Mackey Wall Plaster Co. v. United States Gypsum Co.

• Decision Date: 25 July 1917
• Docket Number: 78.
• Citation: 244 F. 275
• Parties: MACKEY WALL PLASTER CO. v. UNITED STATES GYPSUM CO.
• Court: U.S. District Court — District of Montana

244 F. 275

MACKEY WALL PLASTER CO. v. UNITED STATES GYPSUM CO.

No. 78.

United States District Court, D. Montana.

July 25, 1917

Cooper Stephenson & Hoover, of Great Falls, Mont., for plaintiff.

Scott Bancroft, Martin & Stephens, of Chicago, Ill., and Norris &amp Hurd, of Great Falls, Mont., for defendant.

BOURQUIN District Judge.

Specific performance. It appears that by indenture plaintiff leased to defendant all the former's 'right, title, estate, and interest' in and to certain mining and other property the latter in part land plaintiff enjoyed under lease from a railway company subject to the usual condition of nonassignment and forfeiture for condition broken and of which defendant had notice.

The indenture contained an option to defendant to purchase during the term, and was twice renewed, the last renewal for one year. As additional consideration for the last renewal, defendant agreed that, if it determined it would not exercise the option, it would timely give to plaintiff written notice 'to the effect that lessee will not purchase'; neglect or failure to give such notice obligating it to purchase. Defendant enjoyed the premises seven years, the term ending July 6, 1916. Notice of nonpurchase could be given at any time between July 6, 1915, and May 3, 1916.

Plaintiff alleges defendant failed to give such notice, that plaintiff offered to perform, that defendant refused performance, and plaintiff offers to do equity. Defendant denies said failure to give notice, and pleads waiver and estoppel in respect to notice, and that plaintiff cannot convey a good title nor any in respect to the railway lease.

April 19, 1916, defendant wrote plaintiff as follows:

'United States Gypsum Co., 205 W. Monroe St.

'Chicago, April 19, 1916.

'Mr. A. D. Mackey, 1224 Chestnut Street, Minneapolis, Minn.-- Dear Sir: On May 5th our option to purchase your mill property at Great Falls expires. I am writing you in advance of that date to inform you that conditions in Montana at this time are such that it will be necessary for us to cancel our arrangement with you at the time of its expiration which is July 5th. We have had men looking for gypsum almost constantly since our last meeting, and so far our efforts have been fruitless. If you care to come down and talk the matter over we will be glad to have you do so. Expect to give you formal notice on May 5th that we do not care to purchase your property.

'Yours truly,

O. M. Knode, Manager Operation.'

April 28, 1916, a conference followed in defendant's office between Mackey, plaintiff's president, and Knode, defendant's vice president and manager, Nold, defendant's superintendent, present. The evidence of this conference is as unsatisfactory as usual when oral passages solely between interested parties are relied upon by one of them to escape the obligation of a written contract by which he is otherwise bound, the other party resisting.

Defendant's is the testimony of Knode and Nold, in substance that they told Mackey conditions were adverse, and that defendant had decided not to purchase the property; that Mackey declared he would operate the property, then asked what defendant would do if it would not purchase; that Knode responded he would favor continuing the lease, whereupon Mackey requested such proposition be put in writing and sent to him, which Knode promised. Plaintiff's is the testimony of Mackey, in substance that conditions were discussed; that Knode said that on May 4th or 5th defendant would send Mackey formal notice defendant would not purchase; that later Knode said he would favor continuing the lease; and that Mackey responded that whatever defendant decided to do to send to him at Great Falls.

May 11, 1916, Knode wrote to Mackey, somewhat elaborately reciting that on April 19th he had written Mackey defendant would not purchase, that at the conference he had advised Mackey of defendant's decision not to purchase, that he wished to say defendant is unwilling to purchase the property, and briefly concluding defendant was willing to extend lease and option for an indefinite determinable term. May 12, 1916, and before receiving said letter, Mackey wrote defendant, assuming it had elected to purchase by failure to give notice otherwise. These and later letters seem obvious efforts to create self-serving documents.

The letter of April 19th is not notice to the effect the lessee would not purchase. Notice of rejection of an irrevocable offer, like notice of acceptance of an offer, must be unequivocal and unambiguous. The reason and object are the same in both, viz. so that both parties are bound or both free, or neither is, so that subsequently neither can escape obligation of the contract or impose its obligation on the...