146
,FEDERAL REPORTER,
vol. 39;
the railway company- lind the trustees; The value of the income bonds may have been and was purely problematical a11dspeculative, but was that value any less than that of the interest of the construction company in the property? It iavery difficult to believe that it was. Looking at all the circumstances surrounding these transactions, it seems to me that it would be grossly inequitable to permit the complainants to treat this property as then the absolute and indefeasible property cithe construction company, and to charge it with their claim as having been sold and conveyed.in fraud of their rights. The complainants may have lost some portion of the profits expected from their contract, but the construction company lost all that it had; and the railway company, while it received something, got no more than it might have easily obtained from the trustees directly after a forfeiture had been formally declared. Indeed, as I have before said, the parties seem to have acted as if the forfeiture had already been declared, and the interest of the construction company had ceased. The first stipulation in the contract between the railway company and the trustees recites that the conditions in the deed from the trustees to Brooks are annulled, rescinded, and extinguished, and, in lieu thereof, the conditions. following are provided, implying plainly that there was a new transaction between new parties in lieu of that which had proved practically a failure. For these reasons I think that the defendants are entitled to a decree dismissing the bill, and this without reference to the technical questions presented as to the effect of the attachments placed upon the road-bed and masonry. The bill will be dismissed at complainants' costs.
CRABTREE V.
ST.
PAUL OPERA-HoUSE Co.
(Oircuit Oourt, D.· Winnesota.
September 30, 1889.)
1.
CONTRACT-WANT OF MUTUAI,ITY.
Where the agents of a corporation, without authority, enter into a contract containing several provisions forming an entirety, the passage of a resolution by the company ratifying the. contract except as to one provision is a repudiation of the contract, and releases the other party from all obligations on his part to perform it. A corporation passed a resolution ratifying a contract made by its agent, except as to one provision, and the other party to the contract was notified. The latter refused to accept the modification, and two days later left the city where the terms were being settled. .Held, that a resolution passed the day after her departure, ratifying the contract as first made, came too late. . The preliminary contract was for the purchase of property from the corporation, and $5,000 was paid in As to such payment .the provided that "if, of the abstracts aforesaid, the title to the prop.crty.is not good and marketabl.e, or cannot be made so, *. * * the party of the second part, at her optIOn, may be released from thiS contract, and ·the five tbousand dollars paid as aforesaid shall be refunded; but if the MONEY.
2.
SAME.
8
.
SAME-FORFEITURE OF
CRABTREE' f. ST. PAUL OPERA-HOUSE CO.
747
title, is good and marketable, and shall not be accepted by the party of the second part. the five thousand dollars. at the option of the party of the first part, shall be forfeited. " Held that. the company having refused to ratify the contract, the other party was entitled to recover the cash payment.
At Law. Action to recover earnest money. O. E. Holman, for plaintiff. Williams & Goodenow and a. E. Flandrau, for defendant. NELSON, J. A jury is waived by stipulation on file, and the case is tried by the court. I find the following facts, upon which a judgment is rendered: 1. On the 10th of September, A. D. 1888, the following contract was entered into between the St. Paul Opera-House Company and Lotta :M:. Crabtree, a citizen of the state of New York: "CONTRACT.
"Exhibit il. "This agreement. made this 10th day of September, A. D. 1888. 'by and between the St. Paul Opera. Honse Company, a corporation organized under the laws of the state of Minnesota, party of the first part, and Miss Lotta M. Crabtree, of New York city, party of the second part, witnesseth: That in consideration of the sum of one hundred and forty-two thousand five hundred dollars, to be paid by the party of the second part to the party of the fi rst part, as hereinafter prOVided, the party of the first part hereby agrees to grant, bargain, sell, assign, transfer, and set overto the party of the second part, her heirs and assigns, the · Grand Opera-House,' so called, in St. Paul, in the county of Ramsey, in the state of Minnesota, with all the rights, privileges, and easements thereto pertaining, and all the real estate, and all rights. privileges, and easements in any and all real estate in St. Paul aforesaid, partiCUlarly all that certain real estate in St. Paul aforesaid conveyed to the party of the first part by William F. Davidson and Sarah A. Davidson, his wife, by deed bearing date April 1st, 1884, recorded in the office of the register of deeds of the count.y of Ramsey aforesaid, in Book 182 of Deeds, page 693, together with aU the rights of way for ingress or egress in a reasonable manner to or from Maid opera-house as they now exist through the' Grand Block,' so called, and the · Court Block,' so called. and the alley from Fourth street to said opera-house described in said deed, and also for the term in the lease hereinafter described over the strip of land seventeen and one-half feet wide adjoining said twelvefoot strip, leased by John L. Merriam to William F. Davidson by lease and supplemental agreement,both dated June 21st, A. D. 1883, but subject to all the provisions of said 'lease and supplemental agreement. and subject to the rights of all tenants and occupants of block 23 in St. Panl aforesaid, to use said rights of way in common with the party of the second part, her tenants. servants. and patrons. The said right of way through the Grand block and through the Court block is fUlly described in that certain contract bearing date July 20th. 1887, made by and between Sarah.A.. Davidson, Peyton S. Davidson, Edward E. Davidson, James H. Davidson. and Frank L. Johnston, as executors of the last will and testament of William F. Davidson, deceased, of the one partl, and the St. Paul Opera-House Company aforesaid of the other part, which said contract has been exhibited to the party of the second part hereto, and a true copy thereof delivered to her. '.rheparty of the first part covenants and agrees to give or cause to be given and granted to the party of the second part, her heirs and assigns, the perpetual use of the box and man-
vol. 39. 'ager's offices,' and the entraneeand stairway to the gallery of said opera-home 'starting from the main entrance,as lldw nsed and enjoyed by the party of the fIrst part. 'fhe party of the first part also agrees to sell to the party of the second part, as a part of this agreement, all the scenery, stage properties, desk, safe, office furniture, tickets, plats, and aU other personal property and fixtures now being or used in and about the said opera-house and offices as now conducted, and to procure, if desired, from the executors aforesaid, another conveyance more particularly describing the Elxits and. entrances aforesaid, including the exit by the iron staircase as now supported on the outside of said opera-house and Court qlock, and providing for the use of all said exits and entrances by the party of the second part, her heirs, assigns, tenants, servants,and patrons. "In consideration ·of the premises said party of the second part agrees to pay to said party of the first part the sum of one hundred and forty-two thousand five hundred dollars, as follows: Five thousand dollars on the delivery of these presents; seventy thousand dollars on the delivery of good and snfficient dpeds and instruments transferring said property so sold as aforesaid to the party of the second part: and sixty-seven thousand five hundred dollars 011 or before one year from I::leptember 10th, 188!:!, with interest at the rate of seven pp!' cent. per annum, payable semi-annually, said deferred payment to be evidenced and secured by a note and mortgage in the nsual form from the party of the second part to the party of the Jlrst upon all the real estate herein men· tioned and described, and by an insurance against fire to at least fifty thousand dollars in some good insurance company or companies, with Joss, if any, payable to the mortgagees to the extent of its or their interest. The party of the second part agrees to assume and carry out all the contracts heretof'Jre made by the party of the first part with actors, players, singers, and musicians for performances in said opera-house during the season of 1!:!88 and 1!:!89; it being the intention hereof that said party of the second part shall assume all the contracts. with attractions and People's Church made· by said first party for said season, but no other contracts whatever. "It is understOOd and agreed "hat the deed, note, and mortgage aforesaid shall bear date Septem bel' 10th, 1888, but, as the title to said property cannot be examined by that date, it is covenanted and agreed that the net receipts income from performances and church services in said opera-hollse from and after September 10th, 1!:!88, shall be held by the party of the Jlrst part for the use of the party of the second part, to be paid or accounted for to her upon the completion of the sale herein contemplated, with interest thereon from the date of the receipt thereof; and the party of the second part al{l'ees to pay interest ontbe seventy thousand dollars aforesaid from the lOth day of September, A. D. lti88, until the date of the closing of this deal under the terms hereof, if said second party shall then be ready to pElrformon her part; otherwise until she shall be readj'. No interest to be due from the party of the sElco)1d part for the time during which there may be ao.y delay caused by the default or inability of the party of the first part in completing the sale according to the terms hereof. The transaction is to be consummated fifteen days .after the delivery of all the abstracts hereinafter mentioned. Full abstracts . of title of thereal.propertyand easements sold as aforesaid, and the Court block and Grand ,block aforesaid, shall be furnished to the party of the second part, 01' her agent, as soon as practicable. It is understood and agreed that the party of the second part may, if she so IlJect, purchase the stock of the Opel'a-HouseCompany aforesaid, and recei ve the same in of the .of conveyance and aSSignment aforesaid. It is understood and agreed that the sewer.and tUllnelconnections with the public sewers shall remain and be maintained as at present, unlpss ether wise ordered by the municipal authorities. It is understood and agreed that the taxes a,ndassessments provided for
CRABTREE V. ST. PAUL OPERA-HOUSE CO.
749
in said lease from John L. Merriam to William F. Davidson shall be borne and paid, one-half by the party of the first part, or the devisees of said William F. Davidson, and one-half,bY the party of the second part, her heirs and assigns, until the expiration of said lease. Said party of the first part or said devisees in repair and good order the open passage from said opera-house to said Fourth street during the time of said lease. "It is understood and agreedthat the interest of the party of the first part in the bill-boards throughout the city, being a one-half interest therein, shall pass to the, party of the second part under this contract, together with onehalf interest in the bill-posting business, and all the tools, goods, and chattels belonging thereto. It is, understood and agreed that the party of the first part guaranties that the Economy steam-Heat Company will, at the option of the party of the second part, furnish the electric current necessary for electric light and steam heat for said opera-house fOl' the term of five years, upon the followlUg terms, viz.: For the heat, not exceeding two thousand dollars per annum; all the steam radiators and fixtures in the opera-house to be main· tained by the party of the second part. For current for electric lights for each day in the week except Sunday, for ten months in the year, at a sum of not exceeding five hundred and seven dollal'sper month, unless more lights are reqUired than at present, and in that event pro rata for such increased lights, and at a pro rata cost for such portion of the other two months in the year or Sundays as the party of the second part may desire the lights. And said party of the second part may at her option accept either one or uoth of said agreements for furnishing said heat and light, said option to be exercised within three months after the closing of this deal. It is understoOlI and agreed that the party of the first part will cause the entrance to the gallery from Wabasha lltreet aforesaid to be put into a condition satisfactory to the building inspector of St. Paul. and will give satisfactory security for the faithful performance of this covenant, and will indemnify said second party, her heirs and assigns, agai nst all loss, damage, suits, and costs that the said second party may suffer or incur by reason of a non-compliance with said inspector's reqUirements heretofore made as to said gallery entrance. It is understood and agreed that the party of the first part will furnish to the party of the second part satisfactory security for the payment of the upon the Grand block and Court block covel'lng the right of way aforesaid through said blocks, and forever to keep and Indemnify the party of the second part, her heirs or assigns, from all harm, let, trouble, damage, costs, suits, that shall or may at any time arise or come out of the said mortgages. "It is further agreed, and said first party guaranties, that said second party shall have and enjoy all and the same priVileges and rights pertaining to said bill-boards and makiug paste for the season of 1888-89 heretofore granted uy the estate of William F. Davidson, deceased: provided, that said enjoyment shall not interfere with the sale or improvement of any of the property of the said estate. It is agreed that said second party shall have reasonable access to all books of account kept by said first party in the management of its business, and that all contracts for performances for the season of 1888-89 shall be delivered to said second party when the other papers provided for herein are passed. It is agreed tbat said second party shall have full and complete possession and control of all the property herein described, and under the conditions herein specified, from and after the date when this deal is closed. It is nnderstood atl agreed that if, npon exarilination of the abstracts aforesaid, the title to the property. is not good 'alld marketable, or cannot be made so within sixty days, (except as to the mortgages aforesaid,) the party of the second part, at her option, may be released from this contract, and the five thousand dallal'S paid as shall be refunded; but if the title is good aud marketable, and shall nqt be accepted by the party of the second pal't, th8
750
FEDERAL REPOn'l'ER,
vol. 39.
five thousand dollars, at the option of the party of the first part, shall be forfeited. "In witness whereof said party of the SeCond part has hereunto set her hand and affixed her seal the day and date first above written"and the said party of the first part has causl'd these presents to be subscribed and its corporate sea), hereto affixed by its treasurer and secretary. "ST. PAUL OPEl'tA-HoUSE Co., "By EDW. E. DAVIDSON, Treasurer. [Seal.] "ANDREW DELANY, Secretary. [Seal.} "LOTTA M. CRABTREE. "Mas. M. A. CRABTREE, Her Atty. "Signed, sealed, and delivered in presence of "C. E. HOLMAN. . "H. L. WILLIAMS, as to Opera-House. "M. D. FLOWER." 2. I find that the contract was executed by Lotta M. Crabtree tlJrough her duly-authorized attorney, and by the St. Paul Opera-House Company through Edward K Davidson, treasurer, and Andrew Delany, secretary, neither of whom had power or authdrity to enter into and exeecute the contract binding on thesaid company... , 3. I find that at the time the contract was executed $05',000, according to the terms thereof, was paid by Lotta:NI. Crabtree to the treasurer of said company, and that the amount oithe deferred installments was by consent of the parties who signed the contract changed so that $95,000, instead of $75,000, was to be paid by the vendee on the delivery of good and sufficient deeds and instruments transferring said property sold, and the balance of the purchase price-$42,500-was to be paid on 01" before one year from September :10,1888, the payment of which deferred sum wa.s agreed to be evidenced and secured by a note and mortgage. 4. I find that on the 29th day of September following the execution of the contract it was submitted to a meeting of the stockholders and directors of the St. Paul Company, regularly called, and the following resolution duly adopted: "RESOLUTION. "The following resolution was offered by F. B. ciarke, and seconded by L. N. Scott, and passed unanimously: " · H.esolved, that the board of directors, ,through its president and secretary, be. and the same are hereby,authorized and empowered to sign, seal, acknowledge, and deliver a deed or deeds of conveyance of the St. Paul Opera-House property, with a.ll easements belonging thereto, toLotta M. Crabtree, and a bill of sale of all the personal property belonging to the corporation, all according to the terms of that certain contra,ctbetween the St. Paul Opera-House Company and said Lotta M. d&te\l September 10,1888, which said contract we hereby ratify .and aflirm, excepting clauses referred to in agreement for sale and possession of ()ne-half interest in bill-boards and bill-board Qusiness. president and,secr'etary are hereby authorized to make the pl"oper conv6yan.ces of said and and make and Qusiness.' " bill of sale of property specIfied. exceptlIlg And said attorney of Lotta Crabtree, who executed the contract, was informed of the adoption of said resolution.' I also find that, at and.
<::RABTBEE
.v.
S:r.PAUL OPERA-HOUSE CO.
751
prior to the passage of this resolution, Lotta M. Crabtree, the party of the second part, prepared and the note and mortgage, and the balance of the last payment was provided by her and brought to the city of St. Paul, and deposited in a bank. I further find that, subsequent to the adoption of their resolution, the officers of the St. Paul OperaHouse Co. made propositions to the attorney of the second part looking to a modification of the contract of September 10, 1888, all of which were declined, and two days after being informed of the passage of the resolution aforesaid she left the city, and .refused to stand by the contract. 5. I find that on October 2, 1888, after the attorney of Lotta M. Crabtree, who executed the contract for her, had been informed of the resolution of September 29th, and had left the city, and refused to have anything further to do with the contract, the following resolution was adopted at a special meeting of the stockholders of the St. Paul OperaHouse Company: "RESOLUTION, &C. "ST PAUL, MINN, Oct. 2. 1888. "A special meeting of stockholders of the St. Paul Opera-House Company, held at following request: · ST. PAUL, MINN., Oct. 2, 1888. " 'A. Delany, See'y. st. Paul Opera-House CO.-DEAR Sm: You are requested to call a special meeting of the stockholders of the St. Paul OperaHouse Company, at 340 Cedar street, this afternoon at 3:30 o'clock. " 'I'. S. DAVIDSON, I Representing stock owned by Esof William F. Davidson.' " · Enw. E. DAVIDSON, \ "A. Delany offered the following resolution, seconded by E. E. Davidson: 'Resolved, that the resolution passed at the meeting of 'stockholders of St. Paul Opera-House Company, held Sept. 29th, 1888, ratifying sale of operahouse property to Lotta M. Crabtree, be, and the same is hereby, amended by strikIng out the following words: "Excepting clauses referred to in agreement for sale and possession of one-half interest in bill-boards and bill-posting business.'" Carried by the following vote: Ayes-A. Delany, E. E. Davidson. Nays-L. N. Scott. At this meeting the following stock was represented: E. E. DaVidson, 100 shares; L. N. ::;cott, 100 shares; P. S. DaVidson, 10 shares; A. Delany, 10 shares; P. S. Davidson and Edw. E. David. son, 3,500 shares, representing stock estate of WIll. F. Davidson."
6. I find that before the commencement of this suit, viz., on February 1, 1889, by a proper instrument in writing, Lotta M. Crabtree duly assigned and transferred to the plaintiff all her right, title, and interest in the sum of $5,000 paid by her to the treasurer of the St. Paul Opera-House Company on the execution of the contract September 10, 1888, and in the following March a demand was made upon the treasurer of the company for the amount. CONcLUSIONS. that the contract dated September 10, 1888, is an entirety, and ratification of the whole was necessary to bind the parties thereto. I am of the opinion that by the passage of the resolution of September 29,1888, the St. Paul Opera-House Company repudiated thecontract of September 10, 1888, and declined to ratify the act of the .treasurerand secretary, who executed it; and Lotta M. Crabtree was
t am of the opinion
752
FEDERAL REroRTER;,
vol. 89.
thus released from all obligation to piJrformon her part, and 'she with. drew from the same, as she had a right to do. I am of the opinion that the contract of September 10, 1888, being treated by the company as imperfect ana inoperative, and n6t a binding obligation, Lotta M. Crabtree could recover the amount paid at the time the contract was executed; and, further, that the assignment from Lotta M. Crabtree to the plaintiff is valid, and entitles her to judgment. I am of the opinion that the resolution of October 2, 1888, amending that of September 29, 1888, if it is a ratification of the contract of September 10, 1888, came too late, and that the minds of the parties never met so as to form a perfect and operative contract. Judgment will be entered in favor of the plaintiff for the sum of $5,000 and interest from September 10, 1888, to date, at the rate of 7 per cent. per annum, being $369.44.
';;;POERI
v.
MASSACHUSETTS MUT. LIFE
INs. Co.
(Circuit Court, E. D. Missouri, E. D.
September 27, 1889.)
LIFE INSURANCE-CONDIT] ONSOF POLICY-W AIVER-ESTOPPEL.
'Where a policy of life insurance provides for a forfeiture unless the premiums thereon are paid ,at maturity, bllt the insurance company has accepted payment of more than half of sllch premiums after maturity, withollt warning of any possible forfeiture in future, if the last premium be paid within the same time after maturity as the majority of the previous ones, the company is estopped from asserting a forfeiture though the insured died before such payment.
At Law. Action to recover on policy of immranee. The facts agreed upon in this case areas follows: Defendant issued a policy of life insurance on the life of plaintiff's husband, dated April 1, 1884. The premiums were payable semi-annually, on April and October 1st, in each year. The policy contained a clause of forfeiture if the premiums were not paid on the day they fell due, and in case of forfeiture thecoinpany stipulated for a release from all liability except such as was imposed on it by the laws of Massachusetts. By the laws of that state, if the assured ceased paying premiums at any time after the payment of two full annual premiums, the policy became a paid-up policy for its net value at the time payments' ceased. The assured died on April 8, 1888. Of the seven semi-annual premiums that fell due after April 1, 1884, and prior to April 1, 1888, four were paid by the assured and accE'pted by the company from 7 to 30 days after they fell due. Three payments only were made at maturity. The final premium due April 1, 1888, was tendered to the company on April 9, 1888, and was accepted by it in ignorance of the death of the assured on the day previous. On discovering that the assured was dead, the con1panyoffered to return that premium, but the plaintiff would not accept it. Plaintiff claims that defendant is liable for the face of the policy, $5,000, and in-