Haworth v. Hubbard

• Decision Date: 02 December 1942
• Docket Number: 27804.
• Citation: 44 N.E.2d 967,220 Ind. 611
• Parties: HAWORTH v. HUBBARD et al.
• Court: Indiana Supreme Court

44 N.E.2d 967

220 Ind. 611

HAWORTH v. HUBBARD et al.

No. 27804.

Supreme Court of Indiana

December 2, 1942

Appeal from Circuit Court, Monroe County; Donald A Rogers, judge.

Charles H. Foley, of Martinsville, and Sylvan W. Tackitt, of Bloomington, for appellant.

L. B. Ewbank and Kivett & Kivett, all of Indianapolis, for appellee.

FANSLER Judge.

The appellant was the plaintiff below. It is alleged in his complaint that on or about the 21st day of March, 1928, he purchased six shares of the preferred stock of the Forbes-Hubbard Lumber Company, an Indiana corporation, and paid therefor $600, the par value of the stock. At the time of and in consideration of the purchase of the stock, the appellees executed the following agreement in writing:

'Whereas D. L. Hayworth of Martinsville, Indiana has this day purchased six shares of Preferred Stock of the Forbes Hubbard Lumber Company, Indianapolis, Indiana represented by certificate 216.

'In consideration of said purchase, the undersigned, Chas. A Hubbard and H. C. Scearce and S. C. Kivett hereby agree and bind themselves to repurchase said stock any time after six month's notice, paying therefore the full par value, plus any earned and unpaid dividends.

'Witness our hands this 21st day of March, 1928.'

On the 24th day of February, 1933, the appellant gave notice to the appellees that he desired that they repurchase the stock according to their agreement; that six months had elapsed and the appellees refused to repurchase. There are further allegations concerning dividends earned and unpaid. The appellees answered by general denial, and two affirmative paragraphs in which the sale of the stock and the execution of the repurchase agreement are admitted. It is further alleged in the answers that the appellant took the stock and received the full benefit thereof without exercising his right to have it repurchased until February 24, 1933; that during all of the time the stock continued to pay dividends and was a good and safe investment and could have been sold for its par value plus earned and unpaid dividends, and that if the plaintiff had exercised his right to have the stock repurchased within three years, the defendants could have sold it without loss; that the plaintiff continued to retain the stock and collect the dividends; and that he is estopped from asserting his rights. A demurrer to the affirmative answers was overruled. The cause was submitted to the court for trial. There were special findings of facts and conclusions of law adverse to the plaintiff, and a judgment was rendered for the defendants. A motion for a new trial was overruled.

Error is assigned upon the overruling of the motion for a new trial and upon the conclusions of law, which conclusions of law are to the effect that the plaintiff is not entitled to recover.

In the special findings the court found that the allegations of the complaint are true; that at the time the stock was issued the corporation was in good financial condition and making profits, and paid dividends until 1932; that in February, 1933, because of the financial depression, the stock could not be sold for par; that the failure of the plaintiff to exercise his right to have the stock repurchased prior to February, 1933, was in no way due to the fault or failure of the defendant; that the plaintiff did not exercise his right to have the stock repurchased 'within a reasonable time.'

The trial court construed the words 'any time,' as used in the contract, to mean 'within a reasonable time,' and assumed that the question of what was a reasonable time was a question of fact to be determined from the evidence submitted.

It is everywhere agreed that words used in a contract are to be given their usual and common meaning unless, from the entire contract and the subject-matter thereof, it is clear that some other meaning was intended. In Grey v. Pearson (1857), 6 H.L.C. 60, 104, 106, Lord Wensleydale said: 'I have been long and deeply impressed with the wisdom of the rule, now, I believe, universally adopted, at least in the Courts of Law in Westminster Hall, that in construing wills and indeed statutes, and all written instruments, the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no further.' (Emphasis supplied.) The above quotation is cited with approval in Williston on Contracts, Rev.Ed., Vol. 3, § 618, p. 1777. In Restatement of the Law of Contracts, § 235, p. 320, it is said: '* * * the ordinary sense of words both singly and in collocation is adhered to unless doing so would lead to some absurdity, or repugnance or inconsistency with the rest of the instrument. In such cases, so far as is necessary to avoid that absurdity or inconsistency, but no further, the ordinary sense of words may be modified and rules of grammar disregarded.' This principle seems settled beyond debate.

Webster, defining 'any,' says, among other things, 'of an amount, quantity, number, time, extent: a. Great, unmeasured, or unlimited; up to whatever measure may be desired or needed; the whole * * *.' And again, 'indicating a person, thing, etc., as one selected without * * * choice * * *.' It cannot reasonably be doubted that in ordinary understanding 'any one' means any person indiscriminately and without limitation, and that 'anywhere' means, as Webster says, 'at one place equally well with another,' and that the right to do a thing at any time is taken to be a grant of time without limit. In Kincaid v. Overshiner et al., 1912, 171 Ill.App. 37, 42, the court said: 'Defendants insist that at the time of the execution of the agreement by them the stock was worth par value and so continued until 1907, that the delay by plaintiff in demanding performance is unreasonable, that having taken the stock when it was at par value and holding it during two years or more while it continued at par, he should not be permitted to hold it more than five years at a time when the corporation had become insolvent and the stock worthless, and then force defendants to purchase it at part. It is too late now for defendants to undertake to seek a new agreement; they did not limit the time when performance should be demanded by plaintiff but agreed to purchase it at any time. The court cannot alter the terms or conditions of the agreement as made.' Certiorari to the Supreme Court of Illinois was denied. See, also, Grotte v. Rachman et al., 1926, 114 Neb. 284, 207 N.W. 204.

The Supreme Court of Oregon, in Paulson v. Weeks, 1916, 80 Or. 468, 469, 473, 157 P. 590, 591, 592, Ann.Cas.1918D, 741, 742, 743, considered a sale of stock, with an agreement that, "if plaintiff should at any time thereafter become dissatisfied with the purchase," the defendant would repay the purchase money. It is recognized in the opinion that: 'Primarily the word 'any' implies unlimited choice as to the particular unit, number, or quantity * * *.' But it is said that the words 'any time,' when employed in agreements like the one then under consideration, are almost universally construed to mean a 'reasonable time.' The basis of the decision seems to have been that the demand to repurchase was not made within a reasonable time after the purchaser became dissatisfied. It is noted that the contract does not provide that if the plaintiff should become dissatisfied, the defendant will at any time thereafter repay the purchase money. It did provide that, "if plaintiff should at any time thereafter become dissatisfied," the defendant would repay the money.

The Supreme Court of Massachusetts recognized such a distinction in Armstrong v. Orler, 1915, 220 Mass. 112, 115, 116, 107 N.E. 392, 393, 394, when it said: 'But the agreement which the judge found the defendant made was not an agreement to take back upon the plaintiff's being dissatisfied with the purchase, but was an absolute agreement that he 'would buy back from the plaintiff these stocks and bonds at any time he (the plaintiff) desires to return the same.''

There is language in some of the cases to the effect that where no time for performance is specified in a contract it must be performed within a reasonable time, and that where the contract provides that it is to be performed within a reasonable time the effect is the same as though no time had been mentioned and the words 'within a reasonable time' had been omitted. To say therefore that 'any time' means 'within a reasonable time,' is to say that the words 'any time' are to be given no effect whatever. Such a construction violates the fundamental rule which requires that all of the words in a contract be considered in determining its meaning. It has been said that the requirement that a contract be performed immediately requires performance within a reasonable time under the circumstances. But some courts have pointed out that in order to give effect to the word 'immediately,' it must be held to require performance more quickly than in the reasonable time which would be required in the absence of the word 'immediately.' See 17 C.J.S., Contracts, § 358, p. 817. This is consistent with the requirement that words in a contract cannot be ignored.

Contracts for the purchase or sale of property are of such a nature that it is generally inconceivable that the parties intended that the privilege of exercising the right should be open forever, and so it is difficult to find a contract in which the words 'any time' may be literally construed as granting a right in perpetuity. It is not because the words themselves in their ordinary...