Butler v. Wright — 186 N.Y. 259

Majority

p. 259

George P. Butler, Appellant, v. Richard H. Wright, Respondent.

Headnote

Appeal—Erroneous Reversal by Appellate Division op Judgment Directing Specific Performance — Code Civ. Pro. § 1338. The question whether a party is entitled to the specific performance of an executory contract relating to personal property, or should be confined to an action at law to recover damages for a breach, rests in the sound discretion of the court; and upon an appeal from a judgment directing specific performance entered upon the report of a referee, although the Appellate Division in the exercise of its discretion may reverse upon the facts, where its order of reversal is silent as to the grounds thereof it must be assumed to have been based upon questions of law only; and if no error of law appears and there is evidence to sustain the findings of fact by the referee, the judgment must be affirmed.

Butler v. Wright, 103 App. Div. 463 , reversed.

(Argued October 15, 1906;

decided October 26, 1906.)

p. 260

Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered April 20, 1905, reversing a judgment in favor of plaintiff entered upon the report of a referee and granting a new trial.

The nature of the action and the facts, so far as material, are stated in the opinion.

Charles F. Mathewson, Benjamín S. Harmon and Edward J. Patterson for appellant.

There being evidence in support of each of the referee’s findings of fact, the same are conclusive in this court. (Ogden v. Alexander, 140 N. Y. 356 ; First Nat. Bank v. Chalmers, 144 N. Y. 432 ; Marvin v. B. I. M. Co., 55 N. Y. 538 .) Plaintiff is entitled to a specific performance of the contract. (Cushman v. T. M. J. Co., 76 N. Y. 365 ; Wister v. Lawson, 44 App. Div. 635 ; Adams v. Messinger, 147 Mass. 185 ; Jones v. Brown, 171 Mass. 318 ; N. E. T. Co. v. Abbott, 162 Mass. 148 ; Frue v. Houghton, 6 Col. 318 ; Krouse v. Woodward, 110 Cal. 638 ,; Goodwin’s Appeal, 117 Penn. St. 514 ; Reilly v. Freeman, 1 App. Div. 560 ; Clarke v. Rochester Co., 18 Barb. 350 ; Sternberger v. McGovern, 56 N. Y. 12 .)

Delos McCurdy for respondent.

The complaint does not state, and the proof does not show, a case for the specific performance of this contract. (Pomeroy on Spec. Perf. § 14; Fry on Spec. Perf. § 66 ; Story’s Eq. Juris. § 724; Bispham’s Prin. of Equity, § 368; Stanton v. Percival, 5 H. L. Cas. 257-268 ; Cowles v. Whitman, 10 Conn. 121 ; McGowan v. Remington, 12 Penn. St. 56 ; Cushman v. T. Mfg. Co., 76 N. Y. 365 ; Johnson v. Brooks, 93 N. Y. 337 ; Kennedy v. Thompson, 97 App. Div. 296 ; Bateman v. Straus, 86 App. Div. 540 ; Bedford v. A. A. Co., 51 App. Div. 538 ; Foll’s Appeal, 91 Penn. St. 434 ; Matter of Argus Co., 138 N. Y. 557 .)

This action was brought to compel the specific performance of a contract for the purchase and sale of stock. The contract upon which the action is based was to the .effect

p. 261

that the plaintiff agreed to procure and turn over to the defendant all of the capital stock of the Economy Packing Company, a Hew Jersey corporation, and that the defendant agreed to pay therefor by delivering to the plaintiff five hundred shares of the capital stock of the Wright’s Automatic Tobacco Packing Machine Company, a West Virginia corporation.

The chief question of fact litigated upon the trial was the alleged false and fraudulent representations made by the plaintiff to the defendant, by which he was induced to enter into the contract. But this issue was found by the referee in favor of the plaintiff, thus disposing of that branch of the case so far as this court is concerned. The complaint further alleged, in substance, and the referee has found as facts, that the stock of the Wright Company had never been listed on any exchange or had any quoted value or any definite market price or any certain value capable of exact ascertainment; that the defendant was the owner of at least ninety-two per cent of the stock and controlled the balance. Upon these facts the referee found that the plaintiff had no adequate remedy at law, and, therefore, ordered specific performance of the contract. To these conclusions appropriate exceptions were taken by the defendant. The Appellate Division has reversed the judgment entered upon the report of the referee and ordered a new trial. The order of reversal does not specify the ground, and, therefore, under section 1338 of the Code of Civil Procedure, we qre required to presume that the judgment was not reversed or the new trial granted upon a question of fact.

It will be observed that the agreement which the plaintiff seeks to have specifically performed was in its character executory, and that, upon its breach, the plaintiff had the right to resort to such remedy as the law afforded, and the question now arises as to whether a court of equity should entertain jurisdiction and compel specific performance, or whether he should be remitted to a court at law to recover the damages which he has sustained. The rule is that, as to eontracts per

p. 262

taining to personal property, a party should be confined to his action for damages, unless it appears that he is entitled to the thing contracted for in specie, which to him has some special value and which he cannot readily obtain in the market, or in cases where it is apparent that compensation in damages would not furnish a complete and adequate remedy. But in each case the question as to whether a court of equity will take jurisdiction and grant the relief asked for rests in the sound discretion of the court and it cannot be demanded as a matter of right. (Johnson v. Brooks, 93 N. Y. 337 ; Matter of Petition of Argus Co., 138 N. Y. 557 , 572; Williams v. Montgomery, 148 N. Y. 519 ; Bomeisler v. Forster, 154 N. Y. 229 ; Lighthouse v. Third Nat. Bank, 162 N. Y. 336 .) The question, therefore, that was presented to the Appellate Division for its determination was one calling for the exercise of its sound discretion, and this discretion was to be exercised upon a consideration of the facts and circumstances disclosed by the record in the case. That court, as we have seen, has reversed the judgment. While it cannot be said, as matter of law, that there was no evidence to sustain the findings of fact by the referee, it was authorized to reverse, in its discretion, upon a consideration of the facts, but it was not bound or authorized to do so as a question of law. The difficulty is that the court, in its order of reversal, has failed to state that the reversal is based upon the facts or in the exercise of its discretion. Under the provisions of the Code alluded to, we are compelled to assume that it was reversed upon the law only. This cannot be sustained, and it follows that the order of the Appellate Division must be reversed and judgment entered upon the report of the referee affirmed, with costs in all the courts.

Cullen, Ch. J., Vann, Willaed Baetlett and Hisoook, JJ., concur; Weeneb, J., dissents; Geay, J., absent.

Order reversed, etc.

Cases cited

Butler v. Wright 103 App. Div. 463 N.Y. App. Div. 1905-04-14 p. 259
Ogden v. Alexander 140 N. Y. 356 N.Y. 1893-12-12 p. 260
First National Bank of Sing Sing v. Chalmers 144 N. Y. 432 N.Y. 1895-01-15 p. 260
Marvin v. Brewster Iron Mining Co. 55 N. Y. 538 N.Y. 1874-01-27 p. 260
Cushman v. Thayer Manufacturing Jewelry Co. 76 N. Y. 365 N.Y. 1879-03-18 p. 260
Krouse v. Woodward 110 Cal. 638 Cal. 1895-12-31 p. 260
Reilly v. Freeman 1 App. Div. 560 N.Y. App. Div. 1896-02-21 p. 260
Clarke v. Rochester, Lockport & Niagara Falls Railroad 18 Barb. 350 N.Y. Gen. Term 1854-09-04 p. 260
Sternberger v. McGovern 56 N. Y. 12 N.Y. 1874-02-10 p. 260
Johnson v. Brooks 93 N. Y. 337 N.Y. 1883-10-02 p. 260, p. 262
Bateman v. Straus 86 App. Div. 540 N.Y. App. Div. 1903-07-24 p. 260
Cassidy v. Manning 138 N. Y. 557 N.Y. 1893-06-27 at 572 p. 260, p. 262
Williams v. Montgomery 148 N. Y. 519 N.Y. 1896-02-18 p. 262
Bomeisler v. Forster 154 N. Y. 229 N.Y. 1897-11-23 p. 262
Lighthouse v. Third National Bank 162 N. Y. 336 N.Y. 1900-03-27 p. 262