63 N.Y.S. 665 | N.Y. App. Div. | 1900
The plaintiff, as the assignor of Homer M. Daggett and others, made a contract on the 14th of December, 1893, with the defendant, which he alleges the defendant has refused to perform, and this action is brought for damages for such refusal. Daggett and his associates were interested in the Interstate Street-Railway Company, which owned and controlled the street railways in the neighborhood of the city of Pawtucket, R. I. In May, 1893, Daggett and his associates bad entered into a contract with the defendant looking to the purchase by the defendant of a controlling interest in the shares of the Interstate Railway Company. By means of such ownership the defendant would secure full control, not only of the Interstate
The contract relied upon by the plaintiff was put in evidence. It did not call upon the defendant absolutely to furnish the cash required to bid off the property at the foreclosure sale, and so it might be sufficient to say that for that reason the cause of action was not proved by the plaintiff. But upon the trial he does not seem to have been strictly held to that allegation. He was permitted to endeavor to establish that there was a refusal on the part of the defendant
It is urged by the plaintiff that it is reasonably to be inferred from this resolution that the defendant acted in bad faith, because, as he assumes, the letter is to be construed as an ultimatum on the part of the defendant, fixing the greatest price it would pay at the foreclosure, and that the price thus fixed was absurdly below the actual value of the property, and therefore he insists that there can be no escape from the conclusion that this act of the defendant was taken in bad faith. Just when that letter of 18th of September was received by Daggett and his associates does not appear, but an answer dated September 28,1894, was sent, in which the plaintiff’s assignors express themselves as ready and willing to do anything in their power to effectuate the agreement; and they ask for information regarding the efforts made for the reorganization, and the then present status. It is stated in that letter that “the agreement requires you, on the foreclosure sale, to cause a transfer to some new corporation, to be organized for that purpose, and, with that end in view, to bid in the property at the lowest amount which will secure at such sale for reorganization purposes.” And that the statement of the defendant that it will bid at the foreclosure sale only up to $100,000 for the Interstate Line, and $50,000 for the Attleboro Line, “is not a compliance with your oral agreements and the said agreement of December 18th, 1893, if those figures fail to obtain the property.” The attitude taken by the plaintiff’s assignors in this correspondence is that they were not satisfied with the price fixed by the defendant as the amount to be bid. Their letter was replied to on the 15th of Outober by the defendant. It states therein that it had mentioned the amount which it proposed to bid, and which was satisfactory to it, and that it stood ready to carry out the agreement to bid at the foreclosure sale such price as might be fixed by the parties to the con
“As the agreement of December 14, 1893, was executed in view of the cancellation of an agreement in which you had estimated the value of the property in question at largely over half a million dollars, it would seem clear to us that in carrying out the reorganization scheme, even if a limit could properly he placed by you as to the amount of your bid, you could not with propriety claim, for the purposes of reorganization, that the property was worth less than that amount, — in other words, while you are under obligation to get the property as cheaply as possible, you are certainly not in a position to claim that you can stop at any less amount than half a million; and, if our contention is correct, you would be obliged to bid any sum necessary to buy the property for reorganization purposes. This could not, in any event, be a hardship to you, as the Interstate property is admittedly worth much more to you than to any •one else, because of the connections and facilities which you have. We have further to advise you that the essential part of the agreement being that you will buy at the sale for the lowest amount practicable, and the details being only matters left to mutual agreement as we understand it, we are willing, in any and every reasonable particular, to agree with you as to the details of the reorganization scheme, — viz. as to the amount of bonds, preferred stock, and common stock to be issued, — asking from you simply information from time to time as to what you are doing.”
The only inference to be deduced from the extracts last quoted is, we think, that the plaintiff’s assignors had fixed the price which, in their judgment, should be paid by the defendant at the foreclosure sale, and refused to enter into negotiations concerning it, although they were willing to negotiate as to other matters of detail mentioned by them. On December 12th the defendant wrote the plaintiff’s assignors a letter which opens by saying that the communication of November 9th was received by the defendant in the latter part of the month of November, and it emphatically refuses to accede to the construction which the plaintiff’s assignors placed upon the contract. In our judgment, the defendant was justified in that refusal. The defendant then proceeds to state reasons why no greater amount should be paid for the property than that fixed by it in the resolution of September 3d, and ends with a request to the plaintiff’s assignors to agree to that amount as the amount to be paid. In our judgment, this letter of December 12th must be deemed to be, not a final refusal to agree upon the price, and as a final determination that no greater price would be paid than that fixed in the resolution, but only as a reiteration of its opinion that the amount mentioned in the resolution would be a proper amount, and as an invitation to the plaintiff’s assignors to further negotiate on the subject. It cannot be said, therefore, that the defendant had refused to negotiate, or had arbitrarily and finally fixed an upset price above which it would refuse to bid.
The sale of the Attleboro & Wrentham property took place on the 14th of December, 1894. The defendant bid $50,000, as it stated it would, but the property was struck off to Perry for $51,000. The sale of the Interstate road did not take place until later. Before that road was put up for sale, and on the 11th of February, 1895, Daggett and his associates wrote another letter to the defendant, in which they
The judgment must, he affirmed, with costs. All concur.