140 N.Y. 70 | NY | 1893
The only question in this case is one of damages. The plaintiff and defendant entered into a written agreement whereby the former agreed to sell and convey, and the latter to purchase and receive, the plaintiff's undivided one-third interest in the partnership of Snyder, Van Brocklen, and Hull, whose assets consisted of real estate held as partnership property for the use of the business, stock on hand, and debts due or to become due; and who were manufacturers of knit goods, occupying their mill for that purpose. The contract was dated February 21st, 1891; the price to be paid was ten thousand dollars; and the formal instruments of sale were to be delivered and the price to be paid on or before the ensuing first of March. The partnership interest of the plaintiff was personal property (Menagh v. Whitwell,
On these facts the plaintiff sued, seeking to recover the deficiency on the re-sale. In answer to inquiries of the defendant, *74 he testified that the interest contracted to be sold was worth $10,000 when the agreement was executed, and when it was to be performed, and such may have been its intrinsic worth, and yet its sale value may have been much less.
At the close of his case the defendant asked the court to rule as matter of law upon the facts, that the measure of damages was the difference between the value of the property at the date of the contract and the date of performance, and that since there was no such difference, the plaintiff was entitled only to nominal damages. The plaintiff objected to any such ruling, insisting that on the facts he was entitled to recover the deficiency on the re-sale. The court ruled that only nominal damages could be recovered, and directed a verdict for six cents, to which the plaintiff excepted. On appeal, the General Term affirmed the judgment.
The ground of that affirmance is certainly erroneous. The rule of damages applied was that which pertains to sales of real property, and which differs in scope and in principle from that applicable to sales of personalty. The opinion describes the contract as one for "the purchase of land," and all the authorities cited relate to sales of real estate. They have no application to the case in hand. The plaintiff had no land to sell and did not contract to sell any. What he did bargain about was his ultimate interest in the partnership assets when converted into money and after payment of all debts. His share of the net surplus then remaining was the only subject of sale, and all that he contracted to sell. His vendee would not and could not become a partner by force of the purchase, would gain no title to the assets as such, and could only force a sale of such assets, including the mill, and the distribution of the proceeds. It was said in Tarbell v. West (
In this court the rule of damages for a breach by the buyer of a contract for the sale of personal property, is perfectly well settled. (Dustan v. McAndrew,
In this case the vendor acted strictly within the authority of our repeated decisions, and must be protected unless we are prepared, after misleading him, to reverse in some degree our own doctrine deliberately declared. What is now said is that we ought not to extend the vendor's right of re-sale to a species of personal property such as is involved in the contract before us. That is an erroneous and misleading statement of the problem. The adjudged rule covers every species of personal property. We have said of it that it is founded in good sense and justice, and that it "is the same in all sales, and in respect to property of every description." (Pollen v. Le Roy, supra.) The rule, therefore, needs no extension since it already covers the present case; and the real suggestion is that we *76 should begin for the first time to make exceptions to it, and here and now take out of its scope and operation the one specific sort of personal property which consists of an undivided interest in a partnership. I feel myself bound to resist strenuously, and to advise earnestly against, any such disintegrating exception, whose logical outcome will inevitably be to confuse the rule with narrow and arbitrary distinctions; to open it to attack in numerous directions; to make its operation fickle and uncertain; to breed needless litigation; and in the end to shatter the rule itself. In deference to the doubts of some of my brethren, I ought to state as briefly as possible a few of the reasons why I think no such exception should be made.
One such reason concerns the safety of the fundamental doctrine upon which the rule is founded, which does not admit of such an exception as is now proposed, and will itself be endangered by the resultant logic of the process. That doctrine is that the vendor of personal property has a lien, or something more than a lien, upon it for the purchase price, while it remains in his possession awaiting delivery, although the right of property has passed to the vendee. (Benjamin on Sales, book V, chap. 3, §§ 782, 783; Schouler on Personal Property, vol. 2, § 547.) The right of the unpaid vendor is deemed sometimes analogous to the pawnee's right of sale, and sometimes to the right of stoppagein transitu. Whatever it be, it is at least a lien upon the property sold for the purchase price so long as it remains undelivered, which lien the vendor may enforce by a sale, and then recover any balance of the contract price unrealized. Now, are we prepared to say that there is such a lien where the property is grain or hops, or a horse, but is not where it is an interest in a partnership? And upon what principle can we admit the lien and the consequent right to enforce it in one case and deny it in the other? If we undertake to make the distinction the inevitable result will be to shake or destroy the fundamental doctrine itself with consequences which we may easily see would be likely to prove disastrous. *77
But, again: those who would draw the line between kinds or classes of property subject to re-sale, and those not so subject to it, must tell us where it is located, and upon what principle it is to be drawn. That, I suspect, would prove at least a difficult, if not an impossible task. The effort has been many times made, but always hitherto has ended in absolute failure. At first the endeavor was to limit the remedy to the case of perishable property, but in MacLean v. Dunn (4 Bing. 722), that effort was resisted. BEST, C.J., said of it: "It is admitted that perishable articles may be re-sold. It is difficult to say what may be considered as perishable articles and what not; but if articles are not perishable, price is, and may alter in a few days or a few hours. In that respect there is no difference between one commodity and another." "And," he added, "we are anxious to confirm a rule consistent with convenience and law. * * * The goods may become worse the longer they are kept; and, at all events, there is the risk of the price becoming lower." And so the rule was not confined merely to perishable property.
Another line of distinction is that between goods and merchandise and things in action; but we are not at liberty to draw that line in this state, even if it were possible to do it upon any logical ground. In Porter v. Wormser (
The latter case shuts off another possible ground of distinction which might be that the rule only applies to such personal *78 property as is the subject of general traffic, and has a market value. In that case, the thing sold was shares of the stock of a construction company which was badly in want of funds, and struggling, by an issue of bonds to its friends, to procure means to live. This court held that the vendor had a double remedy, and might, as one of them, re-sell the stock after tender to the vendee in default, and recover the resultant loss. So that the rule not only covers things in action, but also those which are not the subject of general dealing, and cannot be said to have a market value.
This last case, in principle, comes very near to the one at bar. The interest of a stockholder in the corporate property represented by his stock is nothing more than a pro rata share in the property of the company remaining after the payment of debts and expenses, with the intermediate right to share in the profits. (Burrall v. Bushwick R.R. Co.,
But I draw another inference from it, and that is the wide and dangerous sweep of the doctrine contended for in its application to stock transactions. I suppose nothing to be more common than sales of stocks by vendors for account of a defaulting vendee and a recovery of the balance unrealized. Logically that must stop if the exception here contended for be allowed, for I take it that none of us, however astute, can stand upon so thin a distinction in the doctrine under consideration as that between a corporate and non-corporate interest in capital and assets.
I may be permitted to add that I can see no injustice in the application of this rule to the present case. Beyond any question the defendant could have been sued for the whole purchase price, and if solvent could have been made to pay the entire $10,000. If he deemed the re-sale for $7,500 less than could be or ought to be realized, he had the privilege of protecting *79 himself by procuring a more liberal purchaser or taking the property and controlling its sale for himself. He did neither. He kept silent. He defiantly broke his contract and with some natural triumph stands ready to pay the six cents. That is not enough. He should pay the deficiency resulting from the sale.
The judgment should be reversed and a new trial granted, costs to abide the event.
All concur, except ANDREWS, Ch. J., not voting.
Judgment reversed.