Eckstein v. Downing

• Decision Date: 11 March 1887
• Citation: 9 A. 626,64 N.H. 248
• Parties: ECKSTEIN v. DOWNING.
• Court: New Hampshire Supreme Court

9 A. 626

64 N.H. 248

ECKSTEIN

v. DOWNING.¹

Supreme Court of New Hampshire.

March 11, 1887.

Reserved case from Merrimack county.

Bill in equity for specific performance. Facts found by a referee, which appear in the opinion. The general finding was that the prayer of the bill should be denied.

Calvin Page and J. S. H. Frink, for plaintiff.

Chase & Streeter, for defendant.

SMITH, J. The plaintiff agreed to sell to the defendant his yacht, claimed and admitted, for the purpose of the question of jurisdiction, to be worth $6,000, for 60 shares of stock in the Abbot-Downing Company, found to be worth $3,600. This executory contract, entered into August 14, 1884, was rescinded six days afterwards by the defendant's guardian. The plaintiff seeks to enforce, and the defendant resists, specific performance of the contract. Equity does not ordinarily interpose to enforce specific performance of a contract respecting personal property, unless an adequate remedy at law cannot be had. Hill v. Bank, 44 N. H. 567, 568. If in this case the contract had been that the defendant should pay for the yacht in money, the plaintiff could not maintain a bill for specific performance without showing that his remedy by an action at law was inadequate. Noyes v. Marsh, 123 Mass. 286, and cases cited. His measure of damages would be the difference between the value of the property at the time of the breach of the contract and the price fixed by the contract. We do not see that the result is different because payment was stipulated to be made in shares of a corporation. If the value of the stock be regarded as the contract price of the yacht, the question still is, how much are the plaintiff's damages by reason of the defendant's refusal to purchase his yacht?

It is not shown that an award of damages for the breach of the contract will not do exact justice between the parties. The general rule in regard to contracts for the sale of stocks may be stated to be that specific performance will not be decreed, because such contracts are capable of exact compensation in damages. 2 Story, Eq. Jur. § 724. This rule is especially true of contracts for the sale of government stocks or bonds, which are always readily purchasable at their market value. Specific performance of contracts for the sale of stocks in purely private corporations, such as banking, mining, manufacturing and commercial companies, has sometimes been decreed, upon the ground that damages at law do not furnish an adequate remedy for the breach. In Cushman v. Thayer Manuf'g Co., 76 N. Y. 368, stress was put upon the fact that the controlling motive of the purchaser may have been that the real worth of the stock may consist in the prospective rise which he anticipates might follow, or that his desire was to hold the stock as a permanent investment. See, also, White v. Schuyler, 1 Abb. Pr. (N. S.) 300. The criterion whether there is an adequate remedy at law has been said to depend upon the fact of the purchasability in the market of the stock contracted for. 22 Amer. Law Reg. (N. S.) 489, 500. The authorities, however, are conflicting. In Foil's Appeal, 91 Pa. St. 434, (decided in 1879,) Paxson, J., said: "I know of no instance in this state in which a court of equity has decreed specific performance of a sale of stock." In Todd v. Taft, 7 Allen, 371, the point that the plaintiff had an adequate remedy at law was not raised. In Cud v. Butter, 1 P. Wms. 570, a decree for specific performance of a contract to deliver South Sea stock was denied, because the plaintiff might buy of any other person, and be no more out of pocket than if the stock were delivered to him according to the agreement. In Cappur v. Harris, Bunb. 135, the plaintiff was left to his remedy at law. But in Nutbrown v. Thornton, 10 Ves. 161, and in Mason v. Armitage, 13 Ves. 37, specific performance was decreed. In Ross v. Union Pac. R. Co., 1 Woolw. 26, Miller, J., said he saw no sound reason for any distinction between shares of the defendant company and government stocks, and that the rule in regard to them should be the same. In Ashe v. Johnson, 2 Jones, Eq. 149, specific performance was decreed. And see 2 Story, Eq. Jur. (13th Ed.) § 767a, note a.

There are many other cases bearing more or less directly upon the question, which it is unnecessary to speak of in detail. We do not hold that specific performance of a contract for the sale of stock or shares in a manufacturing corporation cannot be decreed under any circumstances; but this case comes within the general rule that equity jurisdiction for enforcing such performance is based on a want of adequate remedy at law. The stock of the Abbot-Downing Company is not commonly offered for sale, and actual sales are very rare. The plaintiff may be unable to purchase an equal number of shares for the same price. But there is no evidence tending to show that he had any wish, or reason for wishing, to become the owner of the Abbot-Downing Company stock rather than any other stock of equal pecuniary value, or that he would not have agreed to take any other stock of equal value in payment of the yacht, or a sum of money equal to that value. 3 Pars. Cont. 370, 371.

The plaintiff contends that the defendant can maintain a bill for specific performance of the contract in regard to the sale of the yacht, and may therefore be compelled to specifically perform the same contract; in other words, he invokes the aid of the rule of mutuality of remedy. It is said in some of the text-books that equity interferes to decree specific performance of a contract where the remedy is mutual. 2 Story, Eq. Jur. § 723; Pom. Spec. Perf. § 165; Adams, Eq. 80; Batten, Spec. Perf. 66. Parsons says: "The meaning of the rule is not very clear, nor is it easy to make a satisfactory classification of the cases in which it has been announced as the ground of decision." 3 Pars. Cont. (6th Ed.) 409, note t. It has been held in England that an infant cannot maintain a suit for specific performance of a contract, because the remedy is not mutual. Flight v. Bolland, 4 Russ. 298. The same reason might not exist in this state. Hall v. Butterfield, 59 N. H. 354; Bartlett v. Bailey, Id. 408. So, where the plaintiff is insolvent, or is a servant employed to perform services of trust, it has been held he cannot maintain such a bill. 3 Pars. Cont. 409, note t. But these are cases where the remedy is not mutual, because the parties do not stand on an equal footing.

Equity will decree performance of a contract for land, because the damages recoverable at law may not be a complete remedy to the purchaser to whom the land may have a peculiar and special value. 2 Story, Eq. Jur. § 717. And the cases are numerous where the vendor has maintained a bill for specific performance of a contract for land, and to compel payment of the purchase money. Ewins v. Gordon, 49 N. H. 444. Equity compels specific performance in favor of the vendor, not on the ground of mutuality of remedy, but because compensation in damages, measured by the difference in price as ascertained by the market value and by the contract, is not regarded as adequate indemnity for the non-fulfillment of the contract. Jones v. Newhall, 115 Mass. 244, 248; Old Colony R. R. v. Evans, 6 Gray, 25. In the English courts, the doctrine of equitable conversion is held to be an additional ground for exercising chancery jurisdiction to compel specific performance of contracts for the sale or purchase of land. Fry, Spec. Perf. § 23.

The rule of mutuality of remedy is of English origin. 1 Spence, Eq. Jur. 220, note f; 3 Pars. Cont. 350, note a. In that country there is no limitation upon the jurisdiction of their chancery courts, except so far as it is fixed and defined by usage. For no other reason, apparently, than the arbitrary one that the remedy should be mutual, the rule became established that either party might maintain a bill for specific performance, if the other could, although the party bringing the bill could have...