Idaho Grimm Alfalfa Seed Growers' Ass'n v. Stroschein

• Decision Date: 14 January 1926
• Docket Number: 4401,4429,4402
• Citation: 242 P. 444,42 Idaho 12
• Parties: IDAHO GRIMM ALFALFA SEED GROWERS' ASSOCIATION, a Corporation, Appellant, v. F. W. STROSCHEIN, Respondent. F. W. STROSCHEIN, Respondent, v. IDAHO GRIMM ALFALFA SEED GROWERS' ASSOCIATION, a Corporation, Appellant. IDAHO GRIMM ALFALFA SEED GROWERS' ASSOCIATION, a Corporation, Appellant, v. F. W. STROSCHEIN, Respondent
• Court: Idaho Supreme Court

242 P. 444

42 Idaho 12

IDAHO GRIMM ALFALFA SEED GROWERS' ASSOCIATION, a Corporation, Appellant, v. F. W. STROSCHEIN, Respondent.

F. W. STROSCHEIN, Respondent, v. IDAHO GRIMM ALFALFA SEED GROWERS' ASSOCIATION, a Corporation, Appellant.

IDAHO GRIMM ALFALFA SEED GROWERS' ASSOCIATION, a Corporation, Appellant, v. F. W. STROSCHEIN, Respondent

Nos. 4401, 4429, 4402

Supreme Court of Idaho

January 14, 1926

PLEADING AND PRACTICE-GENERAL DEMURRER-MARKETING AGREEMENT-PERFORMANCE-ESTOPPEL.

1. Where parties enter into a contract by the terms of which one of them binds himself to perform at the option of the other upon being given written notice, the party having such option must exercise it in the manner provided by the contract.

2. In an action upon a contract for damages for its breach, where such contract provides that one of the parties thereto is bound to perform at the option of the other upon being given written notice, in order for the party holding the option to state a cause of action for its breach, he must allege that he gave the required notice substantially in the manner provided by the option agreement, or that the giving of the notice was waived and that both parties had expressly agreed to enter into the agreement and be bound by its terms.

3. Where two parties agree that one of them, solely at the option of the other, shall be bound for a term of years to sell certain products to the other, under the terms of a specific marketing agreement, upon the holder of the option exercising it by giving written notice, neither party will be estopped to deny that it is bound by the terms of the marketing agreement until the holder of the option has exercised its right to purchase by giving notice in the manner required by the option agreement. The party holding the option not being bound to exercise it is not bound by the marketing agreement until he does so, and the other party not having any right to demand its acceptance has no right that he can waive until it is accepted.

APPEAL from the District Court of the Sixth Judicial District, for Bingham County. Hon. Raymond L. Givens, Presiding Judge.

First action No. 4401 by appellant association against respondent Stroschein upon a marketing agreement for damages for breach of same; second action No. 4429 by respondent against appellant in assumpsit for alleged value of seed sold and delivered; third action No. 4402 by appellant against respondent for specific performance of marketing agreement and to restrain its violation. Respondent's general demurrer to appellant's complaints in actions 1 and 3 and to answer and counterclaim in action 2, sustained. Appellant elected to stand upon its several pleadings judgment of dismissal in 1 and 3 and money judgment for value of seed in 2. Judgment affirmed.

Affirmed. Respondents to recover costs. Petition for rehearing denied.

Whitcomb Cowen & Clark, for Appellant.

When a person makes a contract to pay money or to perform any other act upon the performance of a condition precedent, he may expressly or impliedly waive the performance of such prior condition at any time, and thereby render his promise absolute. Having once waived the condition, he cannot afterwards insist upon its performance, or claim a discharge by reason of its nonperformance. This principle applies with full force to subscriptions to the stock of a corporation. (2 Fletcher, Cyc. Corp., p. 1302, sec. 598; Hughes Mfg. & Lbr. Co. v. Wilcox, 13 Cal.App. 22, 108 P. 871; Graves v. Saline County, 161 U.S. 359, 16 S.Ct. 526, 40 L.Ed. 732; 6 Cal. Jur., sec. 239; 2 Elliott on Contracts, sec. 1614; 3 Elliott on Contracts, sec. 2050.)

A condition precedent to the taking effect of a contract is said to be waived by the conduct of the party for whose benefit such condition is inserted in treating such contract as in effect, in spite of the breach of such condition. (5 Page on Contracts, sec. 2659, p. 4678; California Raisin Growers' Assn. v. Abbott, 160 Cal. 601, 117 P. 767; Church v. Wilkeson-Tripp Co., 58 Wash. 262, 137 Am. St. 1059, 108 P. 596; 6 R. C. L. 990, secs. 358, 359, 360.)

A waiver of a condition precedent may be implied from any act on the part of the subscriber with knowledge that the condition has not been performed which is inconsistent with an intention to insist upon performance of the condition, and it will always be implied, as a matter of law, and irrespective of the actual intention from any act, with such knowledge, which the subscriber could not lawfully do if he intended to insist upon the condition. (2 Fletcher, Cyc. Corp., 1303.)

John W. Jones and Guy Stevens, for Respondent.

Parties to one contract may specify therein how they may become bound by another contract embodied therein. If they do so contract, they become bound by the additional contract only when it is put into effect in the manner specified. (Spinney v. Downing, 108 Cal. 666, 41 P. 797; Morrill v. Tehama Consol. M. & Min. Co., 10 Nev. 125; Hopkins v. Paradise Heights Fruit Growers Assn., 58 Mont. 404, 193 P. 389; Aftergut Co. v. Mulvihill, 25 Cal.App. 784, 145 P. 728.)

"Mental determination to accept a bare proposal or mere offer, or even acts done in pursuance thereof, are not sufficient to bind the party who makes the offer." (New v. Germania Fire Ins. Co., 171 Ind. 33, 131 Am. St. 245, 85 N.E. 703; 6 R. C. L., sec. 29, p. 606.)

BAUM, District Judge. William A. Lee, C. J., and Taylor, J., concur. Givens, J., took no part. WM. E. LEE and BUDGE, JJ., Dissenting.

OPINION

BAUM, District Judge.

In the months of May, June and July, 1921, certain individuals residing in Bingham county, Idaho, including Stroschein, the respondent herein, in the three above-entitled causes, entered into a certain written agreement termed "Idaho Grimm Alfalfa Seed Growers' Association Agreement," whereby the said individuals agreed among other things to organize a nonprofit association without capital stock, for the purpose of promoting, fostering and encouraging the business of marketing Grimm alfalfa seed co-operatively, for reducing speculation, for stabilizing Grimm alfalfa in harvesting and standardizing their product, and other pertinent purposes.

The agreement provided that if the signatures of growers of Grimm alfalfa seed covering at least 60 per cent of the Grimm alfalfa seed acreage planted in Bingham county, Idaho, were not procured, the agreement would be deemed invalid after notice, and if the required acreage was procured the agreement would become binding upon all the subscribers in all of its terms.

The agreement contained paragraphs numbered one to sixteen, inclusive, and following paragraph numbered fourteen, a marketing agreement containing sixteen main paragraphs and numerous subparagraphs.

The first action was instituted by appellant association against respondent to recover damages under the marketing agreement hereinabove referred to, and paragraph fifteen thereof, for the recovery of ten cents for each pound of Grimm alfalfa seed which it is alleged he produced during the year 1922, and failed to deliver to the association, together with attorney's fees.

The second action was commenced by respondent against appellant association in assumpsit to recover the sum of $ 2,037.14, the reasonable value of alfalfa seed sold and delivered by respondent to the appellant in the year 1921, and for which appellant refused to make payment. Appellant filed an amended answer and counterclaim to the complaint, the same being predicated upon the alleged breach by respondent of the marketing agreement hereinabove referred to, and counterclaimed for damages by reason of the failure of respondent to market his 1922 crop through appellant.

The third action was instituted by appellant association against respondent upon the marketing agreement hereinabove referred to, for the specific performance of the contract and for an injunction restraining him from disposing of his seed crop for 1923, except through appellant.

Respondent interposed a general demurrer to the amended complaint in actions 1 and 3 and to the amended answer and counterclaim in action 2, on the ground that said complaints did not state facts sufficient to constitute a cause of action, and that said answer and counterclaim, respectively, did not state facts sufficient to constitute a defense or counterclaim. The demurrers were each sustained to appellant's several pleadings, and upon the refusal of appellant to plead further judgments of dismissal were entered in actions 1 and 3 and judgment was entered against appellant in action 2. The appeals are from such judgments.

In each of these actions the same proposed sale agreement found in the association agreement is before the court and presents the question as to whether appellant's amended complaints in action 1 and 3 state a cause of action, and in action 2 whether the amended answer and counterclaim state facts sufficient to constitute a defense or a counterclaim to the action filed by respondent.

The issue presented by these appeals is one of pleading therefore, a recital will be made of those allegations common to the respective pleadings to which general demurrers were sustained and pertaining to the agreement in controversy. These several pleadings in effect allege that appellant is a corporation organized and existing under the laws of the state of Idaho, and is a co-operative farm markets association; that during the months of May, June and July, 1921, certain individuals including respondent entered into a certain agreement, a copy of which is attached to all of the pleadings and is what is termed the "Idaho Grimm Alfalfa Seed Growers Association Agreement," and that more than 60 per cent of the Grimm alfalfa seed acreage was signed as in the...