Osgood v. Skinner

• Decision Date: 23 June 1904
• Citation: 211 Ill. 229,71 N.E. 869
• Parties: OSGOOD v. SKINNER et al.
• Court: Illinois Supreme Court

211 Ill. 229

71 N.E. 869

OSGOOD

v.SKINNER et al.^*

Supreme Court of Illinois.

June 23, 1904.

Appeal from Appellate Court, First District.

Action by John Skinner and another against J. C. Osgood.From a judgment in favor of plaintiffs, affirmed by the Appellate Court(111 Ill. App. 606), defendant appeals.Affirmed.Peck, Miller & Starr and Chester M. Dawes, for appellant.

John S. Winter, Cratty Bros., Jarvis & Latimer, and Chester E. Cleveland, for appellees.

CARTWRIGHT, J.

The parties to this suit entered into a contract dated July 28, 1890, by which the appellees, John Skinner and William Emerson, agreed to sell to the appellant, J. C. Osgood, certain property described in the contract, known as the Liverpool Railway Company, the Dunfermline coal mine and equipment, including store buildings, miners' houses, leases, stock of goods, etc., in Fulton county; and appellant agreed to pay appellees $10,000 in cash, and give his two promissory notes, for $12,500 each, and transfer to them 650 shares of fully paid, nonassessable capital stock of the Whitebreast Fuel Company, of the par value of $100 each, together with an agreement obligating himself to purchase from them the stock so transferred to them as part compensation for their property, provided they should elect to sell said stock by written notice to him on or before August 1, 1891, in which case he would receive and pay for said stock its par value on or before October 1, 1891.On August 1, 1890, said parties performed said contract, and an agreement between them was then executed under seal, reciting the conveyance and transfer of the property by appellees to appellant, and the delivery to them, in part payment for the same, of said 650 shares, of the par value of $100 each, of the fully paid, nonassessable stock of the Whitebreast Fuel Company, and concluding with the following agreement of the appellant:

‘Now, therefore, in consideration of the foregoing, said first party does hereby agree and obligate himself to purchase from said second parties the above-described six hundred and fifty (650) shares of stock, and pay for the same at par on or before the first day of October, 1891: Provided, however, that said second parties shall first notify said first party, in writing, at his office at No. 18 Broadway, in the city of New York and State of New York, on or before the first day of August, 1891, of their election to sell said stock to said first party hereunder.

‘It is agreed that time is of the essence of this contract, and that unless written notice, as above set forth, is served by said second parties, or their agent duly authorized, on said first party, then said first party shall be relieved from any and all obligations to purchase said stock from said second parties hereunder.

‘Witness the hands and seals of the parties hereto, this first day of August, A.D. 1890. J. C. Osgood.[Seal.]William H. Emerson.[Seal.]John Skinner.[Seal.]

‘Witness: Glenn W. Traer.’

The 650 shares of stock were transferred to appellees in severalty, in equal shares-325 sharesto appellee Emerson, and 325 shares to appellee Skinner.On August 27, 1890, the appellant, in reply to a letter of the appellee Emerson, stated that it was his understanding that under the agreement he would buy the stock of either appellee, should one wish to sell, and the other not, and that the letter could be attached to the contract.Appellant refused to perform his contract so far as the stock of appellee Skinner was concerned, and this suit was brought in assumpsit by attachment, in the name of appellees for the use of the appellee Skinner, to recover the contract price.There was a verdict and judgment for the price agreed to be paid, together with interest, after deducting dividends on the stock received by appellee Skinner.The Branch Appellate Court for the First District affirmed the judgment.

On the trial the defendant requested the court to direct a verdict in his favor, and the refusal of the court to do so is assigned as error.In the argument several reasons are presented for the request to direct a verdict.The first is that the contract was void, under section 130 of division 1 of the Criminal Code, as a gambling contract.That section provides as follows: ‘Whoever contracts to have or give to himself or another the option to sell or buy, at a future time, any grain, or other commodity, stock of any railroad or other company, * * * shall be fined not less than $10 nor more than $1,000, or confined in the county jail not exceeding one year, or both; and all contracts made in violation of this section shall be considered as gambling contracts, and shall be void.’1 Starr &C. Ann. St. 1896, p. 1295, c. 38, par. 253.It is the duty of courts to enforce contracts, or award damages for their breach, and it is generally sufficient to authorize a recovery if the evidence shows that one capable of contracting has entered into an agreement upon sufficient consideration.Such a contract is not to be strained for the purpose of bringing it within a criminal statute, and it is clear that this contract contained no gambling element.The stock was turned over by defendant to the plaintiffs with a distinct agreement that they should have the right, by giving notice on or before August 1, 1891, to return it and receive its par value in money.It was not the intention to contract for a mere option or privilege to sell stock at a future time, or to gamble upon the future price of the stock.The plaintiffs received the stock on condition that they should have the par value of it, if they so desired, and the evident purpose was to guaranty a certain value to the stock which they received for their property.It is only contracts for an option, and of the nature of gambling contracts, which come within the meaning of the Criminal Code.The contract was not a gambling contract, or one prohibited by law.Minnesota Lumber Co. v. Whitebreast Coal Co., 160 Ill. 85, 43 N. E. 774,31 L. R. A. 529;Ubben v. Binnian, 182 Ill. 508, 55 N. E. 552;Wolf v. National Bank of Illinois, 178 Ill. 85, 52 N. E. 896;Loeb v. Stern, 198 Ill. 371, 64 N. E. 1043.

The next reason alleged is that the plaintiff Skinner, for whose use the suit was brought, did not perform the contract on his part, in failing to tender the shares of stock to the defendant.The evidence on that subject was that both plaintiffs elected to sell their stock to the defendant, and delivered their certificates to the American Trust & Savings Bank of Chicago, accompanied with their power of attorney authorizing the bank to give to defendant the notice provided for by the agreement.On July 7, 1891, G. B. Shaw, president of the bank, wrote a letter addressed to the defendant at his office, at No. 18 Broadway, New York City, which was duly received, stating the contract, giving the numbers of the certificates and the number of shares in each, and notifying defendant of plaintiffs' election; that they desired him to purchase and pay for the stock according to his contract; and also notifying him that the certificates would be forwarded to him through the National Bank of the Republic, the correspondent of the American Trust & Savings Bank, in New York City.On September 17, 1891, the certificates of Skinner were sent to the National Bank of the Republic, assigned to the cashier of that bank, to be assigned and delivered to the defendant.On the same day the plaintiff Emerson met the defendant in Chicago, when the defendant said that he repudiated the contract, and would not be bound by it; that he would not perform it because Skinner had violated an oral contract with him; and that contracts of that character were unlawful, being optional contracts.He had also told Glenn W. Traer that the contract was void; that he was not legally bound, and was not morally bound because Skinner had violated an oral agreement with him.The defendant settled with Emerson and took his stock, but he did not perform his agreement to purchase and pay for the stock of Skinner, and it was reassigned by the cashier and returned on November 25, 1891.The argument is that the failure to present the certificates of stock to the defendant personally was fatal to the right of recovery.

Whatever the rule may be as to the sort of tender required under a contract to purchase shares of stock, the law does not require a needless formality, and an actual tender is unnecessary where the seller is ready, able, and willing to perform on his part, and the tender would be a mere useless from.If, before or at the time of performance, the purchaser has declared his intention not to perform, or refuses to do so, the seller need only prove that he was ready and willing to perform on his part.Lyman v. Gedney, 114 Ill. 388, 29 N. E. 282,55 Am. Rep. 871;Scott v. Beach, 172 Ill. 273, 50 N. E. 196;Loeb v. Stern, supra.It is clear that the contract would not have been performed on the part of the defendant if the certificates had been actually handed to him, and he had determined, and announced his determination, not to comply with the contract.This is not denied, but it is urged that the declaration was not to the plaintiff Skinner, and that there is no evidence it was communicated to him or that he acted upon it.The repudiation by the defendant was of the whole contract, as a void and illegal one, and the evidence was that the plaintiff Emerson went to the defendant to see about the contract in which he was interested to the same extent as the plaintiff Skinner.On the motion to direct a verdict, everything which the evidence fairly tended to prove in favor of the plaintiffs was conceded, and it was a fair inference that Emerson was acting for Skinner as well as himself.If it makes any difference whether the repudiation of the contract or the refusal to perform it by the defendant was to Skinner, or one acting for him, it cannot be said that there was no evidence tending to...