Crimp v. McCormick Const. Co.

• Decision Date: 05 March 1896
• Docket Number: 251.
• Citation: 72 F. 366
• Parties: CRIMP v. McCORMICK CONST. CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

72 F. 366

CRIMP v. McCORMICK CONST. CO. et al.

No. 251.

United States Court of Appeals, Seventh Circuit.

March 5, 1896

John N Jewett and R. W. Baylies, for appellant Eugenia Crimp.

W. J English, for appellant Ingersoll-Sergeant Drill Co.

W. E Church, Tenney, McConnell & Coffeen, Collins, Goodrich Darrow & Vincent, A Burton Stratton, and McGlasson & Beitler, for appellees.

Before WOODS, JENKINS, and SHOWALTER, Circuit Judges.

WOODS Circuit Judge.

This petition in large part covers ground already considered, and to that extent requires no response. In so far as it goes beyond the original briefs and the argument at the hearing, it is characterized by inaccuracy of statement, and by an uncalled-for exhibition of temper. After quoting from our opinion the proposition that Crimp's purchase of stock was conditional, or upon an agreement to resell at the same price, the petition says:

'Now, let us see in what sort of a hole this conclusion puts the court. We take the court at its word. It is no use to say there is not a sentence, a line, a word, or a syllable of this contract that points to a conditional sale of the stock, or of a sale with an agreement to repurchase at the same price or any other price. No matter for this. The court wipes out the old contract and constructs a new one. The proposition is that McCormick sold his stock (126 shares) to Crimp for $25,200, paid to the construction company upon the condition that Crimp should sell it back to McCormick at the same price, McCormick (not the construction company, that received the money) agreeing to repurchase at that price, provided the other parts of the agreement were duly performed; that is, McCormick agreed to repurchase, if he and the construction company, who were together the first party to the contract, did as they agreed to do, and if they did not perform the contract on their part, and, by their failure to perform, destroyed the value of the stock, then McCormick would not be bound to repurchase. McCormick and the construction company did in everything fail to perform, and utterly abandoned the execution of the drainage contract, and therefore no obligation to repurchase the worthless stock or to refund the money to Mr. Crimp rests upon anybody. * * * There are some things which the members of the profession can bear patiently, treat respectfully, and discuss with good temper, even though they may consider them errors. Other things in the same line seem so unnatural, so lacking in perceptions of justice and reason, that they stir up all the bitterness of feeling which can find lodgment in the human breast. Prudence would then dictate a suspension of comment. We yield to the dictates of prudence. If the court adheres to the conclusion announced in the last quotation from the opinion, this petition must be denied. If it does not so adhere (and we fail to see how it can), the petition must be granted, for the conclusion is the result of wrong methods and wrong reasoning, and the whole case must be reconsidered by different methods and upon different theories.'

This is Nestor playing the part of Thersites, though hampered somewhat, it seems, by a prudent regard for the scepter of Ulysses.

But from the manner we turn to the matter of the petition. 'A sale with an agreement to repurchase is usually termed a conditional sale.' 1 Hil.Mortg. 96. And that this agreement was of that character is demonstrated by the first, fourth, eleventh, and twelfth articles of the contract. The proviso that is supposed to have made the proposition worthy only of ridicule, if it relates at all of the undertaking of McCormick to repurchase, applies especially to the agreement of Crimp to resell. Only upon the condition of that proviso did he agree to reassign the stock purchased, together with that pledged, and it is not difficult to perceive his motive for having the contract so framed. His belief, manifestly, was that the company would realize large profits, and, if he had lived to give the business his personal attention, it is possible that his expectation would not have been disappointed; and in that event it was his purpose, upon failure of the other parties to fulfill to the letter their promises and covenants, to have it in his power, if he should deem it to be to his interest, to refuse to reassign, and, by forfeiting the 99 shares which had been pledged, to become the owner of the entire capital stock, and thereby the effectual owner of the entire property of the company. On the other hand, he could hardly have failed to understand, that, if McCormick and the construction, by their failure to perform the contract, should destroy the value of the stock, or that, if for any reason the contemplated enterprise should prove disastrous, the company and McCormick would thereby be made insolvent, and their promise, or the promise of either of them, to repurchase or to redeem the stock, would be worthless. The supposed incongruity between the agreement for a resale and repurchase and the condition upon which its performance was made dependent is therefore more imaginary than real.

The court's view of the twelfth article of the contract is criticized. 'In this part of the opinion,' it is said, 'the court forgets that it was one of the early stipulations of the contract that the profits to be made by the performance of the drainage contract should be divided equally between the parties. * * * If not otherwise provided (and there is no other provision in the contract), the cost of all improvements and additions to the plant or assets of the company must necessarily be taken from that fund which would otherwise go to increase the profits of the enterprise. All such improvements and additions would therefore be invested profits, and, as Crimp's interest in and connection with the construction company was to cease with the completion of the drainage contract, his share in the profits thus invested would be lost to him, unless an interest in those improvements and additions was preserved to him. ' This only emphasizes the significance given by the court to the twelfth article, which, unlike the fourth, is not limited to improvements and additions to the assets of the company derived from the proceeds of the drainage...