Hanson v. Slaven
Before: Garoutte
Synopsis
Option upon Stock—Agreement to Sell—Mutual Agreement upon Acceptance— Dependent Conditions.—A written instrument in the form of a letter, by the terms of which the parties signing it grant to the person addressed the privilege of calling for all or any part of two thousand shares of stock at any time within two years thereafter, at thirty dollars per share, constitutes, under section 1727 of the Civil Code, an agreement of the signers to sell the stock, or any part thereof, at the price stated, to the person addressed, at any time within two years; and upon an acceptance by the person addressed at any time within the two years, becomes, under section 1729 of the Civil Code, an agreement to sell and buy, containing concurrent conditions mutually dependent upon each other.
Id,_Tender of Purchase-money—Failure of Acceptor of Option—Breach of Contract — Default of Seller. — An acceptance of the offer to sell upon the part of the party holding the option to purchase, without an offer of payment of the purchase price, does not place the seller of the stock in default so as to give the acceptor a right of action for a breach of contract, unless the conduct of the seller was such as to excuse the failure of an offer of payment.
Id._Construction of Code — Concurrent Conditions — Offer of Performance__Section 1349 of the Civil Code, which provides that “before any party to an ooligation can require anotner party to per.orm any act under it, he must be able ancl offer to fulfill all conditions concurrent so imposed upon him on the like fulfillment by the other party,” is applicable to obligations arising upon agreements for the sale of personalty, as well as of realty; and under such section, in order that one party may place the other in default upon a contract consisting of mutually dependent obligations, he must not only be able to perform but must offer to perform.
Id. — Waiver of Offer or Tender—Refusal to Perform.—In order to constitute an implied waiver of an offer or tender by refusal of the other party to perform his promise, there must be a distinct and unequivocally absolute refusal to perform the promise, which must be treated and acted upon as such by the party to whom the promise was made.
Id. — Promise of Future Performance__A promise to deliver stock at a future day, when -notified of acceptance of an option under an agreement to sell it, indicates a willingness to deliver it, and cannot be construed into a refusal to do so.
Id.—Excuse of Tender—Waiver by Inability to Perform—Hypothecation of Stock.—The person accepting the option to purchase the stock, under the contract, was not excused from tendering the purchase-money, on the ground that the seller of the stock had placed it out of his power to deliver it, merely because he had hypothecated it and could not then deliver the shares pledged, where it appears that at that time large amounts of the stock were for sale, and any reasonable amount thereof could be purchased for the price of the shares agreed to be sold.
Garoutte, J. This is an appeal from a judgment of non-suit in an action brought to recover the sum of one million, two hundred and seventy thousand dollars as damages for a breach of contract to deliver two thousand shares of stock of the American Contracting and Dredging Company of Hew York City. The contract was executory and in the following words: —
“San Francisco, June 10, 1882.
1 “Charles Hanson, Esq.—Dear Sir: We hereby agree to take and pay for the amount of stock subscribed by you, namely % two thousand shares at thirty dollars per share, in a company now being organized, and to be known as the American Contracting and Dredging Company of. Hew York City.
“ We further grant you the privilege of calling for all or [380]any part of said two thousand shares at any time during the next two years from the date of this letter, at thirty dollars per share. Respectfully yours,
“ H. B. Slaven, *
“M. A. Slaven.”
The latter portion of the writing forms the basis of plaintiff’s cause of action, he claiming to have been damaged by reason of the failure and refusal of respoudeuts to deliver the stock as therein provided.
The motion for a nonsuit was based upon very narrow grounds—grounds that could well have been enlarged. It was made upon the ground that plaintiff had failed to prove the payment or tender of the purchase price of said stock, to wit, sixty thousand dollars mentioned in the option, within the time therein stated, to wit, two years from date, and there was no waiver of such tender or excuse for the making of the same.
The evidence bearing upon the question of nonsuit maybe summarized as follows: Robert F. Pratt, who had charge of certain branches of Slaven’s business, testified: “In January, 1883, Hanson called me into his private office and said: ‘I want my stock, you tell H. B. Slaven I want my stock.’ I said, ‘All right, H. B. Slaven is in town, and I will report to him just what you say’; and I did report the conversation to Slaven, who said: ‘Tell good friend Haiison that he will get his sto Ic; our stock is all hypothecated, tied up. As soon as we are free I will give him his stock.’ In March Hanson again asked me for his stock, but he never tendered me any money at any time. I told Hanson what Slaven said about it.” Plaintiff Hanson testified: “I told Slaven in December, 1882, I wanted the stock, and he said he would get it for me, but he never did. I told him again in February that I wanted the stock, and he said he would get it for me. I never tendered any money to Slaven at any time, never offered to pay him any — either in writing or otherwise — never at any time tendered any money to Pratt or to any person; never offered to pay any person any money for this stock.”
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