Owens Et Ux v. Wright

• Decision Date: 14 December 1912
• Parties: OWENS et ux. v. WRIGHT et al.
• Court: North Carolina Supreme Court

76 S.E. 735

161 N.C. 127

OWENS et ux.

v.WRIGHT et al.

Supreme Court of North Carolina.

Dec. 14, 1912.

1. Contracts (§ 278^*)—-Actions—Defenses— Nonperformance.

Plaintiff could not recover for breach of contract if he failed to himself comply with the contract.

[Ed. Note.—For other cases, see Contracts, Cent. Dig. §§ 1207-1213; Dee. Dig. § 278.*]

2. Contracts (§ 130*)—Legality—Suppressing Bidding—Public Sales.

An agreement by defendant, after he had bid $5 more than plaintiff at a public sale, that if plaintiff would stop bidding and let defendant have the goods he would sell them to plaintiff at the amount of defendant's bid on condition that plaintiff should, in addition thereto, pay defendant $800 on a certain note, was unenforceable as contra bonos mores, in that it was to suppress bidding at a public sale.

[Ed. Note.—For other cases, see Contracts, Cent. Dig. §§ 654-658; Dec. Dig. § 130.*]

3. Contracts (§ 140*)—Illegality—Illegal in Part.

While defendant's bid of $1,470 was being cried at a public sale, he proposed that if plaintiff would stop bidding and let him have the goods he would sell them to plaintiff at the amount of his bid, provided plaintiff paid defendant $800 additional on a certain note, and plaintiff stopped bidding, and the goods were knocked down to defendant for $1,470. After failing to raise the $2,270 necessary to pay defendant pursuant to such agreement, defendant on a Saturday following stated that if plaintiff would raise $1,880 defendant would "try to hold the offer open until 12 o'clock, but you must hurry up, " and plaintiff raised the sum within that time, when defendant refused to sell plaintiff the goods. Held, that the agreement made on such Saturday was a new proposition independent of the illegal agreement at the auction sale; plaintiff having then abandoned the first agreement, so that the subsequent agreement was valid.

[Ed. Note.—For other cases, see Contracts, Cent. Dig. 713-721; Dec. Dig. § 140.*]

4. Sales (§ 22*)—Agreement.

An offer to buy or sell becomes a binding agreement when the offeree accepts the offer and comunicates his acceptance.

[Ed. Note.—For other cases, see Sales, Cent. Dig. §§ 39-43; Dec. Dig. § 22.*]

5. Usury (§ 95*)—Forfeiture in Equity-Conditions Precedent.

Equity will eliminate usury from a debt only upon the debtor's paying the principal and legal interest; the rule applying to all classes of persons, whether principal or surety, etc., and Pub. Laws 1907, c. 110 (Revisal 1908, § 3712A), making one who loans money upon any article of household furniture and charges an illegal rate of interest, etc., guilty of a misdemeanor, etc., not applying to change such rule.

[Ed. Note.—For other cases, see Usury, Cent. Dig. §§ 198-202; Dec. Dig. § 95.*]

Clark, C. J., and Walker and Allen, JJ., dissenting in part.

Appeal from Superior Court, Durham County; Whedbee, Judge.

Action by J. E. Owens and wife against R. H. Wright and another. From a judgment of nonsuit, plaintiffs appeal. Judgment set aside, and cause remanded for further proceedings.

The complaint sets out two causes of action: (1) To recover damages for breach of contract in regard to the sale of a stock of goods. (2) To restrain the sale of plaintiffs' real estate under the power of sale, contained in a deed in trust from plaintiffs to H. A. Foushee, trustee, securing a note for $4,000 bearing interest from maturity, due 12 months after date, dated August 31, 1909, payable by J. Henry Smith Company, a corporation, and J. E. and Emma D. Owens, to J. Henry Smith, and indorsed to R. H. Wright August 31, 1909. On the back of the note are indorsed certain payments. The ground upon which the injunction is asked is that the note is usurious, and plaintiffs seek to eliminate the alleged usury and set up as a counterclaim or set-off the penalty of double the interest. At the conclusion of plaintiffs' evidence, defendants offered none, and moved for judgment of nonsuit. His honor rendered the following judgment: "This cause coming on to be heard, and being heard at this term of the court, before his honor, H. W. Whedbee, judge, and a jury, at the conclusion of the evidence offered by the plaintiffs, the defendant R. H. Wright, through counsel, waived any right to personal judgment against the plaintiffs, or either of them, for any balance claimed on the note, and moved judgment of nonsuit under all the evidence of the plaintiffs and the admissions of record; and further that the amount admitted to be in the hands of R. P. Reade, trustee, be turned over to the defendant R. II. Wright, to be applied to the note referred to in the pleadings. The motion was allowed. Thereupon it is ordered and adjudged by the court that the plaintiffs take nothing by this action and pay the costs thereof, and that the defendant R. P. Reade, trustee, pay to R. H. Wright the sum of $664.25, less taxes, to be paid by the said trustee; it being the amount admitted to remain in the hands of the trustee after paying off and discharging prior incumbrances. The costs of this action will be taxed by the clerk of the court against the plaintiffs." It appears that pending this action the real estate belonging to plaintiffs was sold under a first mortgage (that of defendant Wright being a second mortgage), and that after satisfying the firstmortgage there is $664.25 only applicable to the second mortgage. From the judgment rendered the plaintiffs appeal.

Guthrie & Guthrie and Manning & Everett, all of Durham, for appellants.

Fuller & Reade and Bryant & Brogden, all of Durham, for appellees.

BROWN, J. 1. In respect to the breach of contract in the sale of the goods the facts are that the Smith Company's goods were being sold at auction by the receivers; there were other bidders at the sale; all had dropped out except plaintiff and defendant. Plaintiff Owens bid $1,465. Defendant bid $5 more. While this bid was being cried, defendant proposed to plaintiff that, if plaintiff would stop bidding and let defendant have the goods, defendant would sell them to plaintiff at the amount of defendant's bid, viz., $1,470, on condition that, in addition to said sum plaintiff should pay defendant $800 on the note hereinbefore mentioned. Plaintiff accepted the proposition and stopped bidding, and the goods were "knocked down" to defendant.

As we understand the case, the plaintiff does not seek to enforce this contract, or to recover damages of defendant for its breach.

Plaintiff could not recover, if nothing else appeared, for two reasons: First, because he failed to comply with the contract himself; and, secondly, because the enforcement of such an agreement, by which bidding at public sales is suppressed, is contra bonos mores, and the law will not assist either party bo enforce such an agreement. Ingram v. Ingram, 49 N. C. 189; Blythe v. Lovinggood, 24 N. C. 22, 37 Am. Dec. 402.

The plaintiff further testifies that he endeavored to raise the $2,270 in time to pay the defendant the $1,470 for the goods and the $800 on the note, but failed to do so, and then informed the defendant that he could not comply with the agreement. Whereupon defendant said to plaintiff on Saturday morning: "I will tell you what I will do. If you will raise $1,880 on this thing, I will try to hold the offer open until 12 o'clock; but you must hurry up." Plaintiff further testifies that he accepted the offer and raised the $1,8S0 and went to defendant before 12 o'clock Saturday to comply with the new agreement: that at 11 or 11:30 a. m. plaintiff saw defendant, who at once said: "You are too late. I have held the thing open as long as I could, and can't hold it any longer, and think I have sold it." The defendant had sold the stock between 10 and 12 a. m. that day for $2,600 to other parties.

We think this last proposition made by defendant to the plaintiff was a new proposition independent of and disconnected with the first agreement made during the auction sale. At the time the defendant made the last proposition, the plaintiff had abandoned the first, and the defendant was in the sole and undisputed ownership of the goods. He then offered to sell them to plaintiff for $1,880 payable by 12 o'clock, and plaintiff accepted the offer.

An offer to buy or sell becomes a binding agreement when the person to whom the offer is made accepts it and communicates his acceptance. 35 Cyc. 52, 53. This last contract has no connection with the first, which was an agreement to suppress bidding and void, and can be enforced without calling in the aid of the first, or illegal, contract. "A new contract, founded on a new consideration, although in relation to property respecting which there had been unlawful transactions between the parties, is not itself unlawful." Marshall, C. J., in Armstrong v. Toler, 11 Wheat. (24 U. S.) 258, 6 L. Ed. 468. The subject is discussed at length in Electrova Co. v. Insurance Co., 156 N. C. 234, 72 S. E. 306, 35 L. R. A. (N. S.) 1216, and many authorities cited; and in Yale Jewelry Company v. Joyner, 75 S. E. 993, at this term—which are cases in point.

2. The plaintiffs Owens and wife, Emma, also aver in their complaint that the $4,000 note hereinbefore described and secured in the deed in trust to Foushee is usurious, and they pray affirmatively "that the defendant H. A. Foushee, trustee, be restrained and enjoined from selling the house and lot of plaintiff Emma D. Owens on the 1st day of July, 1911, as he has advertised so to do, until it can be inquired into and determined by the court what amount, if any, is justly due and owing by the plaintiffs on the note secured by said deed of trust or mortgage." His honor seems to have held with plaintiffs that the note contained certain usurious charges and eliminated them, but in adjusting the matter rested his calculation upon the decision of the court in Churchill v. Turnage, 122 N. C. 426, 30 S. E. 122. To this ruling plaintiffs except and ask us to overrule that case.

The principle settled by that case...