Thatcher v. Darr

• Decision Date: 06 August 1921
• Docket Number: 969
• Citation: 27 Wyo. 452,199 P. 938
• Parties: THATCHER v. DARR
• Court: Wyoming Supreme Court

199 P. 938

27 Wyo. 452

THATCHER v. DARR

No. 969

Supreme Court of Wyoming

August 6, 1921

ERROR to the District Court, Big Horn County; HON. P. W. METZ Judge.

Action by J. D. Thatcher and others against D. L. Darr to recover damages for the breach of a contract providing for the repurchase of corporate stock by defendant. A demurrer filed to the amended petition was sustained by the trial court and plaintiff electing to stand upon their amended petition, a judgment was rendered dismissing the action. Plaintiffs bring error.

Reversed and remanded.

Louis J. O'Marr and Alex C. Shaw, for Plaintiff in Error.

This was an action upon a written contract to which two points were urged in defense; 1st, that the contract was one to produce evidence and void against public policy, 2nd, that conditions governing the purchase of capital stock had not been complied with by plaintiffs; the first point is refuted by the plain terms of the contract itself and does not come within the rule of public policy affecting the validity of contracts. (13 C. J. 448.) An agreement to furnish evidence is not invalid. (Wood v. Casserleigh, 71 P. 360; Smith v. Hartzell, 63 S.E. 172.) The suit is for damages for failure of defendant to repurchase the stock which was separate and distinct from the agreement to sell and deliver the stock. (13 C. J. 515; Packard v Byrd, 51 S.E. 678.) It is contended by defendant that the obligation to purchase stock was conditioned upon the issuance of patent for the lands and as only a part of the lands were patented, the condition was not fulfilled. Paragraph 4 of the contract made the terms of purchase absolute. It was not incumbent upon plaintiff to allege what the agreement really was, there being an ambiguity in its terms. (Durkee v. Coda, 16 P. 5; Lambert v Haskell, 22 P. 401; Hill v. McCoy, 81 P. 1016.) The contract is ambiguous in terms but it is the policy of the law to uphold contracts rather than destroy them where a contract is susceptible of two meanings one of which would destroy and the other render it enforceable. (13 C. J. 539. Richardson v. Altoona, 100 P. 50.) Considering the terms of the contract here in question, it should, in view of the transaction be construed to require defendant to repurchase the stock. (Salisbury v. Spafford, 126 P. 400; Catron v. Joseph, 1 L. R. A. N. S. 1120.) The delivery of the stock was in reality in the nature of collateral security for the payment of a debt. In such cases the courts hold that the debt must be paid withn a reasonable time. (Noland v. Bull, 33 P. 983; Johnston v. Schenek, 50 P. 921; Busby v. Mining Co., 75 P. 725; Harkinson v. Dry, 6 Colo, 69; 13 C. J. 684.) The demurrer to the amended petition should have been over ruled.

C. A. Zaring and Lonabaugh and Wenzell, for Defendant in Error.

The petition shows that patent was not issued for the lands in accordance with the agreement, and therefore does not state a cause of action. More over the contract sued upon is void as against public policy. The terms of the contract are not severable; no cause of action could arise until all of the lands are patented. Conditions precedent must be performed before the agreement of the parties becomes valid and binding, and this must be shown by the petition. (Redman v. Eetna Co., 4 N.W. 591; Gould on Pleadings, Chap. 4, Sec. 13. Patrick v. Smelting Co., 38 P. 236.) Breach of condition is a breach of the whole contract, which gives to the other party the right of avoiding it. (2 Parsons on contracts, 656.) Where the obligation hinges upon the happenings of a contingency, its occurrence must be alleged in an action for recovery. (Root v. Childs, 70 N.W. 1087; Briggs v. Rutherford, 101 N.W. 954; Wilson v. Clark, 20 Minn. 367; Husenetter v. Gullikson, 75 N.W. 541; Sutton v. Lowry, 104 P. 545; Hall v. International Union, 170 S.W. 631; Floyd v. Pugh, 77 So. 323.) The contract was void as against public policy in that there was an agreement to give testimony in support of applications to the Government for land patents, for which $ 7,000.00 was to be paid in stock, which stock the party of the second part agreed to purchase at par value within one year from the date of the issuance of the patent. Such agreements are condemned by the court as supplying a strong temptation to the committing of perjury. (9 Cyc. 500; Greenwood, Public Officers, 5.) An agreement to receive pay for the giving of evidence is void as against public policy. (Quirk v. Muller, 36 P. 1077; Hughes v. Mullins, 92 P. 758; Cowes v. Co., 71 N.E. 468.) An agreement to pay a witness a per centage of any recovery based upon his testimony is an incentive to perjury. In re Imperatori, 163 N.Y.S. 675; In re O'Keefe, 142 P. 638; Goodrich v. Tenny, 19 L. R. A. 371; Patterson v. Donner, 48 Cal. 369; Stanley v. Jones, 7 Ving. 369; Boardman v. Thompson, 25 Ia. 487; Neese v. Joseph, 30 L. R. A. N. S. 278; Wright v. Sommers, 125 Ill.App. 256.

An agreement to pay a witness a sum contingent upon the success of a contemplated suit is void. (2 Elliott on Contracts, 721.)

POTTER, C. J. KIMBALL, J., and BLUME, J., concur.

OPINION

POTTER, C. J.

In this case a general demurrer was sustained to the amended petition, which had been filed by leave of court after a like demurrer to the original petition had been sustained, and the plaintiffs electing to stand upon their amended petition a judgment was rendered dismissing the action. The case is here on error for the review of that judgment.

The action was brought to recover damages for the alleged failure of the defendant to purchase and pay the agreed price for certain shares of the capital stock of a corporation. The amended petition alleges: That on or about March 14, 1914, the plaintiffs and defendant entered into a written agreement whereby the defendant promised to purchase from the plaintiffs, and they agreed to sell to the defendant, seventy shares of the capital stock of the Torchlight Drilling & Mining Association, Limited, at the par value of one hundred dollars per share, within one year from the date of the issuance of patent to said association by the United States Government for the east half of section 24, township 55 north of Range 83 west, in the state of Wyoming, for which patent the said association had theretofore applied; said stock having theretofore been issued to plaintiffs by the defendant pursuant to said agreement. That the agreement provided that as soon as patent issued the defendant should notify the plaintiffs thereof and designate some solvent bank in the city of Portland, Oregon, to act as trustee and to whom plaintiffs should deliver their certificates of stock until payment should be made therefor. The alleged agreement is then set out in full in said petition. That shows an agreement between the seven plaintiffs, as parties of the first part, who are named therein and described as all of Portland, Oregon, and the defendant, as party of the second part, who is described as of Basin, Wyoming; dated March 14, 1914, and it recites that on the 9th day of December, 1904, the parties of the first part executed and delivered to R. B. Magruder a certain power of attorney authorizing him to locate and dispose of mineral lands in their names; that said Magruder transferred said power of attorney to Philip Minor, who made use of the same for the location of mineral lands upon the public domain, and by such authority took up 320 acres of land in the State of Wyoming, to-wit: the east half of section 24, Township 51 North, Range 93 West; that said Minor, acting under authority of said power of attorney, transferred said land to the Torchlight Drilling & Mining Association, Limited; that in the month of December, 1910, said association made final proof on said land and sought to obtain a patent to the same from the United States Government; and "that the Government required certain testimony from the parties of the first part," and "that the said parties of the first part, believing that they had certain rights and interests in the land, and that they have never received any benefits or things of value for their rights or services." The agreement then provides as follows:

"NOW THEREFORE, it is hereby agreed that the parties of the first part will aid and assist the said Torchlight Company to procure a patent to said lands, and for that purpose will make affidavit or affidavits concerning their acts and intentions in connection with the whole matter, and if required will give such testimony whenever called upon to do so by the party of the second part, or his representative and in all other ways give such help to obtain such patents as they may be able to furnish. It being understood between the parties hereto that such affidavits must agree with the truth as shown by the affidavits given Special Agent Rath and the statements this day made to said D. L. Darr.

"In consideration of such services to be rendered in behalf of said Torchlight Company, or to the party of the second part, the said party hereby agrees to issue to the parties of the first part seventy shares of the stock of the said Torchlight Company of the par value of one hundred dollars per share.

"It is further agreed that the party of the second part will buy said stock at its par value within one year from the date of the issuance of said patent, provided, however, that as soon as such patent is issued the said party of the second part shall notify the parties of the first part by letter addressed to their now known addresses, and shall at the same time designate some solvent bank in the City of Portland State of Oregon, to act as trustee and to whom the parties of the first part shall immediately deliver their certificates of said stock to be held by such trustee until payment for the...