Westfall v. Ellis
| Decision Date | 10 January 1919 |
| Docket Number | 21,028 |
| Citation | 170 N.W. 339,141 Minn. 377 |
| Parties | CHARLES B. WESTFALL v. FRANK M. ELLIS |
| Court | Minnesota Supreme Court |
Action in the district court for Hennepin county to recover $14,800 for breach of contract. The facts are stated in the opinion. The case was tried before Rockwood, J., who when plaintiff rested and at the close of the testimony denied defendant's motions for a directed verdict, and a jury which returned a verdict for $14,235.73. From an order denying his motion for a new trial, defendant appealed. Affirmed.
Vendor and purchaser -- construction of contract.
1. The contract between the parties to this action should be construed to be one of sale and not one for an exchange of properties.
Vendor and purchaser -- when payment may be in property or in cash.
2. The fact that payment may be made in property or in cash, at the option of the purchaser, is not controlling in determining whether a contract is one of sale or barter and exchange.
Authority of joint owner to sell.
3. A contract which authorizes one of two parties who are joint owners of property to sell the same, authorizes a sale for cash only, unless it expressly provides for a different disposition of the property.
Vendor and purchaser -- construction by parties.
4. The contract under consideration here is not so ambiguous as to make applicable the rule that the parties thereto, by their acts, might place a practical construction upon it not borne out by the language of the contract itself.
Vendor and purchaser -- consent to modification of contract -- evidence.
5. Evidence considered and held sufficient to justify the jury in finding that plaintiff did not consent to a modification of his contract with defendant, whereby the latter was authorized to exchange goods, in which they were jointly interested, for land.
Vendor and purchaser -- alternative performance -- effect of disability.
6. Where there is a provision in the alternative to do one or the other of certain things, and the promisor, by his own act, disables himself from performing one of the alternatives, the other becomes a fixed obligation.
Measure of damages.
7. The trial court correctly instructed the jury as to the measure of damages.
George T. Simpson and Hall, Alexander & Purdy, for appellant.
J. B Faegre and Wilbur H. Cherry, for respondent.
Prior to December 4, 1915, plaintiff was the owner of an apartment house in Minneapolis and of 160 acres of land in Renville County, North Dakota. The property was heavily encumbered. Defendant was in control of the Ellis-Hall Company, a corporation engaged in the mercantile business at Brookings South Dakota. The parties met at Minneapolis and entered into negotiations which were concluded at Brookings on December 4, 1915, by the execution of a contract between them. In substance the contract provided that plaintiff should sell and convey to defendant his real property at a consideration of $40,000 for the apartment house and $15,800 for the Dakota land, and should transfer to him two mortgages amounting to $4,000; that the encumbrances against the real estate should be deducted from the purchase price to be paid therefor; that the estimated amount of the encumbrances as to the apartment house was $34,000 and $11,000 as to the Dakota land, and that plaintiff's equity was $6,000 in the house and $4,800 in the land. The contract sets out the obligations of the defendant substantially as follows:
The Ellis-Hall Company was to continue to conduct the department store at Brookings until about March 15, 1916, in order that the stock might be reduced to about $50,000. An inventory of the stock and fixtures was then to be taken, from which their value should be determined. Thereupon defendant was to pay plaintiff, either in cash or in merchandise and fixtures at the valuations shown by the inventory and at the option of the defendant, "the amount of the equity of the party of the first part in said real estate and the said mortgages at their face value and interest accrued thereon * * * estimated at" $14,800. Then follows a provision that the stock and fixtures, after the inventory is taken, "may be sold in bulk, or otherwise, by the Ellis-Hall Company * * * to such purchaser or purchasers, and at such price as said Ellis-Hall Company may desire, and in the event that the amount realized therefor shall be sufficient to realize the full invoice value, with freight and express added, on such stock as so invoiced and estimated at" $50,000, $50,000, "then in that event such deficiency shall be deducted from the amount which the party of the first part would otherwise receive as hereinbefore provided, and there is also to be deducted from such amount all commissions and expenses which the party of the second part or Ellis-Hall Company may incur in their efforts to sell and dispose of the remainder of said stock after it has been reduced as above provided."
The contract further provides that if defendant, or the Ellis-Hall Company, shall be unable to dispose of the reduced stock of goods within a reasonable time after March 15, 1916, plaintiff and defendant, by mutual agreement, may either divide the remaining stock and fixtures or agree upon some other method of adjusting their respective rights under the contract.
The Ellis-Hall Company had a special sale, and early in March, 1916, took an inventory of the reduced stock and fixtures, which showed their value to be $45,854.24. Between December 4, 1915, and the date when the inventory was taken, plaintiff transferred the real property and the two mortgages to defendant as provided in the contract. The agreed value of the property so transferred, after deducting all encumbrances against it and some small cash payments made by the defendant, was $12,953.33. It is admitted this amount has not been paid.
On or about March 8, 1916, defendant disposed of the entire stock and fixtures then remaining by transferring the same to one Cobel, receiving from him therefor a deed to a half section of land in Johnson County, Nebraska, and $7,700 in cash. In the transaction between defendant and Cobel the land was taken at a valuation of $150 per acre. It was mortgaged for $12,000. The net amount received by defendant in money and land, at the agreed valuation, was $43,700, or $2,154.24 less than the value of the stock and fixtures as shown by the inventory. Defendant testified that before making this exchange he informed plaintiff of what he proposed to do and obtained his consent thereto. On the other hand, plaintiff denies that he ever sanctioned the exchange or gave it his approval. Defendant took the deed to the Nebraska land in his own name and kept the $7,700, but offered to execute an instrument showing that plaintiff had an interest in the land. Asserting that, by his conduct in thus disposing of the stock and fixtures, defendant had put himself in a position where he could only perform the terms of the contract by paying cash for the property plaintiff had transferred to him, this action was brought upon a complaint setting forth the contract, alleging its breach, and demanding judgment for $14,800 as damages.
The answer sets forth the exchange of the stock and fixtures for the Nebraska land and money, and alleges that it was agreed that, when the land was sold, whatever amount was due plaintiff, if any, under the contract should be paid to him after deducting the difference between the price at which the stock and fixtures were sold, viz., $43,700, and their value as fixed by the inventory of March 8, 1916, and that defendant held the title to the Nebraska land for the benefit of plaintiff to the extent of his interest under the contract in the proceeds which might arise from its sale.
1. The contract was construed by the trial court as one for a sale instead of one for an exchange of properties, and the case was tried throughout on the theory that this was the proper construction to be placed upon it. Defendant insists that this construction was wrong. If so, there was error in the trial which would necessitate a reversal of the order appealed from. The case turns upon the question which of the two constructions should be placed upon the contract. We construe it to be one of sale. Plaintiff agreed to sell and convey his property at a price in money fixed by the contract. Defendant did not obligate himself to pay in money only. He reserved the right to turn over, in payment therefor, merchandise and fixtures of the Ellis-Hall Company at their inventoried value, to an amount equal to the price set upon plaintiff's property. That payment may be made in something other than money is not a controlling factor in determining whether a contract is one of sale or for the exchange of property. Niebels v. Howland, 97 Minn. 209, 106 N.W. 337; Fagan v. Hook, 134 Iowa 381, 105 N.W. 155, 111 N.W. 981. The rule is stated in Tiedeman, Sales, § 12, as follows:
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