Schneider v. Turner

• Decision Date: 31 October 1889
• Citation: 22 N.E. 497,130 Ill. 28
• Parties: SCHNEIDER et al. v. TURNER.
• Court: Illinois Supreme Court

130 Ill. 28

22 N.E. 497

SCHNEIDER et al.

v.TURNER.

Supreme Court of Illinois.

Oct. 31, 1889.

Appeal from appellate court, first district.

Assumpsit in the superior court of Cook county by George Schneider, Walter L. Peck, and Ferdinand W. Peck against Valuntine C. Turner, to recover damages for the nonperformance of the following contract: ‘Chicago, Nov. 11th, 1885. In consideration of one dollar ($1.00) and other valuable considerations, receipt of which is hereby acknowledged, I hereby agree to sell to George Schneider, Walter L. Peck, and Ferd. W. Peck seventeen hundred and eighty-six (1,786) shares of the capital stock of the North Chicago City Railway at six hundred dollars ($600) per share, if taken on or before the fifteenth day of December, 1885. V. C. TURNER.’ Defendant demurred on the ground that the contract was in violation of Rev. St. Ill. c. 38, § 130, forbidding option contracts. The court sustained the demurrer, and the appellate court affirmed the judgment. Plaintiffs appeal.

Smith & Pence, (Cooper & Gurley, of counsel,) for appellants.

Goudy, Green & Goudy, for appellee.

WILKIN, J.

The sufficiency of the fifth and seventh counts depends entirely upon the construction to be placed upon the instrument therein declared on; the eighth, whether or not that instrument can be aided by averment and parol proof. The question upon which doubt is expressed in the opinion of the appellate court, viz., whether or not the paper set out in the several counts should be regarded as an agreement or a mere proposition for a sale, is eliminated from the case as here presented; counsel for appellants, admitting the correctness of the decision below in that regard, contending, however, that, although a contract between the parties of the date it bears, it is not an option contract, but a contract of purchase and sale of the shares of stock specified. It is said to be ‘an executory contract of sale, the time of its performance being of the essence thereof, the non-performance of which would authorize the vendor either to rescind the contract, or, standing upon it, sue for damages for the breach.’ In support of this proposition many authorities are cited, and among them Andrews v. Pontue, 24 Wend. 289;Ives v. Hazard, 4 R. I. 27;Spalding v. Hallenbeck, 30 Barb. 299;Barton v. McLean, 5 Hill, 256; and Wain v. Warlters, 5 East, 10,-all of which are referred to in the opinion of the appellate court as holding the instrument in question, though executed by only one of the parties, but delivered to, and excepted by, the other, a contract, and not a mere offer. A careful examination of these and other like cases cited will show that, while they sustain the position in support of which they were cited by the appellate court, they throw no light whatever upon the question as to whether that contract should be construed to be a contract for an option contract or one for sale and purchase.

Looking at the instrument itself, it seems impossible to give it the construction contended for by appellants without violating plain and well-settled rules of law applicable to all instruments in writing. It must first be determined that there is some uncertainty as to the meaning of the contract, otherwise there is no room for construction; but, if construction can be resorted to, then all parts of the instrument must be construed in such a way as to give force and validity to all of them, and to all of the language used where that is possible; also to give to the words their common and generally accepted meaning. Here, however, the construction contended for ignoresthe first clause of the instrument entirely, and gives to the word ‘if,’ in the last sentence, an entirely different meaning from that ordinarily attached to it; thus making the contract read, in effect: ‘I hereby agree to sell to George Schneider, Walter L. Peck, and Ferdinand W. Peck 1,786 shares of the capital stock of the North Chicago City Ry. stock at $600 per share, to be taken (or they to take the same) on or before the 15th of December, 1885.’ So read it would undoubtedly, under the authorities cited, be an absolute contract of sale of the shares of stock; but, reading the entire instrument, the question arises, if appellee in fact meant by the language, ‘I hereby agree to sell,’ that he then and there did sell the shares of stock, and if appellants, by accepting the instrument, thereby meant that they had then and there bought the same, where was the necessity of saying, ‘in consideration of one dollar,’ etc., ‘I hereby agree to sell?’ Why not have said, ‘I have this day sold;’ or, as was said in the Hazard Case, supra, ‘I agree to sell,’ etc., ‘at * * * $15,000.00?’ And if the parties did intend by the last clause to make time of the essence of the contract, why say ‘if taken’ instead of using words showing a mutual agreement to take within a time limited? The plain, unambiguous meaning of the contract, treating it as such, is that appellants paid appellee a valuable consideration for the refusal or privilege to buy 1,786 shares of stock of the North Chicago City Railway Company, at $600 per share, at any time on or before the 15th of December, 1885,-a contract heretofore of frequent occurrence in commercial transactions, perfectly legal and enforceable at common law. In the absence of section 130, (Rev. St. Ill. c. 38, § 130,) no one, it seems to us, would hesitate to pronounce this a contract to give to appellants the option to buy railroad stock at a future time.

The argument in support of the eighth amended count admits that such is its effect on its face, but it is insisted it is competent to vary its terms by allegation and proof that no consideration was in fact paid by appellants, or received by appellee, for the agreement to sell, and thus show the transaction a mere offer on the part of appellee, without consideration, which became an agreement only upon the acceptance and offer to perform on the part of appellants. The general rule excluding parol evidence offered for the purpose of contradicting or varying the terms of a written instrument is not questioned. The validity of this count is based exclusively on the provisions of section 9, c. 98, Rev. St., entitled ‘Negotiable Instruments.’ That section provides that a defendant may plead want or failure of consideration to a suit on a note or other contract, for the purpose of defeating a recovery in whole or in part, where the same was given without consideration, or where the consideration has failed. No authority is found in this section for permitting a plaintiff to prove a want of consideration for the purpose of varying the terms of his contract. This proposition is too clear for argument. The parties must be held bound by the contract as they wrote it. 1 Greenl. Ev. § 275. The right to vary or explain the consideration expressed in a written contract, or to prove that it was never paid, does not authorize the introduction of such testimony to affect the terms or validity of the contract. O'Brien v. Palmer, 49 Ill. 72;Morris v. Tillson, 81 Ill. 607. Still it is most earnestly insisted that, notwithstanding the instrument sued on is, on its face, an option contract, and although it cannot be changed into a mere offer by parol proof, yet it is not violative of section 130 by proper construction of that section. To maintain this position it is insisted that, by the prohibition of the statute, the legislature only intended to make unlawful such option contracts as contemplate a settlement by differences; that to come within the inhibition of section 130 the contract must be a gambling contract; that the option here meant is the option or right to elect whether to accept or deliver the stock or other commodity, or pay...