Page images
PDF
EPUB

338

chancery is conversant only with matters of property and the maintenance of civil rights. The court has no jurisdiction in matters of a political nature, nor to interfere with the duties of any department of government, unless under special circumstances and when necessary to the protection of the rights of property, nor in matters merely criminal, or merely immoral, which do not affect any right of property." In re Sawyer, 124 U. S. 200, 8 Sup. Ct. 482, 31 L. Ed. 402; Luther v. Borden, 7 How. (U. S.) 1, 12 L. Ed. 581; Mississippi v. Johnson, 4 Wall. (U. S.) 475, 18 L. Ed. 437; Georgia v. Stanton, 6 Wall. (U. S.) 50, 18 L. Ed. 721. "Neither the Legislature nor the executive department," said Mr. Chief Justice Chase, in Mississippl v. Johnson, "can be restrained in its action by the judicial department though the acts of both, when performed, are, in proper cases, subject to its cognizance." This is the wellrecognized principle as announced by many of the highest tribunals of our states. Fletcher v. Tuttle, 151 Ill. 41, 37 N. E. G83, 25 L. R. A. 143, 42 Am. St. Rep. 220; People v. Canal Board, 55 N. Y. 393; Smith v. Meyers, 109 Ind. 1, 9 N. E. 692, 58 Am. Rep. 375; Hardesty v. Taft, 23 Md. 513, 87 Am. Dec. 584; Sheridan v. Colvin, 78 Ill. 237, in which case the court said: "It is elementary law, that the subject of the jurisdiction of the court of chancery is civil property. The court is conversant only with questions of property and the maintenance of civil rights. Injury to property, whether actual or prospective, is the foundation on which the jurisdiction rests. The court has no jurisdic tion in matters merely criminal, or merely immoral, which do not affect any right of property. Nor do matters of a political character come within the jurisdiction of the court of chancery. Nor has the court of chancery jurisdiction to interfere with the public duties of any department of the government, except under special circumstances and where necessary for the protection of rights of property." To the same effect is High on Injunctions (4th Ed.) §§ 20b, 1326. See, also, People v. Mills, 30 Colo. 263, 70 Pac. 322; State v. Thorson, 9 S. D. 149, 68 N. W. 202, 33 L. R. A. 582. And this court in the case of State ex rel. v. Lord, 28 Or. 498, 43 Pac. 471, 31 L. R. A. 473, has followed the same rule.

The court, therefore, having no jurisdiction over the subject-matter involved, the decree of the lower court should be affirmed; and it is so ordered.

(42 Wash. 620) WESTERN TIMBER CO. v. KALAMA RIVER LUMBER CO.

(Supreme Court of Washington. May 15, 1906.) 1. FRAUDS, STATUTE OF CONTRACTS FOR SALE OF LAND-MEMORANDUM.

Where, pursuant to oral negotiations for the sale of land by one corporation to another. the directors of the proposed vendor adopted

[blocks in formation]

IFICATION.

Where a person assuming to act as agent of a corporation negotiated a contract by which it was to purchase land on certain terms which required the execution' of notes for deferred payments, the action of the officers and stockholders of the corporation in executing the notes and arranging for a cash payment required by the contract was a ratification of the acts of the alleged agent.

4. VENDOR AND PURCHASER-CONTRACT-OFFER AND ACCEPTANCE-OBJECTION TO FORMAL DEFECTS.

Where, pursuant to oral negotiations for the sale of land by one corporation to another, the board of directors of the proposed vendor passed a resolution which was sufficient in form to constitute a written memorandum within the statute of frauds and delivered it to the proposed purchaser, the action of the latter in requesting, on the advice of its attorney, the passage of a further resolution to obviate possible defects in the one first passed, was not a rejection of the contract as completed by the passage of the first resolution.

Appeal from Superior Court, Cowlitz County; W. W. McCredie. Judge.

Action by the Western Timber Company against Kalama River Lumber Company. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

Coovert & Stapleton, for appellant. C. F. Boothe, for respondent.

CROW, J. This action was instituted by the appellant, Western Timber Company, a Washington corporation, plaintiff below, against the respondent. Kalama River Lumber Company, an Oregon corporation, defendant 'below, to enforce the specific performance of a contract to sell and convey a large tract of timber land in Cowlitz county, Wash. Some time in the fall of 1904, one Henry Turrish, the principal stockholder of appellant, who, acting as its manager, controlled its business policy although not an officer an or director, had interview at Duluth, Minn., with Mark Hessey. president of the respondent corporation, relative to the sale of said lands by respondent. Said Turrish then offered to purchase said lands for the appellant corporation for the sum of $50,000, one half cash, the remainder to be payable in one and two years, with 5 per cent. interest, secured by notes indorsed by certain stockholders of the appellant company. In pursuance of this offer, an abstract of title was furnished by respondent and

approved by appellant. On October 21, 1904, the said Mark Hessey, as president of respondent company, called a meeting of its board of directors at Iron River, Wis. At this meeting, only three directors were present. The board consisted of five directors, to wit, Mark Hessey, Winfield E. Tripp, their respective wives, and one M. T. O'Connell. These five directors owned all of the capital stock of the respondent company; the wives of Hessey and Tripp holding stock which belonged to their husbands, in order that they might qualify as directors. The directors present at the meeting of October 21, 1904, were Mark Hessey, Winfield E. Tripp, and M. T. O'Connell. At this meeting the following resolution was unanimously adopted and entered upon the minute book of the corporation: "Resolved, that the timber lands in Township 7 North of Range 4 East, and Township 7 North of Range 3 East, of the Willamette Meridian, now owned by the Kalama River Lumber Company, be sold and conveyed to the Western Timber Company for the sum of $50,000; $25,000 to be paid at the sealing and delivering of a warrantee deed to the Western Timber Company, and $12,500 to be paid with notes due on or before one year from date, with interest at 5 per cent. per annum; and $12,500 to be paid with notes due on or before two years from date, with interest at 5 per cent. per annum. It is further resolved, that the cash and notes received for said timber lands shall be divided between the stockholders of the said Kalama River Lumber Company, according to the stock held by the said stockholders, upon the surrendering to the said company their stock, duly assigned and transferred to said company." After the adoption of said resolution, Mr. Hessey, as president of respondent company, on October 22, 1904, delivered a signed copy thereof to Mr. Turrish, as the representative of the appellant corporation, and also handed to Mr. Turrish the minute book and certain papers of the respondent corporation, which were in turn referred by Mr. Turrish to the attorneys of the appellant corporation, who afterwards prepared a written opinion thereon, calling attention to certain alleged irregularities in the resolution and proceedings. It is not necessary to state these objections in detail; the principal one being based upon the fact that the board of directors had not met within the state of Oregon. Appellant's attorneys suggested that certain steps be taken by respondent to perfect said proceedings and to pass the title. Mr. Turrish handed their written opinion containing said suggestions to Mr. Hessey, who, accompanied by Mr. Trip, immediately called upon said attorneys and procured from them forms and drafts of the resolutions and proceedings which they had recommended. Mr. Hessey and Mr. Tripp, taking these documents, left the attorneys' office with the expressed in

tention of complying with their suggestions and completing the transfer. In the meantime Mr. Turrish provided funds for the cash payment, and had the notes for the unpaid purchase money properly executed and indorsed in accordance with the suggestion of Mr. Hessey. A subsequent meeting of the directors of the respondent corporation was called for October 27, 1904, at which time said directors, instead of taking the steps recommended by the appellant's attorneys, adopted the following resolution: "Resolved, that the resolution adopted at a special meeting of the board of directors of the Kalama River Lumber Co., on the 21st day of October, 1904, agreeing to sell all the timber lands of said company in Cowlitz county, Washington, to the Western Timber Company, be and is hereby rescinded; also the resolution dividing the cash and notes between the stockholders of said Kalama River Lumber Company adopted on the 21st day of October, 1904, be and is hereby rescinded." Subsequent to the time Messrs. Hessey and Tripp had conferred with appellant's attorneys, and prior to the meeting of October 27th, the respondent corporation received by wire from Portland, Or., an offer of $70,000 for the land. Notice was afterwards given to the appellant that the respondent's directors had adopted the rescinding resolution of October 27th, refusing to complete the sale, and thereupon this action was immediately commenced.

On the trial, findings of fact were made, from which it, in substance, appears that the respondent owns the lands in Cowlitz county; that Henry Turrish is the principal stockholder of the appellant, living at Duluth, Minn., and at the solicitation of Mark Hessey, president of respondent corporation, offered to buy said lands for the sum of $50,000, one-half cash, the balance in one and two years, at 5 per cent. interest; that Mark Hessey, president of respondent, called said meeting of the board of directors at Iron River, Wis., on October 21, 1904, at which meeting three directors being present, the resolution first above set forth was unanimously adopted; that said resolution, the minutes of said meeting, and other papers of the respondent corporation were thereafter handed by said Mark Hessey, president of respondent, to said Henry Turrish, and by said Henry Turrish were handed to appellant's attorneys, Washburn, Bailey & Mitchell; that on October 22, 1904, the attorneys made a written report or opinion thereon, containing certain objections to the form of the proceedings; that said written opinion was by Mr. Turrish handed to Mr. Hessey, and thereafter Mr. Hessey and Mr. Tripp, another director of respondent, called upon said attorneys for such stockholders' resolutions, directors' resolutions, proxies, etc., as said attorneys desired to be executed; that said Hessey and Tripp left said at

torneys' office with said resolutions and directions, with the intent and purpose of calling a meeting to adopt the same; and that said parties called a special meeting of the board of directors, which was held in Iron River, Wis., on October 27, 1904, all five directors being present, at which time the second resolution above set forth was adopted. The appellant took no exceptions to these findings. It, however, requested the court to make the following additional findings, which were refused: That upon receiving such resolution of October 21, 1904, Mr. Turrish, on behalf of the appellant, then and there assented to all of its conditions, and proceeded to comply therewith by procuring the notes covering the deferred payments, and that at no time thereafter did appellant alter or modify the same or refuse to carry out the terms thereof; that at the trial appellant offered to pay into court. at such time as the court should direct, said sum of $25,000, for respondent, and to deliver the notes of appellant company for $25,000, payable one-half on or before one year, and one-half on or before two years from October 22, 1904. To the court's refusal to make these findings appellant has excepted. Conclusions of law being made in favor of respondent, judgment was entered thereon. dismissing the action, and this appeal has been taken.

The appellant insists that the trial court erred (1) in its conclusions of law; (2) in its refusal to make the additional findings requested by appellant; (3) in its refusal to make the conclusions of law requested by appellant; and (4) in entering judgment for respondent and refusing to enter judgment for appellant. The respondent corporation was formed for the purpose, among other things, of buying and selling timber lands in the state of Washington. The directors were therefore acting within the scope of their authority when they agreed to sell said lands. It appears from the evidence that all of the capital stock of the respondent corporation was owned by its five directors, and as it was anticipated that, in compliance with the suggestions of appellant's attorneys, all of said directors would be present at the second meeting of October 27, 1904, said attorneys waived any objection to the fact that the meeting of said board of directors would be held in the state of Wisconsin and not in the state of Oregon; their view being that all stockholders present would be estopped from denying the validity of the sale or transfer. The appellant contends that the first resolution of October 21, 1904, authorizing the sale of said real estate, which contains all the essential elements of a valid written memorandum as to terms, and which was signed by the president and secretary of the respondent corporation, constituted a full compliance with the requirement of the statute of frauds as being a mem

orandum in writing signed by the party to be charged, and that as such memorandum had been made and so signed, the respondent's contract to convey can be specifically enforced. We think the resolution was a sufficient written memorandum to constitute a compliance with the requirements of the statute. Browne on Statute of Frauds (5th Ed.) § 346. Texas Ry. Co. v. Gentry (Tex. Sup.) 8 S. W. 98; Argus Co. v. Mayor, 55 N. Y. 495, 14 Am. Rep. 296; Tufts v. Plymouth Gold Mining Co., 14 Allen (Mass.) 407; Central Land Co. v. Johnston (Va.) 28 S. E. 175; Grimes v. Hamilton County, 37 Iowa, 290.

It is contended by the respondent that, even though it be conceded that a contract had been entered into between it and the appellant, and although it had signed a written memorandum thereof, still such contract cannot be specifically enforced in equity, for the reason that it is not mutual, but unilateral, and that the respondent should not be held to a specific performance, for the reason that the appellant, not having signed any written memorandum thereof, could not be held liable in an action for the purchase price. In answer to this suggestion, appellant contends that, by promptly filing a bill in equity and demanding specific performance, it placed itself in a position to have a decree rendered in favor of respondent, forcing it to pay the purchase price. As the adoption of the resolution of October 21, 1904, by respondent, was a sufficient compliance with the requirements of the statute of frauds, we think the contention of the appellant that the contract can be specifically enforced must be sustained. The weight of authority seems to be that the statute of frauds is satisfied if the memorandum be signed by the party defendant in an action for specific performance. The party not signing is not bound unless, as is held by some authorities, he has accepted the same a valid, subsisting contract. Want of mutuality arising from the failure of one party to sign cannot be successfully pleaded as a defense by the other party who did sign, as the act of filing a bill for specific performance binds the former, and makes him liable, and renders the contract mutual. Woodruff v. Woodruff (N. J. Sup.) 16 Atl. 4, 1 L. R. A. 380; South, etc., R. R. Co. v. H. A. & B. R. R. Co., 98 Ala. 400, 13 South. 682, 39 Am. St. Rep. 74; Fry on Specific Performance of Contracts (3d Ed.) §§ 448-450; Waterman on Specific Performance of Contracts, $ 201; Pomeroy on Specific Performance of Contracts (2d Ed.) § 170. 66 * * * Equity will not direct a performance of the terms of the agreement of one party when, at the time of such order, the other party is at liberty to reject the obligations of such agreement; yet, as in a case where an agreement which the statute of frauds requires to be in writing has been signed by one of the parties only, or when the contract, by its

as

See

terms, gives to one party a right to the performance which he does not confer upon the other, upon the filing of a bill for enforcement in equity by the party who was before unbound, he thereby puts himself under the obligation of the contract. The contract then ceases to be unilateral; for by his own act the unbound party makes the contract mutual, and the other party is enabled to enforce it." 2 Warvelle on Vendors, p. 748. In Perry v. Paschal, 103 Ga. 134, 29 S. E. 703, the Supreme Court of Georgia says: "If a contract for the sale of land, required by the statute of frauds to be in writing, is evidenced by a writing signed by one party only, but sufficient to charge the party signing, such party would be bound to perform the contract. While in such a contract there is want of mutuality of obligation, still if the party in whose favor the writing is executed, though not bound because it is not signed by him, sees proper to waive his right to insist upon the invalidity of the contract, and as evidence of such waiver files a proceeding in a court of equity to enforce it, thus affirming in writing his willingness to be bound by the stipulations in the contract, he will by such proceeding, though previously not bound, put himself under the obligation of the contract. The contract then ceases to be unilateral; for by the act of the party who was in no way originally bound by the writing the contract becomes mutual, and the other party is thereby enabled to enforce it against him." In Engler v. Garrett, 59 Atl. 648, the Court of Appeals of Maryland say: "Was the contract mutual? This is not disputed in the pleading or in the evidence. It is said that it is not signed by the plaintiff, but this is not necessary, even under the statute of frauds, which only requires the signature of the party to be charged. "There may be a mutual contract to which both parties have given their assent, though the evidence of such assent may exist in a different form as to the two parties. As to one, it may be verbal, while the other's is expressed by his signature in writing.' Waterman on Specific Perf. § 201. The testimony as to the plaintiff's acceptance of the contract is ample, and, besides this, if there had been doubt on this question, it disappeared when he filed his bill to enforce it." See, also, Browne on Statute of Frauds (5th Ed.) § 366; Brown v. Munger, 42 Minn. 482, 44 N. W. 519; Central Land Co. v. Johnson (Va.) 28 S. E. 175; Cummins v. Beavers (Va.) 48 S. E. 891; Miller v. Cameron, 45 N. J. Eq. 95, 15 Atl. 842, 1 L. R. A. 554.

It is contended by the respondent that the resolution adopted by its directors on October 21, 1904, did not constitute a contract upon its part; that it did not result from a previ ous oral agreement, but that it was merely an offer to convey upon terms named, which offer was never accepted by the appellant, and that, by reason of such nonacceptance, no contract was, in fact, made. On the

other hand, it is contended by appellant that the resolution of October 21, 1904, was the result of a previous oral agreement entered into by Mr. Turrish on behalf of the appellant corporation, and Mr. Hessey on behalf of the respondent corporation, and which was to be submitted by Mr. Hessey to the respondent for its approval; and that the resolution constituted a valid written memorandum of a contract which appellant never refused to perform. The trial court, when requested by the appellant to find that it assented to all the terms of the contract, and proceeded to comply therewith, refused to do so. It failed to find that the contract was either accepted or rejected by appellant. Upon the evidence we think the court should have found that the contract was accepted by the appellant prior to the adoption of the rescinding resolution; that it was at all times ready, willing, and able to completely perform the same, and we now make such finding. It is true, there is a conflict of evidence upon this issue. Witnesses for the appellant testified that the contract was accepted, and that appellant was at all times ready, able, and willing to complete the purchase, while witnesses for the respondent testified to the contrary. We, however, regard the testimony of the witnesses for appellant as the most convincing on this question, it being strongly corroborated by all the surrounding circumstances. Mr. Hessey and Mr. Tripp certainly did not call upon appellant's attorneys for any other purpose than that of procuring copies of any resolutions said attorneys might desire the respondent to adopt in completing the transfer. They accepted said resolutions and left said attorneys with an apparent intent to have them adopted. In fact, the trial court found that such intent existed. From a careful examination of the entire record, we find no intention or desire upon the part of respondent to refuse a completion of the contract, until it received the offer of $70,000 for the land, when, hoping to obtain a higher price than that to be paid by appellant, it first conceived the idea of rescinding its former resolutions of October 21st and refusing to adopt the additional resolutions suggested by appellant's attorneys. It is undisputed that the appellant had the money ready to make the cash payment, and had procured the execution of the notes in exact accordance with the request of respondent.

It is further contended by respondent that, as Mr. Turrish was not an officer or director of the appellant corporation, he was without authority to contract in its behalf. It appears that the acts of Mr. Turrish were ratified by the appellant corporation, in that it executed, and its officers and stockholders indorsed, the promissory notes for the deferred payments of purchase money. It has at all times been ready to make the cash payment, deliver said notes, and perform the contract on its part. The record fails to

show that respondent ever made any demand of performance, nor does it show any refusal by appellant. Respondent has again ratified the acts of Mr. Turrish by its prompt procedure in bringing and prosecuting this action. Mr. Turrish is shown to have been the principal stockholder of the appellant corporation, to have acted as its manager, and to have at all times controlled its business policy. The claim of want of authority upon his part seems to have been an afterthought, conceived by respondent for the purpose of escaping liability in this action. We think it is in no position to make any such contention. Respondent contends that the contract was not accepted by appellant, because it asked the adoption of further resolutions by respondent. The mere fact that appellant, out of an abundance of caution, desired further steps to be taken looking towards the completion of the transfer of the title, does not show any refusal upon its part to accept the offer of respondent. On the contrary, it indicates an opposite intention. Had respondent tendered the appellant an unacknowledged deed for the land, it would be just as reasonable to contend that a request for a corrected deed would constitute a refusal by appellant to accept the contract or complete its performance. Our view is that the appellant's acts clearly indicated a fixed intention to accept and perform the contract, rather than any inclination to refuse acceptance.

From a careful examination of the entire record and the authorities, we conclude (1) that the resolution of October 21, 1904, was a sufficient compliance with the requirements of the statute of frauds; (2) that the appellant at no time refused to accept or perform the contract; (3) that the offer of respondent was accepted by appellant prior to the adoption of the rescinding resolution; and (4) that the contract is one that can be specifically enforced against the respondent. This being true, the trial court erred in dismissing the action. It is ordered that the judgment of the honorable superior court be reversed, and the cause remanded, with instructions to enter a decree for specific performance, in accordance with the prayer of the complaint.

[merged small][merged small][merged small][merged small][ocr errors][merged small]

to take up an outstanding mortgage, and the prospective mortgagee insisted that the mortgage should have priority over the bond and that the holder of the bond should join in the mortgage or surrender the bond. The bond was surrendered to the attorney for the mortgagee, with a statement that the parties had made other arrangements. Thereafter, however, the parties proceeded to make payments and improvements and otherwise act as if the bond was still in full force and effect. Held, that there was no surrender of the bond.

Appeal from Superior Court, Chehalis County; Mason Irwin, Judge.

Action by James F. Conner against James M. Clapp and another. From a judgment for defendants, plaintiff appeals. Reversed and remanded, with directions for decree.

Agnew & Israel, S. M. Heath, and C. W. Hogdon, for appellant. J. B. Bridges and Ben Sheeks, for respondents.

RUDKIN, J. This case was before this court on a former appeal. Conner v. Clapp, 37 Wash. 299, 79 Pac. 929. In addition to the statement of the case contained in the opinion then filed, we deem it sufficient to say that the plaintiff, by his amended complaint, seeks the specific performance of the bond for a deed there referred to. It is admitted by the pleadings, established by the proofs, and was found by the court on the former trial, that the bond for a deed was executed and delivered; that the plaintiff is in possession of the property; that he paid $2,000 of the purchase price on and prior to the delivery of the bond, and that he has made permanent and lasting improvements on the land of the value of $3,500, in addition to the payment of considerable sums as taxes, assessments, and for insurance. After the case was remanded, the pleadings were amended, and the case was submitted to the court on the testimony taken at the former trial. The court stated that it could consistently reach no other conclusion than that announced on the former trial, and dismissed the action. From the judgment of dismissal this appeal is prosecuted.

We will now briefly consider the various objections urged by the respondents against the specific performance of the contract. It is first contended that the bond was a mere option, and that specific performance will not be decreed. Conceding, for the purpose of this case, that the bond was a mere option, the conclusion contended for by the respondents does not necessarily follow. "The giver of the option has often sought, and sometimes successfully, to resist performance by urging that, as the party holding the option was not compellable to exercise it affirmatively, it would be inequitable to require performance by the other. In a majority of the more recent cases, the courts have recognized the plea only to overrule and disallow it. It is now clearly recognized law that specific performance will not be refused on such grounds. 'An optional agreement to convey or renew

« PreviousContinue »