Livesley v. Johnston

• Citation: 45 Or. 30,76 P. 946
• Parties: LIVESLEY et al. v. JOHNSTON et al.
• Decision Date: 16 May 1904
• Court: Supreme Court of Oregon

76 P. 946

45 Or. 30

LIVESLEY et al. v. JOHNSTON et al.

Supreme Court of Oregon

May 16, 1904

Appeal from Circuit Court, Marion County; R.P. Boise, Judge.

Suit by T.A. Livesley and another, partners as T.A. Livesley & Co. against John Johnston and others. Decree for defendants. Plaintiffs appeal. Reversed.

See 76 P. 13.

This is a suit to require the specific performance of a contract or agreement for the sale of hops, entered into September 5 1902, between the defendant Johnston, of the first part, and the plaintiffs, T.A. Livesley & Co., of the second. That portion of it material to the controversy is as follows "That said party of the first part *** for and in consideration of the sum of one dollar in hand paid by the parties of the second part, the receipt whereof is hereby acknowledged, has bargained and sold, and by these presents does grant, sell and convey and agree to deliver unto the parties of the second part, *** 20,000 pounds of hops of the crops to be raised and grown by the party of the first part at or near Woodburn in each of the following years: 1903 1904, 1905, 1906, 1907, on the following described real estate, which is owned by Frank Chappelle, Melane Chappelle and Peter Deltaur [[describing it], and to deliver the said hops in each of said years at Woodburn depot or on board cars free of charge, at such time between the 1st and 31st of October of each of said years as the parties of the second part may direct. Each bale of said hops to contain from one hundred and eighty to two hundred twenty pounds of hops (seven pounds tare per bale to be allowed) and are to be put up in a new 24 oz. bale cloth; the said hops shall be of choice quality, of even color, well and cleanly picked and well cured, but not high or slack dried, and not broken, or mouldy. The said parties of the second part agree to advance to the said party of the first part for the purpose of cultivating, two hundred fifty dollars on or about April, May and June and for picking purposes at and during picking time of September of each of said years, the sum of 4 1/2 cents per pound, and for such advances a lien is hereby granted to parties of the second part on said crop of hops prior and preferable to all other liens; and upon the delivery and acceptance of said hops, the said parties of the second part will pay in current funds of the United States or their equivalent at Salem, Oregon, the balance due on said hops at 9 1/2 cents per pound, that being the agreed price for said hops, and all money advanced for the purposes aforesaid is to be deducted from the purchase price of said hops. The advances made for cultivating shall bear interest at the rate of eight per cent. and advances made for harvesting purposes at the rate of eight per cent. Should said hops be from any cause of a lesser quality than choice, or not delivered in the condition herein agreed upon according to the judgment of said parties of the second part or their agent, the party of the second part shall nevertheless have the privilege of taking the same, or so many of them as will cover the amount advanced on said crop of hops, with interest at the rate of eight per cent. per annum, at a reduction in price equal to the difference in value between such hops and choice. *** The party of the first part shall not be liable (except to repay advances) for any shortage on delivery due to causes beyond his control. It is furthermore agreed that the party of the second part, through their agents, shall have the right to determine at picking time when said advances are contemplated to be made, whether or not the growing crop at that time is in proper condition, and if such agents of the party of the second part shall determine that the growing crop is not in such condition, that said party of the second part shall be released from any obligation to furnish any picking money as called for in this contract." The succeeding clause of the agreement is in effect a chattel mortgage upon the hops to secure the buyer in the repayment of moneys advanced or to be advanced the grower in pursuance of the agreement. The complaint sets out, among other things, the entering into the agreement by the parties; that as part consideration for the execution thereof plaintiffs paid to Johnston the sum of one dollar and also surrendered up and delivered to him certain promissory notes due and payable to the plaintiffs, of the face value of $650; that plaintiffs have performed and have been at all times ready and willing to perform all the agreements and covenants upon their part, and have offered and tendered to Johnston the advances required to be made by them, but that Johnston some time early in the year 1903 notified the plaintiffs that he would not accept any advances, and declared that he would no longer be bound by the terms and conditions of the agreement, and has continuously refused to deliver to plaintiffs the hops produced for the year 1903, consisting of 110 bales, of the aggregate weight of 20,000 pounds; that defendant Johnston is wholly insolvent and unable to respond in damages for the breach of his agreement, and plaintiffs have no plain, speedy, and adequate remedy at law. The purchase price is tendered into court, and a decree demanded that Johnston be required to perform by delivery to plaintiffs of the hops designated. A demurrer was interposed to the complaint and sustained, and, the complaint having been dismissed, the plaintiffs appeal.

Wirt Minor and W.T. Slater, for appellants.

Geo. G. Bingham and P.H. D'Arcy, for respondents.

WOLVERTON, J. (after stating the facts).

In support of the demurrer it is first insisted that the contract or agreement set out, upon which the suit is founded, and which it is sought to have specifically performed, is lacking in the essential of mutuality of obligations between the contracting parties, and is therefore without validity or binding effect. The plaintiffs stand upon the agreement, and, of course, assert its legal efficacy. They insist, first, that it does contain mutual obligations which alone render it binding upon both parties, but, if not that it at least has the force and effect of an option accorded the plaintiffs to purchase the hops, founded upon a sufficient consideration to support it. A promise founded upon a good consideration rendered at the time is obligatory and enforceable. A loan of money and simple-contract debts are familiar instances of the kind. The promise to repay the money or to discharge the debt becomes binding and obligatory by reason of the promisor having received a consideration for making it. When, however, a promise, by whatsoever reason, has become binding, it is more aptly termed an "obligation." But a promise of material import will support a counter promise and vice versa. When mutually entered into, they operate one as a consideration for the other; thus constituting an agreement binding and obligatory upon both parties. Where the agreement is wholly executory, it is essential that the obligations be mutual; else there is no consideration for its support, and it is but a mere nudum pactum. These simple principles, aptly applied, will aid us largely in the present controversy.

The contract is between a producer of hops, on the one part, and dealers in that commodity, upon the other. Its terms unmistakably import a sale of the hops to the amount of 20,000 pounds, to be grown by Johnston in each of the five years designated, and an agreement upon his part to deliver them at Woodburn, on board the cars, free of charge, at such time during the month of October as the second parties may direct. The manner in which the hops shall be baled and their quality are specifically defined. This is a clear and absolute undertaking on the part of the seller. The correlative and reciprocal promises on the other part are that the second parties will advance to the first party $250 on or about April, May, and June of each year for cultivating purposes, and 4 1/2 cents per pound for picking purposes during picking time, in September, and, upon delivery and acceptance of the hops, that they will pay the balance due thereon at 9 1/2 cents per pound, that being the agreed price for the product; all moneys advanced to be deducted from the purchase price. If the contract rested here, nothing else being said, no other provisions made, there could be no cavil or controversy touching its validity and binding effect. It would have then simply been a sale of the hops to be grown, with an agreement to deliver on the one part, and an undertaking on the other part to advance $250 for the purpose of cultivating, 4 1/2 cents per pound for picking purposes, and to pay 9 1/2 cents per pound for the hops upon delivery and acceptance; reserving the right, as was natural, to deduct advances made from the purchase price, paying merely the balance due. The promises of the parties would then have been mutual--that upon the one hand supporting those upon the other, and vice versa, thus creating correlative and reciprocal obligations--and the contract would unquestionably have been perfectly valid and binding upon both parties. But the promises upon the part of Livesley & Co. to advance picking money and accept the hops are materially qualified by subsequent conditions of the contract, and all its provisions must be construed together to arrive at its true intendment. They are interdependent in character, and none can be eliminated without destroying the contractual intendment and relationship of the parties. Should the hops be, from any cause, of lesser quality than choice, or not delivered in the condition agreed on, "according to the judgment" of Livesley & Co. or their agent, the contract accords them the privilege, nevertheless, of taking the...