Wilson v. Hotchkiss

The complaint alleges that plaintiff’s assignor, F. B. Wilson, was, on and prior to October 1, 1907, the owner of one thousand shares of the capital stock of the Star Lumber Company, a corporation,- that prior to said date said F.

Defendant, further answering, set up certain facts as constituting a counterclaim but, as no point is made in the briefs respecting such issue, the facts thus alleged need not be stated.

The cause was tried by a jury and the plaintiff had the verdict on which judgment was entered. Defendant appeals from the judgment and from the order denying his motion for a new trial on bill of exceptions.

The questions presented arise on the rulings of the court on the testimony offered and on its refusal to give certain instructions requested by defendant.

It appears that, on or about October 7, 1907, plaintiff’s assignor, P. B. Wilson, -had a one-third interest in the Star Dumber Company, represented by one thousand shares of its capital stock. Certificates had been issued to him but were at that time in the possession of defendant, indorsed, by Wilson, to secure certain of his indebtedness to defendant and to secure him in case he should have to pay certain obligations on which defendant and Wilson and one Boy Me-

Witness F. B. Wilson, plaintiff’s assignor, testified to the foregoing facts. He" was asked to state the conversation between himself and defendant in regard to the purchase of said shares by defendant from Wilson. Defendant objected on the ground that if it tended to show a sale of the stock of value in excess of two hundred dollars, the law required the contract to be in writing. The objection was overruled subject to a motion to strike out the answer. The witness testified r “Mr. Hotchkiss said he would buy my stock in the Star Lumber Company for the amount I had invested with six per cent interest from the time of investment to date, and would assume all of my obligations at the time, incurred through the purchase of the property and my connection with the Star Lumber Company. He said he would pay me four thousand four hundred and twenty-one and 90/100 dollars ($4,421.90) the next day. We sat down and figured out how much that amounted to; it came to four thousand four hundred and twenty-one and 90/100 dollars ($4,421.90). I said, 6 As long as you are going to buy me out, as long as the stock is in your name, you have got the stock, the stock is in your hands and there is nothing much for you to do but to give me a check. ’ Mr. Hotchkiss said he would give me a check but for me to get my personal account fixed up. I did this and when I returned he stated it was a little late in the afternoon, he wanted to catch a boat, and if I would call the next day he would give me a check for the whole amount. When I called the next day to get my check he asked me if I was in any hurry for it, and asked me to stay in the office and look after the affairs of the Star Lumber Company until he could get somebody else to run the business. I told him I would be as lenient with him as I possibly could, and he agreed to give me personally one hundred dollars ($100) a month more than I had been receiving while I was interested in the company and had charge at the mill. I received no writing showing this agreement or amount due.”

The witness concluded his testimony as follows: “I stayed with the Star Lumber Company about two months after that conversation, at the request of the defendant, and during that time, he paid me the extra $100.00 a month; during that time I asked him repeatedly for the check for the amount I have mentioned, but he put me off from time to time and finally, on January 15th, 1908, refused to pay me.”

Witness McFaul, without objection, testified as follows: “Early in October, 1907, I had a conversation with the defendant regarding Mr. Wilson’s connection with the Star Lumber Company, in which conversation defendant said to me that he had bought Mr. Wilson out.”

Witness Rowe testified as follows: “In the year 1907 I was engaged in the lumber business. In the fore part of October of that year, I had a conversation with the defendant in my lumber yard regarding a shipment of lumber I had received from the Star Lumber Company. The defendant said that every shipment I would receive of lumber would come in better shape, would have more system to it, as he had bought out Mr. Wilson, his partner. A few days later, in the office of the defendant, I had another conversation with him. I saw Mr. Wilson around the office of the Star Lumber Company, and I said to Mr. Hotchkiss, ‘I thought you had bought out Wilson,’ and he said, ‘I have bought out Wilson but he is just helping around the office for a short time. ’ ”

Defendant Hotchkiss testified in his own behalf. He flatly denied making the purchase or of having the conversation testified to by Wilson, but did not deny having made the statements testified to by the witnesses McFaul and Rowe. He testified that he had paid the obligations referred to by Wilson and that Wilson had never contributed anything toward the payment.

The conflict in the testimony -was resolved by the jury in favor of the plaintiff and we cannot disturb its conclusions on the facts.

The facts must necessarily rest in parol or the agreement could not be proved at all if not in writing, nor could it be known whether it fell within the exceptions mentioned in the statute. The ruling was not error for, while the testimony of the witness may not of itself have been sufficient to bring the transaction within the statute, it was admissible as a step toward that end. It went clearly to the point of establishing a sale and purchase by parol. (March v. Hyde, 69 Mass. (3 Gray), 331.) The evidence was that, after the sale Wilson remained with the company for two months at an advance in his compensation which was part of the agreement, and that subsequent to the sale defendant stated to witnesses McFaul and Rowe that he had bought out Wilson and, as Wilson had ceased to be manager and defendant had taken upon himself the control of the company, the business would run along more satisfactorily. Cases have frequently occurred where the buyer, at the time of the purchase by him, was in possession of the property, as bailee or otherwise. In such a case manual tradition is not necessary for it is not required that the buyer should redeliver the property to the seller and the seller then deliver it back to the buyer, but delivery and acceptance are deemed to have been constructively accomplished and, where the conduct of the parties is such as to be inconsistent with any other supposition than that there has been a change in the nature of the holding, the actual transfer of the goods or their symbol is not necessary. Whether such a change

It appears from defendant’s testimony that he paid the obligations of Wilson—the thirty thousand dollar note—on March 1, 1907, and the other notes as they fell due, which, with the exception of a note for three thousand dollars falling due April 19, 1909, was nearly two years before the amended complaint herein was filed. Defendant did not testify that he had ever called upon Wilson for contribution, though he testified that Wilson never contributed anything toward payment of these obligations.

We think there were such acts and conduct on the part of defendant in respect of the property as tended to show an intention to accept it pursuant to the agreement testified to by Wilson and sufficient to go to the jury under proper instructions.

When defendant was on the witness-stand he was asked by counsel: “Have you ever asked to have the stock transferred on the books of the Star Lumber Company?” Again: “I will ask you whether you at any time treated this stock otherwise than as security for the indebtedness which you claim to be owing from Mr. Wilson to you?” These questions were objected to as irrelevant, incompetent, and immaterial and the objection was sustained. The first question, if answered in the negative, would have tended but slightly

It has been held by our supreme court that the denial of a contract is sufficient to raise the question of its sufficiency under the statute of frauds. (Feeney v. Howard, 79 Cal. 525 , [ 12 Am. St. Rep. 162 , 4 L. R. A. 826 , 21 Pac. 984 ].)

However this may be, the answer in this case distinctly raised the issue that the alleged contract was oral and could only be sustained by proof such as the statute of frauds declares to be necessary to bring the contract within its terms; that the testimony of Wilson that he sold the stock to defendant and that defendant purchased it on the conditions testified to by Wilson was not in itself sufficient to meet the requirements of the statute but that there must be some facts or circumstances, in addition to and apart from the oral agreement, tending to show that the stock was received and accepted by defendant with the intention of purchasing it or, that, being then in his possession, he retained it after the oral agreement was entered into in the capacity of purchaser and not as pledgee, in which latter capacity he first received it. While such additional evidence may be slight, and its probative force is for the jury to determine, as we have seen, still it was necessary and the testimony of McPaul and Rowe was obviously introduced by plaintiff to supply this additional evidence.

In view of this issue defendant offered instructions for the purpose of enlightening the jury as to the law governing such transactions as this and to inform them under what circumstances an oral agreement to purchase personal property of the value of two hundred dollars is deemed valid. Defendant, as a witness, testified that he did not purchase the stock, but that he held it only as a pledge and he testified that the conversation in relation to the stock testified to by Wilson never occurred. This sharp conflict in the testimony of Wilson and defendant is referred to by the court in its

Defendant offered six different instructions in an unsuccessful attempt to have placed before the jury the principles embodied in the statute of frauds. The court refused to give any of them and gave no instructions of its own on the subject. On the contrary, its instructions left the jury to treat the case as though no such law as the statute of frauds existed, and that the sole issue they were to determine was whether Wilson or defendant was to be believed. The court, having reference to the testimony given by Wilson and by defendant, instructed the jury as follows: “As the counsel for both parties have informed you, this is a ease where the testimony of the respective parties is absolutely contradictory, and consequently, as it has been very justly said, you will have to accept the statement of one party or of the other, just as the statement of one or the other may or may not commend itself to your judgment as being a credible statement.”

After stating some rules by which the credibility of a witness may be determined and after stating what Wilson claimed as to the sale and what defendant claimed, and giving the rule as to the preponderance of the evidence, the court said: ‘1 Therefore, if you are satisfied, from the preponderance of the evidence, that this stock was sold by the plaintiff (meaning plaintiff’s assignor) to the defendant at the time and in the manner and at the price mentioned (by Wilson, for no other witness testified as to these facts), then it will be your duty to so find.” Referring to defendant’s claim of offset, assuming that he agreed to purchase the stock, the court told the jury: “Now, if you should find that the defendant did purchase this stock of the plaintiff’s assignor as related by Mr. Wilson, then you will inquire whether or not Mr. Wilson was at that time indebted to the defendant in a sum of money equal to or greater than the amount' of the purchase price. ’ ’ Again: “If you should find that no such indebtedness existed, and that the sale was in fact made as stated by Mr. Wilson, then it will be your duty to find a verdict in favor of the plaintiff.” Again: “If you should find that Wilson was not indebted to him (defendant) . . . and that such sale was actually made, upon the terms and conditions stated by Mr. Wilson, then it will be your duty to find a verdict in favor of

It must be true that the mere narrative by Wilson of what was said by him and defendant at the time the sale was made, cannot of itself be sufficient to make the sale valid. It was said, in Marsh v. Hyde, 69 Mass. (3 Gray) 331 : “The great purpose of the enactments, commonly known as the statute of frauds, is to guard against the commission of perjury in the proof of certain contracts. This is effected by providing that mere parol proof of such contracts shall be insufficient to establish them in a court of justice. . . . The verbal agreement of parties must be proved. The statute does not prohibit verbal contracts. On the contrary, it presupposes that the terms of the contract rest in parol proof, and only requires, in addition to the proof of such verbal agreement, evidence of a delivery or part payment under it. It does not, therefore, change the nature of the evidence to be offered in support of the contract. It merely renders it necessary for the party claiming under it to show an additional fact in order to make it ‘good and valid’ ”; ex. gr., delivery or receipt and acceptance. The question of fact here which, as is contended, brought the sale within the statute, was whether

Defendant requested the following instructions which were refused:

“1. Where there is no writing showing the terms of a sale, and the alleged price exceeds two hundred dollars, and no part of the price is paid, it is necessary, in order that the agreement be valid, that the buyer accept or receive part of the thing sold, or part of the evidences thereof. ’ ’

“2. Oral testimony of the making of the contract is not alone sufficient to take the contract out of the statute of frauds, or to make it valid. Facts additional to the making of the bargain must be proved by plaintiff to show the equivalent of receipt or acceptance.”

“3. Mere words are not sufficient to prove a receipt or acceptance of the personal property to take an oral contract of the sale of personal property for a price exceeding $200 out of the statute of frauds. The acts of the parties proved must be of such a character as to unequivocally place the property within the power and under the exclusive dominion of the buyer.”

“4. To satisfy the statute of frauds there must be a delivery by the seller, with an intention of vesting the right of possession in the buyer, and there must be an actual acceptance or receipt by the buyer, with the intention of taking possession as owner. This rule can only be satisfied by something done subsequent to the sale"unequivocally indicating the mutual intention of the parties.”

“5. Where personal property alleged to have been sold is already in the possesssion of the buyer at the time of the alleged sale, while it is not necessary for the seller to retake the property and redeliver it to the buyer, yet it is necessary that there be evidence to show the equivalent of a receipt or

acceptance, and this must be in addition to the oral evidence of the agreement of sale.”

“6. Plaintiff must show that the conduct of the buyer in dealing with the property already in his possession was inconsistent with the supposition that the former possession of the property by the buyer continued unchanged.”

Respondent’s principal objection to these instructions is that most of them state that the buyer must either accept or receive part of the thing sold, whereas, in section 1739 of the Civil Code, the language is—the buyer must accept and receive part of the thing sold. In point of fact the instructions follow the language of section 1624 of the Civil Code, as amended in 1874 (Stats. 1874 (Code Am.), p. 241) and as amended in 1878 (Stats. 1878 (Code Am.), p. 86). Subdivision 4, section 1973 of the Code of Civil Procedure, reads the same as subdivision 4, section 1624 of the Civil Code. The codifiers say, in their note to section 1973 of the Code of Civil Procedure, of the amendment of that section in 1907 (Stats. 1907, p. 563) : “The amendment consists in adding subdivisions 6 and 7 thereto, and correcting the language thereof so as to make it conform absolutely to what is in the statute of frauds, as set forth in section 1624 of the Civil Code.” Why the terms used in section 1624 of the Civil Code, and section 1973 of the Code of Civil Procedure, are in the disjunctive—-“accepts or receives”—-and in section 1739 of the Civil Code, in the conjunctive—“accepts and receives” —is not explained. Certain it is that section 1739 has not been changed since 1874 (Code Am. 1873-4, p. 243) and that the latest legislative expression is in the disjunctive, and the instructions'followed the language found in the latest enactments on the subject.

Mr. Story says: “The words ‘accept and actually receive’ are understood to mean a final and absolute appropriation by the purchaser, either of the whole article sold, or part thereof.” (Story on Sales, sec. 276.)

Mr. Justice Blackburn observes: “The question of acceptance or not is a question as to what was the intention of the buyer, as signified by his outward act. The receipt of a part of the goods is the taking possession of them. Where the seller gives to the buyer the actual control of the goods, and the buyer accepts such control, he has actually received them.

“When the goods at the time of the sale are in the possession- of the vendee, it may be difficult to prove the receipt; but if it can be shown that the vendee has done acts not consistent with the supposition that his former possession remained unchanged, these acts may be proved, and it is a question of fact for the jury whether the acts were done because the purchaser had taken to the goods as owner.” (Note to Annotated Civil Code, sec. 1739. Citing Benjamin on Sales, p. 126.)

Whether the statute is to be read as found in section 1624 of the Civil Code, and section 1973 of the Code of Civil Procedure, or as in section 1739 of the Civil Code, neither receipt nor acceptance nor both receipt and acceptance can avail unless there be a delivery of the goods with the intention to vest the right of possession in the vendee and an actual acceptance by the latter with the intention to take possession as the owner.

Defendant’s instruction number 1 correctly states the principle which should govern and instruction number 4 states what is necessary to constitute delivery and acceptance. Instructions 5 and 6 recognize the principle that while it is not necessary for the seller to retake the property and redeliver it to the buyer, it is necessary to show receipt or acceptance by the conduct of the buyer which was inconsistent with the supposition that the former possession of the property by the buyer continued unchanged.

We think it was error to refuse all of defendant’s instructions and to submit the ease to the jury without any instructions relating to the statute of frauds.

'The judgment and order are reversed.

Hart, J., and Burnett, J., concurred.

A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on May 5, 1913.