Palmer v. Maney

• Decision Date: 09 March 1928
• Docket Number: 4872
• Citation: 45 Idaho 731,266 P. 424
• Court: Idaho Supreme Court
• Parties: FRED J. PALMER and GEORGE S. PARKS, Respondents, v. J. W. MANEY, JOHN MANEY, H. G. WELLS and E. J. WELLS, as Copartners, Doing Business Under the Firm Name of MANEY BROTHERS & COMPANY, and THE FIDELITY & DEPOSIT COMPANY OF MARYLAND, a Corporation, Appellants

266 P. 424

45 Idaho 731

FRED J. PALMER and GEORGE S. PARKS, Respondents, v. J. W. MANEY, JOHN MANEY, H. G. WELLS and E. J. WELLS, as Copartners, Doing Business Under the Firm Name of MANEY BROTHERS & COMPANY, and THE FIDELITY & DEPOSIT COMPANY OF MARYLAND, a Corporation, Appellants

No. 4872

Supreme Court of Idaho

March 9, 1928

CONTRACT-INTERPRETATION-BREACH OF PROMISE TO PAY IN SPECIFIC ARTICLES-DAMAGES-PARTNERSHIP.

1. Contract conveying right, title and interest to irrigation project held not void for indefiniteness by reason of provision authorizing grantees to proceed by method other than as authorized by Carey Act for reclamation of lands by obtaining permission of state engineer.

2. Contract conveying right, title and interest in irrigation project held not unenforceable owing to noncompletion of project because of provision for payment of consideration by transfer of paid-up water rights and water contracts grantees, in absence of provision limiting time for completion, being required to complete system and deliver water rights and contracts within reasonable time.

3. Where purchasers of interest in irrigation project, in consideration of transfer of paid-up water rights and water contracts of a certain value, failed to complete project, measure of damages to vendor is not limited to actual damages sustained, since purchasers cannot take advantage of their own nonperformance to absolve themselves from payment of purchase price, and agreement determining value of water rights, together with bond given to secure payment thereof, constituted in effect fixing of purchase price.

4. Vendors of right, title and interest in irrigation project in consideration of the transfer of water rights of agreed value, with an additional consideration contingent on success of enterprise, held not copartners with purchasers in such undertaking, having no voice in management and no control over purchasers in carrying on the work.

5. Mere agreement to share in profits, of itself, constitutes neither a "partnership" nor a "joint adventure," such relationship requiring showing that such was intent of parties, or such as to estop a denial of it against third parties.

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Clinton H. Hartson, Judge.

Action to recover on surety bond. Judgment for plaintiffs. Affirmed.

Judgment affirmed. Costs to respondents. Petition for rehearing denied.

Karl Paine, for Appellants.

The transaction evidenced by exhibit "A," and the state contract made in the pursuance thereof, was a joint adventure of the parties of exhibit "A" and created a quasi-partnership relation between them and not the relation of vendor and vendee. (C. S., secs. 5818, 5819; 30 Cyc. 349; McKeel v. Mercer, 118 Okla. 66, 246 P. 619; Boles v. Akers, 116 Okla. 266, 244 P. 182; Perry v Morrison, 118 Okla. 212, 247 P. 1004.)

The measure of damages adopted by the trial court is not applicable to a promise to pay a specified sum of money in real estate or in securities. (Butcher v. Carlile, 12 Gratt. (Va.) 520; Clemmer v. Merriken, 144 Md 675, 34 A. L. R. 928, 125 A. 394; Henry v. North American Ry. Const. Co., 158 F. 79, 81, 85 C. C. A. 409; Cleveland & Pitts. R. R. Co. v. Kelley, 5 Ohio St. 180; Starr v. Light, 22 Wis. 433, 99 Am. Dec. 55.)

The interpretation of the contract given to it by the trial court converted the provision to pay $ 39,400 in property into a promise to pay $ 39,400 in money as liquidated damages for a breach thereof. Such an interpretation is contrary to the policy of the law. (Alvord v. Banfield, 85 Ore. 49, 166 P. 549; City of El Reno v. Cullinane, 4 Okla. 457, 46 P. 510; Heatwole v. Gorrell, 35 Kan. 692, 12 P. 135.)

Charles E. Winstead, for Respondents.

The contract exhibit "A" is a contract of sale and not an agreement for a future contract or a contract of partnership. (30 Cyc. 374; 20 R. C. L. 826, 827; 19 L. R. A. N. S., 1013, note.)

The measure of damages for breach of a contract to pay a fixed sum in a particular commodity or specific articles of property, is the sum stated and the value of the commodities at the time of the breach is not material. (17 C. J., 865, 866; Ann. Cas. 1916A, 965, note; E. I. DuPont etc. Co. v. Schlottman, 218 F. 353, 134 C. C. A. 161; Marshall v. Ferguson, 23 Cal. 66; Cummings v. Dudley, 60 Cal. 385, 44 Am. Rep. 58; Beckwith v. Sheldon, 168 Cal. 742, Ann. Cas. 1916A, 963, 145 P. 97.)

The measure of damages for breach of a contract to pay a fixed sum in securities follows the above rule and is the sum stated, and the value of the securities at the time of the breach is immaterial. (Beckwith v. Sheldon, supra; Irvine v. Postal Tel. Co., 37 Cal.App. 60, 173 P. 487; Etienne v. Etienne, 42 Cal.App. 441, 183 P. 689; Cameron v. Orleans & J. R. Co. (La.), 32 So. 208; Cosard v. Bunker, 2 S.D. 294, 50 N.W. 84; Grant v. Burleson P. & Co., 38 Tex. 214.)

Respondents made out a prima facie case when they showed that the appellant, Maney Brothers & Company, had failed to deliver the water contracts when they should have been delivered, entitling them to judgment for the face value of the water contracts with interest from date of default. (34 A. L. R. 934, note; Henry v. North American Ry. Const. Co., 158 F. 79, 85 C. C. A. 409; Sirlott v. Tandy, 3 Dana (Ky.), 142; Orange, A. & M. R. Co. v. Placide, 35 Md. 315.)

BABCOCK, Commissioner. Adair, C., Wm. E. Lee, C. J., and Givens and T. Bailey Lee, JJ., concurring.

OPINION

BABCOCK, Commissioner.--

This action was brought by the respondents on April 17, 1924, to recover from appellants the penalty in a certain bond for $ 25,000 given to the respondents by the appellants, Maney Brothers & Company, a copartnership, as principal, and the appellant, Fidelity & Deposit Company of Maryland, a corporation, as surety, guaranteeing the performance on the part of the appellant copartnership of certain provisions of a contract made between the respondents and the said copartnership on June 7, 1913.

The contract recites that the respondents agreed to sell and convey to Maney Brothers & Company all their right, title and interest in and to the Jordan Valley Irrigation Project, situated in Malheur county, Oregon.

By subdivision (b) of paragraph 1 respondents agree:

"To accept as full compensation and consideration for the rights and property so to be transferred, conveyed and assigned as aforesaid, the sum of Thirty Nine Thousand Four Hundred Dollars, payable in manner following, to wit:

"$ 14,400 shall be paid in fully paid water rights at the rate of Thirty Dollars ($ 30.00) per acre for four hundred eighty (480) acres of land, to be selected by the parties of the first part, which land may be situated under any part of said project as finally located and constructed.

"$ 25,000 shall be paid in water contracts executed by owners and entrymen of land under said project for the purchase of water rights for the irrigation of said lands, which water contracts shall be taken at their par or face value, and if said contracts cover patented land or land upon which final proof has been made, they shall be a first lien thereon, and if upon land, the legal title to which still stands in the United States or the State of Oregon, they shall be a prior lien thereon, superior to all other liens and incumbrances, and subject only to the paramount title of the United States or the State of Oregon. Such contracts may be selected by first parties out of the water contracts taken by second party or its assigns.

"And in addition to the aforesaid sums, the first parties shall be entitled to receive twenty per cent (20%) of the net profits derived by second party, or its assigns, from the sale of water rights to lands under said project in excess of Ten Thousand (10,000) acres, and also one-half of the net profits derived from the sale of town lots in any and all townsites situated on said project, and which said party or its assigns may undertake to handle or promote. But in lieu of the aforesaid water contracts, water rights, commissions or interest in the sale of water rights for other lands, and in the sale of town lots, as aforesaid, first parties will accept the sum of Forty Five Thousand Dollars ($ 45,000) payable in lawful money of the United States, on or before the first day of July, 1914, and upon such payment being made they will give an absolute and full release of all demands of whatsoever kind for any other or further consideration under this agreement, and such payment shall be in lieu of all other considerations herein agreed to be paid."

By subdivision (a) of paragraph 2, Maney Brothers & Company agree, in consideration thereof:

"(a) To pay the consideration hereinbefore stated, in the manner and at the time or times herein provided, and to furnish a surety bond signed by some solvent surety company acceptable to the parties of the first part, in the sum of Twenty Five Thousand Dollars ($ 25,000) guaranteeing the delivery to first parties of said paid up water rights for the four hundred eighty (480) acres of land, and of the said water contracts to the amount of Twenty Five Thousand Dollars ($ 25,000)."

The bond on which the action is brought is dated June 17, 1913, and reads, in part, as follows:

"Now therefore, if the above bonded principals, their executors, administrators or assigns, shall in all things on their part observe, perform, fulfill and keep all and singular the clauses, conditions and agreements which on the part of said principals, their executors, administrators or assigns, are to be observed, performed, fulfilled and kept, relative to the delivery of said paid-up water rights for four hundred eighty (480) acres of land, and to the delivery of said water contracts to the par...