Lawson v. Cobban

• Decision Date: 18 January 1909
• Parties: LAWSON v. COBBAN et al.
• Court: Montana Supreme Court

99 P. 128

38 Mont. 138

LAWSON v. COBBAN et al.

Supreme Court of Montana

January 18, 1909

Appeal from District Court, Silver Bow County; Jeremiah J. Lynch Judge.

Action by Mathilda Lawson against W. S. Cobban and another. Judgment for defendants, and plaintiff appeals. Reversed and remanded with directions.

M. P Gilchrist, for appellant.

Lamb & Walker, for respondents.

SMITH J.

The district court of Silver Bow county sustained a general demurrer to the complaint in this case, which is an action for damages for breach of an executory contract for the sale of real estate, and, in default of further pleading by the plaintiff, entered judgment for the defendants. From that judgment an appeal is taken.

The point to be decided is whether a written agreement by one who signed his name "T. J. Lynde, Adm. Estate of Mary A. Black," and two others, to convey at a future date real estate not owned by them, but belonging to the estate represented by the administrator, said agreement being founded upon a valuable consideration, i. e., part payment of the purchase price, is void and unenforceable, as against public policy. Professor Page, in his work on Contracts (section 326), says: "Contracts are against public policy when they tend to injure the state or the public. 'Public policy is that principle of law which holds that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or against the public good."' Many cases are cited by counsel for the respondents which hold that illegal or immoral contracts will not be enforced. Those cases are not in point here. There was nothing immoral or illegal about this contract. Laymen, as well as lawyers, know that property belonging to the estate of a dead man can be lawfully sold and conveyed by complying with the law governing the procedure in such cases, and that it descends to those entitled thereto if not so sold. The contract in this case cannot be construed as an agreement to convey without an order of court. A man can, for a consideration, bind himself by a contract to convey property which he does not own at the time of making the contract. If the parties intend in good faith to carry out the terms of the contract (and there is nothing in the complaint in this case to negative such intention), and not merely to wager on the price of the subject-matter at a future date, the fact that the obligors do not at the time of the execution of the contract own the property will not prevent the injured party from maintaining an action for its breach. It is matter of common knowledge that men speculate in real estate, and that persons engaged in the real estate business agree, in their own names, and bind themselves, to convey the property of others. It is to be presumed that before entering into such contracts they make reasonably sure, by agreements with owners or otherwise, that they will be able to get title, or, at least, that the property will be on the market before they are obliged to perform. There is nothing in the complaint in this case to indicate that there was any notion in the minds of the parties of defrauding the estate. Courts are reluctant to declare contracts void as against public policy, and will refuse to do so if by any reasonable construction the contract can be upheld. A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done, without violating the intention of the parties. Rev. Codes, § 5032.

In the case of Montana Mining Co. v. St. Louis Mining Co., 20 Mont. 394, 51 P. 824, it was held that an agreement to convey to an adverse claimant a portion of the ground in dispute after patent had been obtained from the United States was enforceable in equity and not against public policy. "A contract is not invalid, nor is the promisor discharged, merely because it turns out to be difficult, unreasonable, dangerous, or burdensome. Thus one who sells goods to be delivered at a certain time cannot excuse himself by saying that he expected to buy the goods, but could not." 9 Cyc. 625. See, also, Beebe v. Johnson, 19 Wend. (N. Y.) 500, 32 Am. Dec. 518. In the case of Arentsen v. Moreland, 122 Wis. 167, 99 N.W. 790, 65 L. R. A. 973, 106 Am. St. Rep. 951, the late Chief Justice Cassoday, speaking for the court, said: "The authorities, both English and American, are to the effect that a vendor who agrees to convey what he at the time knows that he has no right to convey, because the title is in another, thereby assumes the risk of acquiring the title and making the conveyance, or responding in damages for the vendee's loss of the bargain. As aptly stated by Judge Cooley: '*** Such contracts are speculative in character, and the party giving them understands the risk he assumes when the covenant is entered into.' Such contracts for the future delivery of personal property have frequently been characterized by this and other courts as speculative in character. *** One of the definitions of 'speculate' is to 'take the risk of loss in view of possible gain.' Century Dictionary."

Of course, the administrator may not personally profit from the estate, but this does not affect the status of the...