learned that there was to be a cash payment of $250 in addition to the securities, and refused to go any further with negotiations. This refusal was communicated to the buyer before acceptance of the new form that had been submitted.
I think the judgment appealed from should be affirmed.
