Corwin v. Grays Harbor Washingtonian, Inc.

• Decision Date: 22 April 1929
• Docket Number: 21509.
• Citation: 276 P. 902,151 Wash. 585
• Court: Washington Supreme Court
• Parties: CORWIN v. GRAYS HARBOR WASHINGTONIAN, Inc.

276 P. 902

151 Wash. 585

CORWIN v. GRAYS HARBOR WASHINGTONIAN, Inc.

No. 21509.

Supreme Court of Washington

April 22, 1929

Department 1.

Appeal from Superior Court, Grays Harbor County; Wm. E. Campbell Judge.

Suit by Earl Corwin against the Grays Harbor Washingtonian, Inc. Judgment of dismissal, and plaintiff appeals. Reversed and remanded, with directions.

F. L. Morgan, of Hoquiam, for appellant.

James P. H. Callahan, of Hoquiam, for respondent.

BEALS J.

Plaintiff being the owner of all of the capital stock of K. X. R. O Inc., a corporation, signed a writing in the following form:

'100.00 August 13, 1927.

'Received from Grays Harbor Washingtonian, Inc., $100.00 as earnest money on purchase of entire capital stock of K. X R. O., Inc., a Washington corporation. The entire price is $1,625.00, balance thereof to be paid in cash upon closing of deal. I agree to pay all debts and liabilities of said corporation to date of closing deal, except claims of Jones and Jones not exceeding $1,930.94, for building and furnishing studio in Aberdeen, but I agree to pay rent to date of closing this deal, this to be closed in the office of J. P. H. Callahan, Hoquiam, Wn., on Thursday, Aug. 25, 1927, 9:00 a. m. This purchase includes all corporate records, stock book, files and correspondence and everything belonging to corporation, especially including radio licenses.

'Earl Corwin, for K. X. R. O., Inc.'

Upon which defendant indorsed:

'The above agreed to and we will pay Earl Corwin $20.00 to cover his expenses of trip to Hoquiam to close deal.

'Grays Harbor Washingtonian, Inc.,

'By Albert Johnson, President.'

The time for closing the deal having been extended at defendant's request, defendant, September 9, 1927, notified the plaintiff that it declined to complete the purchase. Shortly thereafter plaintiff made formal tender to defendant of the corporate stock, together with the corporate books and records, which tender was not accepted. Plaintiff thereupon brought suit, alleging the facts above set forth, and that by reason thereof defendant was indebted to plaintiff in the sum of $1,545, for which amount, together with his costs, plaintiff prayed for judgment against defendant. To this complaint defendant interposed a general demurrer, and, upon the same being overruled, filed its answer, denying any indebtedness to plaintiff, and setting forth two affirmative defenses, to which plaintiff replied.

Upon the action being called for trial, there was some discussion between the court and counsel for the respective parties as to whether or not the complaint stated a cause of action; the court finally stating: 'My impression at this time is that this complaint is demurrable, but I will hear the evidence and permit the pleadings to be amended in accordance with the testimony. It is for the purpose of making a complete record in this case.' Plaintiff having rested his case, defendant moved for a nonsuit upon the ground that the complaint failed to state a cause of action, and that plaintiff's testimony did not warrant any recovery in his favor. The court granted this motion and entered judgment dismissing the action, from which plaintiff appeals.

Appellant contends that his complaint alleged and his evidence proved a sale of the corporate stock referred to in the memorandum above quoted, and that under the circumstances as shown he is entitled to maintain an action against respondent for the balance of the purchase price of the stock, that being his measure of recovery upon breach of the agreement by respondent. Respondent contends that appellant's remedy, if any, is an action for damages for breach of contract, and not an action for the full balance of the purchase price. Appellant introduced no testimony on the question of damages, relying upon his contention that he was entitled to recover judgment against respondent for the balance of the purchase price.

Appellant contends that the agreement between the parties evidences a completed sale of the stock at the time of the payment of the earnest money. We are unable to agree with this contention. Appellant agreed to pay all the debts and liabilities of the corporation, with one stated exception, and to pay rent to the date of closing the deal. The agreement between the parties was, on its face, an executory contract, and not an absolute sale, and title to the stock was not to pass to respondent until payment of the balance of the purchase price. There was no delivery of the stock to respondent, and under the circumstances the general rule applies that, in cases where the transaction contemplates or provides for a future delivery of the subject-matter thereof, it will ordinarily be deemed an executory contract of sale. 23 R. C. L. tit. 'Sales,' § 170-1; Pacific Coast Elevator Co. v. Bravinder, 14 Wash. 315, 44 P. 544; Adams v. Ames, 19 Wash. 425, 53 P. 546; Robinson v. Thoma, 30 Wash. 129, 70 P. 240.

Appellant relies upon paragraphs (2) and (3) of section 63, c. 142, Laws Extraordinary Session 1925 (page 383), which read as follows:

'(2) Where, under a contract to sell or a sale, the price is payable on a day certain, irrespective of delivery or of transfer of title, and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property in the goods has not passed, and the goods have not been appropriated to the contract. But it shall be a defense to such an action that the seller at any time before judgment in such action has manifested an inability to perform the contract or the sale on his part or an intention not to perform it.

'(3) Although the property in the goods has not passed, if they can not readily be resold for a reasonable price, and if the provisions of section 64(4) are not applicable, the seller may offer to deliver the goods to the buyer, and, if the buyer refuses to receive them, may notify the buyer that the goods are thereafter held by the seller as bailee for the buyer. Thereafter the seller may treat the goods as the buyer's and may maintain an action for the price.'

Paragraph (4) of section 64 of the 'Uniform Sales Act,' referred to in paragraph (3), § 63, supra, reads as follows:

'(4) If while labor or expense of...