Hyperlawhypertext legal database Currie v. White 31 N.Y. Super. Ct. 166

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Currie v. White

31 N.Y. Super. Ct. 166 1 Sweeny 166 Court N.Y. Super. Ct. Decision date 1869-05-03 English

Decision Majority — Freedman, J. · Concurring — McCunn, J.

Contents

Majority

p. 166
CHARLES P. CURRIE et al., Plaintiffs and Appellants, v. CUMBERLAND G. WHITE, Defendant and Respondent.

Headnote

Where one thousand shares of stock are agreed to be sold, payable and deliverable, at the option of the seller, at a future time, the contract is executory, and the title to the shares does not vest in the purchaser, if the identical shares so sold at the time of the execution of the contract are not in the possession of the vendor, or some other specified place, nor unless they can be identified and distinguished from other shares of the same company; and, even in such case, the intention of both of the parties that the title should pass, must be clearly established.
The rule that, upon a sale, notwithstanding the postponement of payment and delivery, the right of property may become vested in the vendee, while the right of possession only continues in the vendor until the payment of the purchase-money, applies only to the sale of specific chattels. '
The rule that a vendor impliedly warrants his title to what he assumes to sell, and consequently warrants the existence of what he assumes to sell, does not necessarily apply lo contracts for the sale of stocks on time, since the passage of the statute legalizing such sales. Under such statute the vendor is not bound to own the stock sold, nor to have' possession or control of it; and if the purchaser neglect to guard his interest by express stipulation against the dilution of the stock by the company" by which it has been issued, the contract may afterward be satisfied by the delivery of watered stock.
Dividends do not arise from the stock, but are profits earned and distributed by the corporation to owners of the stock who are recognized as such on the books of the company. They may be sold or assigned without parting with the stock, and they do not pass to the purchaser under an executory contract, in the absence of an express clause to that effect. A mere provision, whereby the purchaser agrees to pay interest from the date of the contract, does not have the same effect, and is wholly insufficient to entitle the purchaser to the dividends declared while the contract remains executory.
For the same reasons, additional stock issued by a company follows the title recognized by the company, and does not pass to a purchaser under an executory contract in the absence of an express stipulation to that effect.
The fact that deposits are made by the purchaser as security for the performance of the contract on his part^ makes no difference in this respect. Even if payments are made on account, as earnest money to bind the bargain, the contract is not changed thereby; for the true legal effect of earnest money is simply to afford conclusive evidence that a bargain was actually completed, with mutual intention that it should be binding on both contracting parties; but the inquiry whether the title to the property has passed, is to be tested not by the fact that earnest was given, but by the true nature of the contract, concluded by the giving of the earnest. •
The true measure of damages for the non-performance of a contract for the sale of stocks on time, where the vendee has not paid the purchase-money in advance, is the difference between the contract price of the stock and the market price on the day of the breach, with interest from that day.
p. 167
Before Monell, McCunn, and Freedman, JJ.
[Decided May 3, 1869.]
Appeal from judgment at Special Term.
This action was tried before Mr. Justice Jones.
The nature of the action, and the facts, will fully appear from the following finding of fact and conclusions of law.
I. That the plaintiffs were copartners under the firm name of Currie, Martin & Co., and the plaintiffs and the defendant were, at the times hereinafter mentioned, stock brokers.
II. On the eighteenth day of February, 1867, the plaintiffs and the defendant entered into an agreement with each other, and executed as evidence thereof, the following written instruments :
EXHIBIT A.
New York, 18th Feb’y, 1867.
(1,000 Shares.)
We have purchased, of C. G. White, one thousand (1,000) shares of the capital stock of the Hudson River R.R., at one hundred and twenty-eight per cent., payable and deliverable seller’s option, in this year (1867),, with interest at the rate of six percent. per annum; either party having the right to call, from time to time, for deposits, to meet the fluctuations of the market.
CURRIE, MARTIN & CO.
[10 cent stamp.]
EXHIBIT B.
New York, Feb’y 18, 1867.
I have sold to Currie, Martin & Co., one thousand shares of the capital stock of the Hudson River Railroad Company, at one hundred and twenty-eight per cent., payable and deliverable
p. 168
seller’s option in this year, with interest at the rate of six per cent, per annum; either party having the right to call, from time to time, for deposits, to meet the fluctuations of the market.
C. G. WHITE.
[10 cent stamp, ]
III. Under the said agreement, the plaintiffs made six deposits as security for the performance thereof, in the United States Trust Company, as follows:
On the 23d February, 1867, the sum of $10,000
u 13 th May, « u 10,000
« 20th May, U « 5,000
u 8th June, c< 10,000
u 19 th July, « ÍÍ 10,000
u 22d July, a it 10,00’0
and called upon defendant to make six like deposits, which he did.
The Trust Company gave to plaintiffs, for each deposit made by them, a certificate in the following form:
EXHIBIT C.
United States Trust Company of New York, ) 23d February, 1867. }
($10,000.)
This is to certify, that Currie, Martin & Co. have deposited with this company ten thousand dollars, payable in current funds, on five days’ notice, to them and C. Gr. White jointly, upon the surrender of this certificate (which is assignable only upon the books of the company), with interest commencing after ten days from date, at the rate of four per cent, per annum. Ho interest to be allowed unless the same amounts to at least fifty cents.
JOHH A. STEWABT,
President.
W. Darrow, Jr.,
Secretary.
p. 169
These certificates were all alike, except as to dates and amounts, which were made to correspond with the deposit for which the particular certificate was given.
The Trust Company gave to defendant, for each deposit made by them, a certificate in the following form:
EXHIBIT D.
United States Trust Company of New York , February 23, 1867. }
($10,000.)
This is to certify that C. G. White has deposited with this company ten thousand dollars, payable in current funds, on five days’ notice, to him and Currie, Martin & Co., jointly, upon the from date, at the rate of four per cent, per annum. Ho interest to'be allowed unless, the same amounts to at least fifty cents.
JOHH A. STEWART,
W. Darrow, Jr., President.
Secretary.
These certificates were all alike, except as to dates and amounts, which were' made to correspond with the deposit for which the particular certificate was given.
To so much of this finding that the deposits therein mentioned were made as security for the performance of the contract between plaintiffs and defendant, the plaintiffs excepted, on the ground that such alleged fact was not proven.'
IV. On the 15th day of April, 1867, the Hudson River Railroad Company declared a cash dividend of four dollars per share upon the capital stock of said company, as it stood on the 18th day of February, 1.867; and on the 15th day of October, 1867, declared another cash dividend of four dollars per share ’ upon the same amount of capital stock.
p. 170
The plaintiffs requested the Court to find:
That the cash dividend last mentioned was also declared on that portion of the additional stock which was issued on the 15th of April, 1867.
The Court refused so to find, on the ground that such alleged fact was immaterial. . .
The Court further found:
V. The said dividends were paid to the holders of said stock, on said 18th day of February, and on the 15th day of October, 1867, respectively.
That the cash dividends, on that portion of the additional stock which was issued at $54 per share, vpas paid to the holders of said stock, on the 15th day of October, 1867.
The Court refused so to find, on the ground that such alleged fact was immaterial.
VI. On the 1st day of April, 1867, the Board of Directors of the said The Hudson River Railroad Company passed the following preamble and resolutions:
EXHIBIT E.
Office of the Hudson River Railroad Co.,) No. 270 West Thirtieth Street, > New York, April 1, 1867. }
To the Stockholders of the Hudson River Railroad Co.:
Take notice, that the Board of. Directors of this Company, at their meeting, held this day, passed the following preamble and resolutions:
Whereas, The stockholders of the company, at a meeting of such stockholders, called by the directors of the company, in the manner required by law, and held at the office of the com-
p. 171
party, on the 30th day of March last, did, with the concurrence of more than two thirds in amount of all its stockholders, authorize and sanction the increase of the capital stock óf the company to the amount of thirteen millions nine hundred and thirty-seven thousand and four hundred dollars; therefore,
Resolved, That the capital stock of the company be, and the same is hereby, increased to the amount of thirteen millions nine hundred and thirty-seven thousand and four hundred dollars.
Resolved, That the stock transfer books of this company be closed on the 10th day of April, instant, and that the persons or parties in whose names stock shall be standing on that day shall severally, on or before the 15th day of April, instant," be entitled to subscribe at the office of the company, No. 270 West Thirtieth street, in the City of New York, for an equal amount of additional stock; that the price of the additional stock shall be fifty dollars per share, payable as follows:
Fifteen dollars per share at the time of subscribing.
Five dollars per share on the 15th day of May next.
Five dollars per share on the 15th day of June next.
Five dollars per share on the 15th day of July next.
Five dollars per share on the 15th day of August next.
Five dollars per share on the 16th day of September next.
Ten dollars per share on the 15th day of October next.
That on the 15th day of October next, all instalments being paid, full-paid stock shall be issued.
Resolved, That where parties desire, for their own convenience, to anticipate payments, their money for any number of instalments will be received, but no interest will in any case be allowed, nor will the stock be issued until the 15th day of October next.
Resolved, That stockholders failing to subscribe on or before the 15th day of April, instant, or neglecting to pay their several
p. 172
instalments as they severally become due, will lose all right to the additional stock, and will be deemed to have abandoned their subscriptions.
Resolved, That the subscriptions may be made to the additional stock, either in person or by attorney. A scrip receipt will be given for the payments made, and this receipt must be presented at this office on the payment of any of the subsequent instalments, in order to have them entered upon it, and be surrendered to be cancelled on the issue of the additional stock.
Resolved, That where parties desire to receive full stock on the 15th day of April, instant, they may do so by paying fifty-four dollars per share at the time of making their subscriptions.
By order of the Board.
C. C. CLARKE, Treasurer. .
The books of the company were opened for subscriptions to the additional stock, under regulations established by the above resolutions of the Board of Directors.
The plaintiffs made separate requests to the Court to find the following facts respectively:
1. That in the month of April, 1867, the said Hudson River Railroad Company increased their capital stock by doubling it.
2. That, before said increase, the said capital stock was $6,968,700., and, by such increase, became $13,937,400.
3. That there was a meeting of the stockholders of the said company held for the purpose of increasing the capital stock, as aforesaid, on the 30th day of March, 1867, on the day advertised in the notice thereof, which was given on the 5th day of March, 1867.
4. That, at said meeting, there was duly represented a very large majority of the stock.
■ 5. That the notice above mentioned, Exhibit “E,” was published at its date and came to the knowledge of the defendant.
p. 173
6. That the stockholders subscribed, in the books of the company, for the whole of the additional stock; that a part of them, as prescribed in said Exhibit “ E,” subscribed at the rate of §54 a share, and a part of them at the rate of §50 a share.
7. That the books of subscription to such increased stock were open from 10th of April, 1867, to 24th of October, 1867.
8. That the bulk of the stockholders subscribed before the 15th of April, 1867, and that the last subscriptions were made on the 24th of October, 1867.
9. That the new stock was duly issued under these subscriptions, and according to the terms of the notice, Exhibit “ E.”
10. That the persons who so subscribed were persons who were stockholders on the books of the company on the 10th of April, 1867, or their legal representatives, and no others.
11. That each of them received of the new stock the same number of shares that he then held of the old stock.
Each of which requests the Court refused. '
The Court further found:
VII. On the 8th day of April, 1867, the plaintiffs sent to the defendant a notice, of which the following is a copy:
EXHIBIT F.
New York, April 8, 1867.
C. G. White, Esq.:
Dear Sir—On the 18th of February last, we purchased from you one thousand shares of Hudson River Railroad Company stock, at one hundred and twenty-eight per cent., sellers’ option, this year.
You will please take notice, that we elect to subscribe for the additional stock as provided in the resolutions of the company, at their meeting on the 1st of April, inst., and that we look to you for the same.
Very respectfully,
CURRIE, MARTIN & CO.
p. 174
VIII. But the said notice was not received, by the defendant, until between four aird five o’clock in the afternoon of the 10th day of April, 1867.
IX. That, if there was any tender or offer to perform the contract, on their part, made by the plaintiffs to the defendant, said tender or offer was. made either on the 19th day of December, 1867, or on the 31st day of December, 1867, and at no other time or times.
X. That there was no tender or offer to perform the contract, on his part, made by the defendant to the plaintiffs. That the defendant did not, either on the 19th or the 31st day of December, 1867, or at any time, deliver to the plaintiffs either the one thousand shares mentioned in the aforesaid contract, or one thousand alleged additional shares, or any part thereof; nor did the defendant pay to plaintiffs, either on the 19th or 31st day of December, 1867, any dividend which had been declared by the Hudson Diver Railroad Company, or any part thereof.
XI. That at the time of the entering into the contract aforesaid, the plaintiffs did not pay the purchase-money mentioned in said contract, or any part thereof; nor have they, at any time since entering into the contract aforesaid, paid the purchase-money therein mentioned, or any part thereof, to the defendant.
To this finding the plaintiffs excepted.
The plaintiffs, on the trial, requested the Court to find the following facts, respectively:
- 1. That on the 19th day of December, 1867, the plaintiffs offered to accept from the defendant the one thousand shares of Hudson Diver Railroad stock, in said contract mentioned.
2. And also offered to pay for the same', to the defendant, the sum stated in said bill, Exhibit “ H,” $134,421.33, and duly tendered such payment.
3. That the defendant refused to accept such offer, or tender.
4. That ’ the said defendant also refused to. deliver the said shares. .
p. 175
5. That, at the same time, the plaintiff's demanded of the defendant the dividends on the one thousand shares above mentioned.
6. That, at the same time, the plaintiffs demanded of the defendant the delivery to them of a second one thousand shares of said stock, the portion of the new issue of stock by the said company on their increase of capital in April, 1867, accruing to the owner and the holder of the one thousand shares above mentioned, with the cash dividends made thereon; and that the plaintiffs then offered to pay the defendant the price at which the said stock was issued, with interest, $56,232, and duly tendered such payment.
7. That the defendant refused to accept such tender.
8. That the defendant refused to deliver said second 1,000 shares.
9. That the defendant refused to pay or account for the said dividends, or either of them.
10. That on the 18th day of December, 1867, the defendant sent to the plaintiffs a notice, of which the following is a copy:
EXHIBIT G.
New York, December 18, 1867.
Messrs. Currie, Martin & Co.:
I will deliver you, to-morrow, 1,000 shares Hudson E. E. stock on my contract, Eeb. 18, seller this year, at $128 per share.
Respectfully,
C. G. WHITE.
11. That on the 19th December, 1867, the defendant, pursuant to his notice, went to the plaintiffs’ office, having with him 1,000 shares of said stock, and a bill properly stamped, of which the following is a copy:
p. 176
EXHIBIT H.
Currie, Martin & Co.,
To C. G. White.
February 18, 1,000 Hudson, $128............ $128,000 00
10 mo. and 1 day int., 6 p. c.... 6,421 33
Certified cheek.
$134,421 33
$13.44.
12. That the said defendant saw Mr. Martin, one of the plaintiffs, standing behind the counter. He handed Mr. Martin the bill, the copy of which is given above; Mr. Martm asked him if he would not take off the cash dividends; he replied that he would if Mr. Martin would indorse his certificates in the Trust Company.
13. That Mr. Martin, one of the plaintiffs, then handed to the defendant two papers, copies of which are as follows: _
EXHIBIT I.
New York, Dec. 19, 1867.
Mr. C. G. White :
We will accept the 1,000 shares Hudson R. R. stock, you propose to deliver us to-day, and pay you therefor the sum stated in your account, $134,421.33, and we demand of you the cash dividends thereon, 'and interest.
Respectfully,
CURRIE, MARTIN & CO.
EXHIBIT K.
NEW YORK, Dec. 19, 1867.
Mr. C. G. White:
We require you to deliver to us, under your contract, dated 18th February, 1867, a second 1,000 shares of Hudson R. R.
p. 177
stock, the portion of the new issue of stock by said Company, on their increase of capital in April, 1867, accruing to the owner and holder of the 1,000 shares mentioned in your said contract. We tender to you the price at which said new stock was issued, with interest, $56,232, and demand and claim from you the delivery of said second 1,000 shares and the cash dividends, if any, that have been made thereon.
Yours, CURRIE, MARTIN & CO.
14. That the defendant then stepped to the window, read the two papers, and remarked to Mr. Martin that he did not know the effect of the two papers, but would consult his attorney and return. He then left, taking with him the stock.
15. That the defendant did not return.
16. That the defendant did not, at that interview, produce or exhibit the certificates, nor tell the plaintiffs that he had them.
17. That Mr. Martin, one of the plaintiffs, at the last-mentioned interview, drew the plaintiffs’ check for $134,421.33.
18. And also, that said Martin, at the same time, drew the plaintiffs’ check for $56,232.
19. That the said checks were ready to be delivered to the defendant before he so left plaintiffs’ office.
20. That the plaintiffs handed these checks, as soon as they were drawn, to their clerk to go and get them certified.
21. That the president of the bank on which such checks were drawn had previously agreed to certify them.
22. That the plaintiffs had not drawn the checks, before defendant came to their office, on the said 19th day of December, because they did not know precisely how much defendant wanted them to pay, or whether defendant would deduct the cash dividends.
23. That it was the usage and custom 'of said business, in delivering stock, for the purchaser to receive the bill, and draw the check immediately, send it to the bank and get it certified, and for the seller to wait to receive it.
24. That the defendant did not ask for the checks, or either of them.
p. 178
25. That the checks were not tendered at the time to defendant, merely because defendant went away, saying he would return. And that he did not return.
26. That on the 31st day of December, 1867, the plaintiffs offered to accept from the defendant the 1,000 shares of Hudson River Railroad stock in said contract mentioned.
27. And also offered to pay for the same to the defendant the sum stated in said bill (Exhibit H), $134,321.33, and duly tendered such payment.
28. That the defendant refused to accept such offer or tender.
29. That the said defendant also refused to deliver the said shares.
30. That, at the same time, the plaintiffs demanded of the defendant the dividends on the 1,000 shares above mentioned. That, ■at the time, the plaintiffs demanded of the defendant the delivery to them of a second 1,000 shares of said stock, the .portion of the new issue of stock by the said company, on their increase of capital in April, 1867, accruing to the owner and holder of the 1,000 shares, first above mentioned, with the cash dividends made thereon; and that the plaintiffs then offered to pay to the defendant the price at which the said stocks were issued, with interest, $56,232, and duly tendered such payment.
31. That the defendant refused to accept such tender.
32. That the defendant refused to deliver said second 1,000 shares.
33. That the defendant refused to pay or account for the said dividends, or either of them.
34. That on 31st December, 1867, at about half-past one o’clock, the plaintiffs sent by their messenger to defendant, a letter, as follows:
EXHIBIT L.
Mr. C. Gr. White:
Sir—Our checks for $134,421.33 and $56,232 have been ready for you since they were tendered you, with our two notices
p. 179
relative to our Hudson River contract, on the 19th inst.; you then said you were not ready to give an answer, hut would see about it.
We are ready to do what we offered and tendered in our notices, and renew our notices, but suppose your silence is equivalent to your refusal to comply with them.
Yours, &c.,
CURRIE, MARTIN & Co.
New Yoke, December 31,1867.
And two checks, one for $134,421.33, the other for $56,232.
35. That these checks were the same that were drawn on the said 19th December.
36. That the plaintiffs had since kept the said checks in their possession.
37. That when the plaintiffs’ messenger went to defendant’s office, on the 31st December, he tendered him these two checks with the letter (Exhibit L).
38. That said messenger handed the letter to the defendant and said, “ Here'are the checks.”
39. That the defendant took and looked at the checks.
40. That said defendant then said in reply, “ I will see,” and paid no further attention to the matter.
41. That the said messenger then observed to the defendant, that he would get the checks certified if he required it.
Which requests the Court refused, and the plaintiffs excepted.
The Court further found:
XII. That on the said 19th day of December, 1867, the market value of the capital stock of the said Hudson River Railroad Company was $132§ per share. . On the 31st day of December, 1867, the market value thereof was $131|- per share; and on the 8th day of February, 1868, after which day the trial of this action was had, the market value thereof was $149 per share.
p. 180
The Court found the following conclusions of law:
I. That the plaintiffs are not entitled to recover from the defendant the said dividends declared on the said one thousand shares of stock mentioned in the contract.
To this finding and the whole thereof, plaintiffs afterward, by exceptions duly filed, excepted.
II. That the plaintiffs are not entitled to recover from the defendant the difference between the market value of one thousand of the alleged additional shares, on the 8th day of February, 1868, and the sum required by the said The Hudson River Railroad Company, to be paid for such alleged additional shares.
To this finding, and the whole thereof, plaintiffs afterward, by exceptions duly filed, excepted.
III. That the plaintiffs are not entitled to recover the difference between the market value of the one thousand shares, mentioned in the said contract, on the 8th day of February, 1868, and the contract price, to wit, one hundred and twenty-eight dollars per share.
To this finding, and the whole thereof, plaintiffs afterward, by exceptions duly filed, excepted
IV. That the defendant is not entitled to recover from the plaintiffs the difference between the contract price of the one thousand shares, mentioned in the contract, and the market value of said shares on the 19th day of December, 1867.
V. That the defendant is entitled to judgment, dismissing the plaintiffs’ complaint, and directing the plaintiffs to duly indorse the said six certificates of deposit issued to the defendant by the said The United States Trust Company; and further irecting the defendant to indorse the six certificates issued,to the plaintiffs by the said The United States Trust Company, so that the plaintiffs and the defendant may draw out the said
p. 181
deposits by them respectively made with said Trust Company as aforesaid, with the interest that has accrued or may accrue thereon, before such withdrawal.
VI. That the defendant recover nothing from the plaintiffs on his counter-claim.
VII. That neither party have the costs of the action as against the other.
The plaintiffs, on the trial, separately requested the Court to find each of the following conclusions of law:
First. That the plaintiffs are entitled to judgment against the defendant, for the market value of the first-mentioned one thousand shares, after deducting $128 per share, the contract price, with the interest thereon from the date of contract, at the rate of six per cent, per annum.
The Court refused so to find, to which the plaintiffs duly excepted.
Second. That the plaintiffs are entitled to judgments against the defendant for $8,000, dividends on said one thousand shares.
The Court refused. so to find, to which the plaintiffs duly excepted.
Third. That the plaintiffs are entitled to judgment against the defendant for the value of one thousand shares, being of such new issue, at their market value, less the price at which the same was so issued.
Fourth. That the plaintiffs are entitled to judgment against the defendant for $1,000, the dividend made and paid on said second one thousand shares, being of such new issue.
The following opinion was rendered at Special Term :
p. 182
“ Jones, J. The plaintiff’s claim:
“1st. The dividends declared on the 1,000 shares, and interest. 2d. The difference between the value of 1,000 of the alleged additional shares on February 8, 1868, and the sum required by the company to be paid therefor, and interest. 3d. The difference between the value of the 1,000 shares (mentioned in the contract) on the 8th of February, 1868, and the contract price and interest.
“ The defendant contests all these claims, and himself claims the difference between the contract price of the 1,000 shares mentioned in the contract, and their marketable value on December 19,1867, with interest thereon.
“ As to the plaintiff’s claims :
“ The first two evidently depend on whether the contract was executed or executory; that is, whether it operated as an actual and present sale, or only as an agreement to sell, to be carried into effect on a future day. ,
“Dividends declared and additional shares issued, when declared and issued, become the property of those who own the stock in respect whereof they are declared and issued at the time of said issue and declaration. They are not incorporated in, nor do they become a part of, that stock in respect whereof they are issued, but are mere profits arising therefrom to the then owners thereof.
“ One, by making a contract whereby he agrees to sell, a year. after its date, property real or personal, does not thereby deprive himself of any profit which may have accrued therefrom, or advantage which may arise from its possession or use during that year; nor do such profits and advantages pass to the purchaser in the absence of an express contract that they shall pass.
“ If, then, the contract in question is executory, and remained unexecuted until after the dividends were declared and the additional stock was issued, the plaintiffs are not entitled to them,
“ It -is often a matter of great difficulty to determine whether a contract is executed or executory; but, in this case, whatever doubts I may have had are set at rest by the case of Kelly v.
p. 183
Upton, decided by the General Term of this Court ( 5 Duer, 336 ), which is a direct authority in point, and according to which the contract in question is executory.
“ Nothing was attempted to' be -done to execute it until December 19, 1867, long after the dividends were declared and the additional stock issued.
“ It results that the first two claims of plaintiffs must be disallowed.
“ The third claim is founded on an erroneous application of the rule relative to the measure of damages.
“ This defendant, if liable at all, is so for the simple breach of a contract to deliver certain stock, the vendee not having paid to him the purchase-money in advance. In such case the measure of damage is the difference between the contract price of the articles agreed to be sold and their market price on the day of breach.
“ This difference the plaintiffs would be entitled to recover. It therefore becomes necessary to ascertain whether the defendant broke his contract; if so, when; and the market value of the stock on the day of the breach.
“ If there has been any breach by defendant, it occurred either on the 19th or 31st of December, 1867. As the market value of the stock on one of those days was less than the contract price, plaintiffs, even if there was a breach by defendant, suffered no actual damage. It is therefore unnecessary in this view to consider whether there was such breach.
“ As to the defendant’s claim. This rests on the defendant’s allegation that there was a breach of the contract on plaintiffs’ part on the 19th of December. To establish such breach, he insists that he, on that day, tendered, and was ready and offered to deliver the stock, but plaintiffs neglected to receive it and •pay for it. Assuming that his handing up Exhibit H—the stock being in his possession—was a sufficient tender, and a sufficient indication to plaintiffs of his readiness and ability then and there to fulfil his contract, yet the effect of it was done away by his subsequent acts at the game interviews; for, after plaintiffs
p. 184
handed him Exhibits I and K, he clearly withdrew his previous tender, and declared himself not ready then to fulfil his contract by saying that he desired time to consult his lawyer, and would return shortly, and thereupon departing with the stock in his possession.
“ The result arrived at is, that neither party has a claim against the other for damages arising out of a breach of the contract in question, and that each party is entitled to a return of the deposit made by him, with the interest thereon.
" The case is one in which each party should pay his own costs.”
Judgment was, on the 24th day of October, 1868, entered in conformity with the findings and opinion of said Justice; and from so much of the judgment as directs the plaintiffs to indorse the six certificates of deposit issued to the defendant, .and to do other things in respect thereto, and as adjudges that the plaintiffs recover nothing from the defendant, the plaintiffs appealed to the General Term.
Mr. William R. Martin for appellants.
The plaintiffs’ main proposition in this case is that the provision in this contract, that the purchaser should pay interest on the purchase-money from the date of the contract, is its controlling feature in respect to its interpretation, and its cardinal point in determining the rights of the parties in respect to the matters in controversy.
In these respects this provision signifies that, since the purchaser paid interest'to the vendor from the date of the contract, the increase received by the vendor, the dividends and additional stock, must, with the stock, also be delivered to the purchaser, in performance of the contract.
If not, then, in the case of a watered stock, a sale of stock before the watering would be satisfied by the delivery of the same number of watered shares. This would be an obvious injustice.
The agreement that the purchaser should pay interest from the date of the contract was an agreement that the vendor was to be
p. 185
regarded as owning and having the 1,000 shares of the stock at the time of the contract, and at all times thereafter until the date of the contract; that the purchaser was to receive from the vendor the 1,000 shares, as they stood at that date, with all their accretions.
The contract contemplated that there was something existing to he sold and bought; not something contingent, as crops, when they matured, or goods, if they should arrive.
The Company had at that time outstanding a precise number (69,681) of shares, each in the name of and actually owned and held by some person. Some 1,000 of these shares then existing and in being were sold by the defendant, and were to be delivered. The subject of the contract was not shares that might thereafter be created by that company, or shares of some other company that might thereafter be formed under the same name. To this extent the subject of the contract was specific.
There is nothing ambiguous or imperfect in the expression o± the contract, and its interpretation is the obvious and literal one.
“ When the terms of the contract expressly postpone delivery or payment, or both, to a future day, here also the sale is valid, and no legal presumption obstructs the intention of the parties; but the property in the chattel sold passes immediately ” (1 Parson’s Contracts, 519 ; see Chitty’s Contracts, 410).
By the terms of the contract, the existence of the subject of the sale, and the vendor’s title to it at the time of the sale, are warranted. The contract is not to be satisfied, therefore, by the delivery of something that did not exist at the time of the sale, but by the delivery of the thing sold as it existed at the date of the contract, and its accretions with it.
As to the purchasers: The agreement.to pay interest was an agreement that they were to have the purchase-money, at all times after the date of the contract, in readiness to pay over on the vendor’s demand, whenever he should think fit to deliver. His option was only in reference to the time of the delivery. He had no privilege never to deliver. The agreement to pay interest implies that the principal ,is due—that the obligation of
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the purchaser to pay the purchase-mon'ey has taken effect. It follows that the contract, whenever completed, is to be completed as of the day of its date. As between vendor and purchaser, the delay is not in any sense attributable to the vendor as a default; his performance is to take effect from the date of the contract. The condition as to the time of delivery rests upon other grounds; equitably, the contract is performed as of its date. The purchasers are entitled, therefore, on the delivery, to receive from the vendor precisely what they would have received if the delivery had been made on the day of the date of the contract. Their rights to the subject of the'sale relate back, and are the same as if the payment and delivery had been made at that date—the thing delivered must be as it existed at that date. All intermediate increments accrue to the purchaser.
As to the vendor: His obligations are reciprocal; he must perform in accordance with the purchaser’s rights. He must deliver what the purchaser is entitled to receive. The right to collect interest on a contract rests upon a default of the debtor, upon a construction of the contract that the money is due to or belongs to the creditor, that the debtor is using money belonging to the creditor (3 Parson’s Contracts, pp. 102-3 ; 2 Story on Contracts, secs. 1023-1028).
In Rensselaer Factory v. Reid, 5 Cowen, 587, it was held that he who makes advances for the use of another, under an implied authority, is entitled to interest. The history of the law of interest, and the principles on which it is allowed, are fully considered by Golden, Senator, p. 596, and Spencer, Senator, p. 608. Purchasers who had taken possession and received the rents -and profits were required to pay interest on the purchase-money in Cleveland v. Burrill, 25 Barb., 538 ; Viele v. Troy & Boston R. Co., 21 Barb., 396 .
The express agreement, therefore, in this contract, to pay interest from the date of the contract, indicates, as its reason and needs for its support, the construction that the purchase-money belongs or is due to the vendor. To support this construction, the vendor must be held to the reciprocal obligation of performing as of that
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date—of delivering the subject of the sale as it 'then existed, with its intermediate increments.
The purchasers’ rights attach to the subject of the sale as it existed at the date of the contract.
That one of the terms of the contract was left floating, to be fixed thereafter by one of the parties, does not affect the validity or operation of the contract, or the rights or obligations of the parties in other respects than that single one, when the delivery should be made. "When this option should be subsequently exercised and the day of delivery fixed, or the full optional term should elapse, the contract was to become fixed ab initio in all respects. The provision in the contract giving the vendor the right, within a definite "period, to fix the time at which he would make the delivery, was a provision favorable to the vendor, and for his convenience. Whether this definite period be a day or a year, does not affect the rights and obligations of the parties as above stated. The vendor must therefore be regarded as owning and holding the 1,000 shares at the date of the contract.
It has been proved that, in April, 1867, new stock was issued . to all the holders of the old stock, each holder receiving the number of shares equal to that he then held, including, of course, the holder of the 1,000 shares, which are the subject of this sale— the increment attached to each and every share of stock at that time existing. The vendor, therefore, actually received the 1,000 shares of additional stock.
The dividends, in April and October, were made and paid upon each share of the stock existing at those dates, respectively : in April, upon the original stock of 69,687 shares; and in October, npon the original stock and that portion of the increased capital which was issued at $54 per share on the 15th April, 1867.
The plaintiffs by their contract purchased, in round numbers, one seventieth of the stock of the company, as it stood at the date of the contract; that is, one undivided seventieth of its property and franchise. The defendant proposed to deliver, in performance of the contract, one one-hundred-and-fortieth of the
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stock and of the property and franchise. That is not what was sold.
If the new stock had been paid for to the company at 128, the price of the old stock in this contract, there might be color for saying that the property and franchise had increased as the proportion had diminished; that is, that one seventieth of the property and franchise, before the increase, was equal in money value to one one-hundred-and-fortieth of the property and franchise, thus doubled by the increase. But that was not the case. The company received but 50 for the new stock. Upon no ground can it be asserted that the thing proposed to be delivered was the thing sold.
Shares of the stock of a corporation are an undivided share of and interest in the corporate rights and property. In the present case, the property of this corporation consisted of its real and personal estate, and a profitable business, of which it solely had the control and benefit: into that its capital had gone. This property, by the application of energy and skill, Avas constantly increasing, and constantly liable, by fire, accident, opposition, &c., to depreciation.
There is much discussion in the English courts as to these dividends and bonuses, but mainly on the question whether they shall be regarded as accretions to the capital, so as to go to the reversioner, or as dividends out of the profits, so as to go to the life tenant; yet they are regarded uniformly and termed as accretions incidental to the property; and it is held that there is no distinction between dividends in stock or in money (Paris v. Paris, 10 Vesey, 190; Brander v. Brander, 4 Vesey, 800; In re Hodgens, 11 Ir. Eq. R., 99 ; French v. Craig, 8 Ir. Ch. R., 142).
The purchasers are entitled to the accretions, on the ground that the vendor should not receive both interest on the purchase-money and also the accretions on the stock; but that Avhile interest accrues to the vendors on the purchase-money, when it is not yet due and payable, so the vendor must deliver to the purchaser the intermediate increments on the stock; and for the further reason, that unless this is so, the purchaser does not re
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ceive, on the delivery by the vendor, the stock he purchased, but a nominal equivalent in a watered stock.
With respect to the first 1,000 shares mentioned in the contract, upon the principles already argued, the plaintiffs were entitled to the $8,000 cash dividends. The measure of the damages to be recovered by the plaintiffs is the highest price at which the stock sold in the market, between the time of the breach and the time of the trial. That price was 149. There has been no unreasonable delay in prosecuting the action.
The rule that the highest market price before the trial could be recovered where the purchaser had paid his money, has been established in this State (Scott v. Rogers, 31 N. Y., 1864 , p. 684).
The plaintiffs’ tender was sufficient, and the defendant did break his contract. The tender was not conditional. It was free from that objection by its express language. The plaintiffs were ready to accept and perform so much as the defendant offered, with notice to him of their other and further claims and offers in support thereof.
In respect to the second 1,000 shares, he has at all times refused to deliver them, nor does he claim that he would have done otherwise under any circumstances. In respect to the first 1,000 shares, his refusal was distinct and reiterated. This was a dispensation from any further effort to make a tender. There was, therefore, a breach of his contract by the defendant, and actual damage was suffered by the plaintiffs in the non-delivery of the first 1,000 shares mentioned in the contract, for which damage the plaintiffs should have had judgment.
The facts which the plaintiffs requested the Court to find were material and were established, and should have been found as facts.
Mr. William C. Barrett for respondent.
Independently of the legal objections, hereafter stated, to the plaintiffs’ right to the increased stock, if any such were shown to exist, there is not any proof that such additional stock, either in number of shares or amount, was ever issued by the Hudson
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River Railroad Company. There is no evidence that “ new stock was issued to all the holders of the old stock, each holder receiving the number of shares equal to that he then held.” The subject-matter of the contract was 1,000 shares of the capital stock of the Hudson River Railroad Company, to be paid for by the plaintiffs, and delivered to them by the defendant, at any particular period between the 18tli February and the 31st December, 1867, which the defendant might desire. The payment by the plaintiffs, and the delivery by the defendant, were to be dependent, simultaneous acts. The contract between the parties was executory, and not executed. An executed contract of sale is one in which the whole matter of sale is concluded at once by an immediate transfer of the subject by the one party, and the payment of the price by the other. It is a sale where nothing remains to be'done by either party. Where the contract of sale is executory and for a thing which is not in the possession of the vendor at the time of sale, but is to be manufactured, or made, or purchased by the seller, no property therein passes to the vendee until the thing is not only purchased and ready, but is actually delivered, or at least set aside and appropriated to him and accepted by him (Parsons, vol. i, 438-9; Goode v. Langley, 7 Barn. & Cres., 26; 2 Kent, 468, foot-note; Clarke v. Spence, 4 Ad. & El., 448; Bell on Sales, p. 12; Story on Sales, sec. 315; Parsons on Con., vol. i, p. 441).
Where something is to be done by the seller to ascertain the identity, quantity of the thing sold, or to put' it in the condition which the terms of the contract require, the title does not pass. The shares in question were not defined and designated so as to be distinguished from other shares of the Company (2 Kent, 496; Hanson v. Meyer, 6 East, 614; Simmons v. Swift, 5 B. & C., 857; Joyce v. Adams, 4 Seld., 291).
If the contract were executory and not executed, it is conclusive, unless the contract contemplated the delivery of 1,000 shares of the stock of the company existing at the time the contract was made, and that if even on the 31st December, 1867, White should deliver 1,000 of such old shares, then the plaintiffs
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could have taken and paid for them, and gone to the Company and procured the new shares. ' But even if it were an executed contract, that is, if, as between White and Currie, Martin & Co., there was a transfer of the right of property in the plaintiffs, while White merely retained the possession until the exercise of his option and the payment of the price, still, Currie, Martin & Co. are not entitled to the increase. The particular 1,000 shares not being designated nor in any way set apart or marked or identified to be separated from the mass, the bailment, if any existed, was a “mutuum ” and the absolute property in the bailee, and he was not bound to restore the same shares, but to answer for them in Idnd, nature, quality, and value (Story on Bt., sec. 283, 47; Norton v. Woodruff, 2 Com., 153; 2 Kent, 589; Smith v. Clark, 21 Wen., 84; Hurd v. West, 7 Cow., 752 , 756).
The absolute property then in the shares, even in case the sale were to be treated as consummated, was in the bailee, White, and he was only bound to answer in kind for any 1,000 shares of ■the stock of the Company, while the right of the increased shares appertained .only to those who had their particular shares actually transferred prior to the close of the books on April 10th.
Although ordinarily an offer to perform with “ readiness and willingness” (accompanied by a demand on the opposite party to perform) is sufficient, still where the opposite party, in place of refusing, or equivocating, or vacillating, distinctly accedes to the demand, and in fact himself insists upon performance, then, as both parties have offered to perform and are both ready and willing, neither party can be put in default without bringing the matter to a crisis by an actual tender on the one side or the other. In other words:
Assuming that both parties offered to perform, and that both were “ ready and loilling,” then neither is in default in consequence. To put a party, under such circumstances, in default, it is necessary to test his good faith in offering, to test his “ readiness and willingness,” by the only active test, which entitles either party to the actual production of the article or thing contracted for, and to its delivery, to wit, a tender, and a demand
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thereupon of a like tender by the opposite party. Neither party refused to perform; both have insisted upon performance according to then* respective understanding of their contract; both were ready and willing. But neither did the thing which, under those circumstances, was essential to make a default, and consequently if such reasoning be adopted, both are remitted to their deposits in the Trust Company, and the contract has'ceased to exist (Weld v. Hadley, 1 N. Hamp., 295 ; Des Arts v. Leggett, 16 N. Y., 590 ).
It is settled that when the delivery of goods sold and the payment of the price, whether in cash or notes, are to be contemporaneous acts, the property, until such delivery and payment, remains in the seller (Bussey v. Barnett, 9 M. & W., 312; Bishop v. Shillito, 2 B. & Ald., 329, n.; Palmer v. Hand., 13 John., 434 ; Lupin v. Marie, 6 Wen., 77; Laidler v. Burlinson, 2 M. & W., 602).
The requests by plaintiffs to find certain facts were properly rejectéd by the Court. The first three were not only immaterial, but were unproved. The remaining eight were wholly immaterial.

By the Court:

The plaintiffs claim that they are entitled to recover against the defendant:

I. The $8,000 cash dividends declared upon the first 1,000 shares mentioned and referred to in the contract of February 18, 1867, with interest.

II. The value of $1,000 additional shares of an alleged later issue, at the price of 149, that being the alleged market value of the same on February 8, 1868, less the price of 54, at which they were issued by the company, with interest, &c.

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IV. The value of the first 1,000 shares of Hudson River Railroad stock, mentioned in the contract of February 18, 1867. at the price of 149, that being the alleged market value of the same on the 8th day of February, 1868, after deducting therefrom the contract price of 128, with interest at the rate of six per cent, added thereto, from the date of the contract.

Upon a mere inspection of the contract, it does not appear whether the defendant had or had not at the time the possession of the 1,000 shares therein referred to; and the first question which presents itself is as to the effect of the said contract. Does it constitute an actual bargain and sale, whereby the 1,000 shares, the subject of the said contract, became the property of the plaintiffs the moment the contract was concluded, and without regard to the fact that the defendant had the option to deliver the shares at any time dining the year he saw fit; or is it a mere executory agreement, an agreement to sell, to be carried into effect at some time during the course of that year, according to the pleasure of the defendant ?

There is no doubt—to use the language of Judge Comstock in Decker v. Furniss (4 Kern., 612)—that the phrases “ we have purchased ” and “ I have sold,” standing at the head of the contract, import an executed sale; but such phrases are quite inconclusive, and are often made to yield to other terms of the contract evincing a different design, and they are qualified in this case by the words: “ payable and deliverable, sellers’ option, in this year (1867), with interest at the rate of six per cent, per annum; either party having the right to call, from time to time, for deposits to meet the fluctuations of the market.”

The defendant’s engagement to deliver was not unconditional, but dependent upon ‘the exercise of his option; he had a right to perform that part of the contract at any time between the date thereof and the 31st day of December, 1867; he was in no way chargeable for the non-delivery until after the expiration of the last-named day, and a tender on the part.of the plaintiffs after that day; and before the exercise of the option by the defendant, neither of the parties could be in default before said

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31st day of December, 1867 (Russell v. Nicoll, 3 Wend., 113 ; Outwater v. Dodge, 7 Cow., 85 ; Ward v. Shaw, 7 Wend., 405 ; McDonald v. Hewitt, 15 Johns. R., 349).

The obligation of the vendor in this ease to deliver, and that of the buyers to pay, are concurrent conditions in the nature of mutual conditions precedent, and neither party can enforce the contract against the other without showing performance, or offer to perform his own promise, according to the conditions of the contract; and as the vendor had the option to deliver at any time, according to his pleasure, between the day of the contract and the 31st day of December, 1867, and the buyers could not be called upon to pay before delivery, it cannot be considered as an executed contract of sale.

It is true, that in some cases, notwithstanding the postponement of payment and delivery, it has been held that the right of property became vested in the vendee, while the right of possession continued in the vendor until the payment of the purchase-money ; but these cases have reference only to the sale of specific personal property, and if the plaintiff intends to claim title to the 1,000 shares upon the principles decided by these cases, they should have shown either that- the identical 1,000 shares were, at the time of the execution of the contract, in the possession of the defendant, or some other specified place; that they were defined and designated so as to be capable of being identified and distinguished from other shares of the same company, and that the contract referred to this particular lot.

It does not appear from the contract that reference was had or made to any specific or particular lot of shares, nor does the evidence show that such was the intention of the parties, and therefore the general rule applies, that if goods be sold while mingled with others, by number or otherwise, the sale is incomplete, and the title continues with the seller until the bargained property be separated or identified (2 Kent Com., 496). The reason is, in such case, that the sale cannot be applied to any article until it is clearly designated, and its identity thus ascertained. Thus, if an entire flock of sheep is sold at so much the

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head, and it is agreed that they shall be counted after the sale in order to determine the entire price of the whole, the sale is valid and complete. But if a given number out of the whole are sold, no title is acquired by the purchaser until they are separated, and their identity thus ascertained and determined. The distinction in all these cases does not depend so much upon what is to be done, as upon the object which is to be effected by it. If that object is specification, the property is not changed; but if it is merely to ascertain the total value at designated rates, the change of title is effected. Thus, where there is a bargain for a' certain quantity, ex a greater quantity, and there is a power of selection in the vendor to deliver which he thinks fit, then the right to the property does not pass to the vendee until the vendor has made his selection, and trover is not maintainable until that is done. If I agree to deliver a certain quantity of oil, as 10 out of 18 tons, no one can say which part of the whole quantity I have agreed to deliver until a selection is made. There is no individuality until it has been divided (Gillette v. Hill, 2 C. &M., 530).

The case of Kimberly v. Patchin ( 19 N. Y., 330 ) does not establish a contrary doctrine, as claimed by plaintiff, but on examination it will be seen that it is in perfect harmony with the general rulé referred to by me. In this case the parties clearly expressed their intention that the title should pass. The owner of the wheat, lying in mass in his warehouse, sold 6,000 bushels thereof for a specified price, executed to the vendee a receipt, acknowledging himself to hold the wheat subject to the puiv chaser’s order, received drafts on account of the purchase-money, and fully arranged for the payment of the balance, and otherwise fully completed the sale, so far as necessary. Under these circumstances the Court held, among other things, that where the quantity and general mass from which it is to be taken are specified, the subject of the contract is thus ascertained, and it becomes a possible result for the title to pass, if the sale is compíete in all its other circumstances, &c. And the title may also pass, where goods are delivered by the vendor to the parchasen

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although no fixed price is agreed upon. Thus, in Joyce v. Swann (17 Com. B., N. S., 84, 1864), cited by plaintiffs, the question was whether or not one McCaster had an insurable interest in a certain quantity of guano, at the time of effecting tire policy, and the judge charged the jury to the effect that, if the guano was put on board the vessel by the vendors, with the intention of passing the property to McCaster, they must find for the plaintiff ; and that it was not a necessary condition to the passing óf the property that the price should be definitely agreed on. The jury rendered a verdict for the plaintiff.

Williams, J., who delivered one of the opinions in banco, approves the verdict on all the facts in the case, and says that “ where, from all the facts in the case, it may fairly be inferred that it was the intention of the seller to pass the property in the goods shipped to order, the mere fact of the bill of'lading being taken in the name of the seller will not prevent its passing; but if the bill of lading was retained to hold - dominion over the goods, that then there was no intention to pass the property; but if the whole of the circumstances lead to the conclusion that that was not the object, the form of the bill of lading has no influence on the result. In this case the bill of lading was in the name of the seller.” *

Such cases, however, are exceptions to the general rule, and they merely decide that the title may pass where it is the clear and positive intention of both contracting parties that it shall pass. But the old rule which held that upon a sale of a specific chattel, notwithstanding the postponement of payment and delivery, the right of property may in some cases become vested in the vendee, while the right of possession only continues in the vendor until the payment of the purchase-money, has not only been modified in this State in all cases where payment and delivery are to be in futuro, and are to be simultaneous and concurrent acts (Benedict v. Field, 16 N. Y., 595 -7; Baker v. Bourcicoult, 1 Daly, 24 ; Russell v. Minor, 22 Wend., 664 -671; Chapman v. Lathrop, 6 Cow., 110 ); but also in cases where the contract shows that there is no intention to pass the property

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until something further is done by the seller. In such cases it has been held that the sale is not perfected and the property does not pass until the thing be done (Ward v. Shaw, 7 Wend., 404 ; Chapman v. Kent, 3 Duer, 232 ).

In the case under consideration the defendant had until the 31st day of December, 1867, to exercise his option. The plaintiffs and the defendant are stock brokers; they dealt with each other as such; it may be assumed that the plaintiffs were well acquainted with the rules and custom prevailing among brokers as to the sale of stocks, and with the fact that it was not necessary for the defendant under his contract to have the 1.000 shares of stock actually on hand. Formerly such a contract was a mere wager, and illegal by statute, whenever the seller did not possess the stocks at the time (R. S., art. 2, tit. 19, ch. 20, secs. 6, 7, and 8); but this statute was repealed by an act entitled “An act to legalize the sale of stocks on time ” (4 Edm. Statutes at Large, p. 110), and in this repealing statute is an express provision that' thereafter no contract for the purchase, sale, &c., of stocks shall be void, because the vendor at the time of making the contract is not the owner- of the shares. This statute, therefore, legalizes contracts for the sale of stocks, on time, and which the vendor does not own. The plaintiffs undoubtedly were familiar with it, and it cannot therefore be said, in the light of this statute and the contract palpably drawn under it, and also in the light of the object of the contract, that the defendant contracted for the delivery of a certain specific lot of 1.000 shares, or warranted the present possession by him of any such lot on the 18th day of February, 1867.

For the purpose of carrying out his contract as made, it was not necessary for the defendant to be a stockholder on the books of the company at any time; it was sufficient if on the 31st day of December, 1867,-he held a certificate representing 1,000 shares, with the necessary power of attorney to transfer the seme, and if he held ^uch certificate at any time prior to said date, he had a right to use it, and the number of shares represented thereby in his business, in any manner" he saw fit, until that day,

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The rule, therefore, that a vendor impliedly warrants his title to what he assumes to sell, and consequently warrants the existence of what he assumes to sell, does not, since the passage of the statute referred to, necessarily apply any more to contracts for the sale of stocks on time, and’ for this reason it is unnecessary to notice or examine the numerous authorities cited by plaintiffs’ counsel in support of-the application of the rule referred to the contract in this case. Under the said statute a party may make a contract for the purchase of stocks on time with a person who neither owns the stock nor has the possession or control of it; but if the purchaser fail to guard his own interests by express stipulations against the dilution of the stock b„y the company by which it has been issued, it seems to me the contract may afterward be satisfied by the delivery of stock as it exists on the day the contract is to be performed; and unless the purchaser insists in his contract upon all dividends, profits, and advantages which may be declared upon or spring from the stock during the running of the contract, he should not, in my judgment, be afterward permitted to make claim to them. A little prudence exercised at the proper time will enable him to secure all his contemplated rights in this respect.

Again, as the defendant was under no obligation to be a stockholder on the books of the company, nor to have a certificate for 1,000 shares ready for delivery prior to the 31st day of December, 1867, how can it be said that it was his duty on or about the 10th day of April, 1867, to subscribe for 1,000 additional shares, which he could do in no other way except by becoming a stockholder upon the books of the company before that time, and to furnish the necessary funds to the amount of upward of fifty thousand dollars to meet his subscription ? Of what valué would the option he expressly reserved to himself, be in such case?

' All these circumstances tend to show that the contracting parties at the time of the execution of the contract could not have contemplated that the title to the shares should pass.

It has been conceded by plaintiffs’ counsel that the justice

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who tried this cause was correct in holding that dividends declared and additional shares issued, when declared and issued, become the property of those who own the stock, in respect whereof they are declared and issued at the time of said issue and declaration, and that they are not incorporated in, nor do they become a part of, that stock in respect whereof they are issued, but are mere profits arising therefrom to the then owners thereof. There can be no doubt of the correctness of this proposition generally, although, strictly speaking, the profits do not arise from the stock, but are earned by the corporation, and are distributed to such owners as are recognized as such on the books of the company.

In Spear v. Hart (3 Robertson, 420) .the dividend had been declared before fhe sale, but was payable after the day fixed for the delivery of the stock, and the court held, “ that the dividend belonged to the defendant and did not pass to the plaintiff under the contract. Dividends are not an incident to stock, so as to pass with the stock. Unlike, interest, they are not earned by the money represented in the stock, but by the corporation ; and are divided among the shareholders, and may be sold or assigned without parting with the stock.”

Kelly v. Upton ( 5 Duer, 336 ) is a case presenting the same questions as the case now under consideration, with the difference that in that case the option was on the part of the buyer. The court held that the contract was executory; that where the delivery of the thing sold and the payment of the price are to be simultaneous acts, the title, until delivery or payment, remains in the seller.

The two cases last referred to seem fatal to the first three claims of the plaintiffs. They expressly decide that the contract in this case must be considered as an executory agreement, passing no title to the plaintiffs^ however different their understanding of its effect may have been, and that the dividends and accretions as a general rule follow the title.

The plaintiffs, however, claim that, although this may be so, the provision in the contract in this action that the purchasers

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should pay interest,on the contract price from the date of the contract, is such a peculiar and controlling feature in the said contract in respect to its interpretation, as to take it out of the operation of the general rule; that in consequence thereof it should he so interpreted as to hold the vendor liable to deliver the profits with the shares sold. The contract in Kelly v. Upton ( 5 Duer, 336 ) contained the same feature. The learned counsel for the plaintiffs contended for the correctness of this theory so strenuously and presistently that, in view of the importance of this case, I made a complete and thorough examination and classification of the numerous authorities cited by the plaintiffs promiscuously upon this point. They establish the following principles:

I. In case of non-performance of a contract 'at the time fixed for the completion of the same, without wilful fault on either side, the purchaser as a general rule is entitled to the profits of the estate from the time fixed upon for completing the contract, whether he does or does not take possession of the estate; and, as from that time the money belongs to the vendor, the purchaser will be compelled to pay interest for it, if not paid at that day (2 Sugd., V. and P., *193; Ackland v. Gaisford, 2 Haddock, 28,1816; Champernowne v. Brooks, 3 Clark & Finnelly’s Appeal Cases, 4, 1835).

II. • Where, however, interest is more in amount than the rents and profits, and it is clearly made out that the delay was occasioned by the vendor, although he may be free from p'ersonal misconduct, as, for instance, where the delay is caused by a defect in the vendor’s title, which may be unknown to him, to give effect to the general rule would be to enable the vendor to profit by his own wrong, and the Court, therefore, in such cases, gives the vendor no interest, but leaves him in possession of the interim rents and profits ; and, therefore, in such case, where a good title is not shown until the given period, the purchaser will pay interest only from that period, and he will, of course, take the rents from the same time (Sugden on Vend. and P., *806, sec. 46).

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III. Where the non-performance and delay have been occasioned by the wilful default of the vendor, and the vendor has received interest, or has remained in possession, and in the mean time the property has diminished in value, or has been deteriorated by permissive waste, the purchaser is entitled to compensation, which may be decreed according to the circumstances of each case, either by adjudging the vendor not entitled to interest on purchase-money, but on the contrary accountable not only for the rents actually received, but also for those which he might have received but for his wilful default (Sugden on Vend, and P., *806, sec. 44; Regents’ Canal Co. v. Ware, 23 Beavan, 575, 1857, Lord Romilly).

IV. But where there is an express stipulation in the contract that, if the conveyance is not executed and the purchase-money paid by the day named, interest shall be paid by the purchasers ■ until the purchase is completed, the terms of that stipulation apply to every kind of delay, except such as may be occasioned by the wilful default of the vendor.

In such cases the interest does not depend upon any rule of the Court, but upon the express stipulation of the parties, and the terms of that stipulation apply to every delay, however occasioned, except the wilful default of the vendor, or such other delay as may be expressly excepted from the operation of the contract; and whether in such cases the interest exceeds the mesne profits or not, the purchaser must pay interest according to his stipulation (Lord Palmerston v. Turner, 33 Beavan, 525, 1864, Lord Romilly, in which case the purchaser was held to pay interest at four per cent.; William v. Genton, 34 Beavan, 528, 1865 ; Tewart v. Lawson, 3 Smale & Grifford, 307,1856, V. C. Stuart).

V. If, after the contract and before the conveyance, the estate, or a particular and specific fund, or a vested right or specific interest, be improved or increased, or if the value be lessened without any fault on either side, the vendee- has the benefit and sustains the loss (Sugden on V., *819, sec. 98; Anson v. Towgood,

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1 Jacob & Walker’s Chancery R., 617,1820; Vesey v. Elwood, 3 Drury & Warren, 74, 1842; Kimberley v. Tew, 5 Irish Eq., 389, 1843; Davy v. Barber, 2 Atkins, 490, 1742; Small v. Atwood, 3 Young & Collyer’s Exch. R., 105, 1838).

The cases so far examined refer either to a specific estate in lands, a specific interest in a particular fund, a specific vested right, or other specific property fully described and clearly identified, and therefore have no application to a contract for the sale of stocks generally, which may or may not be in the possession of the seller, which are not described so as to be capable of being’ distinguished and identified. The decision in each of said cases was made upon entirely different principles from those governing the sale of stocks on time. The profits and rents of an estate run with the land and come out of it; the interest and other accumulations attach to a specific fund and become part of the same. It is different, however, with stocks. Again, it will be observed, that in every case so cited, there was either a default on the part of the vendor Irx carrying out his contract, or, at any rate, the other party suffered delay in receiving what was coming to him; but, notwithstanding this, the purchaser was invariably held to the terms of his contract,, whenever he had stipulated to pay interest. In the case under consideration, the vendor did not make any such default.

VI. The next following additional cases cited by the plaintiffs simply decide that whenever a debtor is in default for not paying or repaying money, delivering property, or rendering services in pursuance of his contract, he is chargeable with interest from the time of his default, on the specified amount of money or the value of the property or services at the time they should have been paid or repaid or rendered (Van Rensselaer v. Jewett, 2 Comst.,140; Rensselaer Factory v. Reid, 5 Cow., 587 ; Cleveland v. Burrill, 25 Barb., 538 ; Viele v. Troy and Boston R.R. Co., 21 Barb., 396 ).

As the defendant in this case, under his option, had the right to postpone the performance of his contract until long after the dividends had been declared and the additional stock issued, it

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is very clear, upon the principles laid down in the cases above cited, that he could not have made default, so as to entitle the plaintiffs to these dividends and accretions, upon the mere ground that they had voluntarily agreed to pay interest from the date of their contract.

VII. The decision in the cases of Courtney v. Ferrers (1 Simons, 137, 1827), Webster v. Donaldson (34 Beavan, 451, 1865), Terry v. Wheeler ( 25 N. Y., 520 , 1862), turns upon the peculiar circumstances of each case.

In Courtney v. Ferrers, the assignment of the policy assigned “ the policy and all moneys, benefits, and advantages to arise, accrue, or become due or payable upon or by virtue of it in any manner,” and the Vice-Chancellor therefore held that the whole fruits of the policy passed.

In Webster v. Donaldson, the plaintiff, in May, 1863, agreed to purchase an estate, including hay and crops, for £9,000. The purchase was to be completed on the 24th of June, when plaintiff was to have possession; and if not then completed, the plaintiff was to pay interest at the rate of 3 per cent, on the purchase-money from that day. By subsequent agreement, at the request of the purchaser, November was substituted for June. The contract was not concluded until February following, when the plaintiff paid the purchase-money, with interest only from the 29th of September, 1863. In the mean time the vendors sold the hay and garden produce, and it was held that, under the altered contract, the plaintiff was not entitled to the hay or produce. The Master of the Rolls says: “ I think that, having regard to the conditions of sale, the hay and growing crops were limited to those existing at the time of the conclusion of the sale; but as the purchaser was not to have possession until the purchase was completed, he could not properly gather the crops before that time.”

And as the conditions, as varied, expressly stated that the purchaser is not to receive any of the rents or profits of the land until the 29th of September, the Master very properly remarked that there would be a manifest advantage given to a purchaser,

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by postponing the day for completion, if he were to have the crops exactly as if he had completed three months sooner, and yet escaped payment of the three months’ interest on the purchase-money.

In Terry v. Wheeler the title had passed, and Selden, J., made the remark quoted by plaintiffs’ counsel to show that in a case of that kind the risk as well as the increase attends upon the title and not upon the possession.

In Sheldon v. Sherman ( 42 Barb., 368 ) there was no contract of any land, and the case was decided upon the principles of common justice; and in Scranton v. Booth ( 29 Barb., 171 ), where the parties differed in their understanding as to the rent agreed between them, it was held that the tenant must pay what the premises were reasonably worth.

I cannot see how these two cases can be relied on as authority for the alteration of the plain terms of a written contract executed by both parties, or the interpolation of an additional obligation into the contract not contemplated by the parties at the time of its execution.

In Messenger v. The City of Buffalo ( 21 N. Y., 196 ) the city was held to have Impliedly assented to the alteration of the contract, because by its action it had rendered the performance of the plaintiff’s action impossible.

But what has the defendant in this case done so as to entitle the plaintiffs to an enlarged meaning of their contract ?

In Allanison v. The Mayor, &c., of the City of Albany ( 43 Barb., 33 ,1864), the question simply was whether a covenant in the plaintiff's contract “ that the plaintiff will commence said work and will proceed therewith without delay, and in such a manner as not to delay the contractor for the mason work,” imposed upon the defendants the obligation to have the building in readiness for the plaintiff to perform the condition, and the Court held that, unless it did, it would be a contract merely on one side, with no corresponding obligation, no duty to be performed on the part of the other contracting party.

To the same effect is Churchward v. Reg.(1 C. L. Q. B., 173, 1865).

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These cases merely decide that in some instances, where a contract would he void for want of mutuality, a correlative and corresponding obligation on the part of the other party will be implied, so far as it may become necessary for the purpose of sustaining the contract, but no more. But this doctrine cannot in any case be relied on as a justification for the imposition of a new, distinct, and additional obligation not embraced within the plain terms of a written contract, which has been executed by both parties, and which clearly defines their mutual rights and obligations.

The foregoing examination of the cases cited and relied upon by the plaintiffs wholly failed to disclose a principle or theory upon which the plaintiffs’ claims could be sustained. On the other hand, the cases of Decker v. Furniss (4 Kern., 612), Kelly v. Upton ( 5 Duer, 336 ), and Spear v. Hart (3 Robertson, 420), are such direct authority for the proposition that the contract in this case is executory only; that the title did not pass, no matter how the plaintiffs considered it; that the dividends and additional stock follow the title as recognized by the company, and that consequently the plaintiffs, notwithstanding their agreement to pay interest, are not entitled to the dividends and additional stock claimed by them—that the first three claims of the plaintiffs must be disallowed.

The fact that the plaintiffs, under their contract, made six deposits in the United States Trust Company, cannot make any difference in this respect, for two reasons:

First—Because the justice who tried the cause found, as matter of fact, that said deposits were made as security for the performance of the contract only; and,

Second—Because, even if they had been made as payments on account, as earnest-money to bind the bargain, the contract would not have been changed thereby; for the true legal effect of earnest-money is simply to afford conclusive evidence that a bargain was actually completed with mutual intention that it should be binding on both contracting parties; and the inquiry whether the title to the property has passed in such case is to

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be tested not by the fact that earnest was given, but by the true nature of the contract concluded by the giving of the- earnest.

As to the fov/rtlh claim of the plaintiffs:

If. the defendant is liable at all, he is so for the simple bread of the contract to deliver the stock, the vendees not having paid to him the purchase-money in advance. The Justice at Special Term has found, as matter of fact, that the six deposits made by the plaintiffs in the United States Trust Company were made as security for the performance of the contract on their part, and this finding cannot be disturbed. The defendant had, until the 31st day of December, 1867, including*, the whole of that day, for the performance of the contract on his part, and I do not perceive how he could make, default so as to incur a liability to respond in damages, except upon a tender of the purchase-money made by the plaintiffs after that day. No such tender has been made.- But, as this point has neither been raised nor discussed, it may not be fair to decide the case upon this ground.

If, then, there has been any breach on the part of the defendant, it must have occurred, according to the evidence, either on the 19th or the 31st day of December, 1867, and the measure of damages in such case is the difference between the contract price of the stock and the market price on the day of the breach, with interest from that day (Clark v. Pinney, 7 Cowen, 681; Taylor v. Read, 4 Paige, 561; Dey v. Dox, 9 Wend., 129 ; Davis v. Shields, 24 Wend., 322 ; Beals v. Terry, 2 Sandf., 127 ; Dana v. Fielder, 2 Kern,. 40; Norton v. Wales, 1 Robertson, 568).

The market value of the stock on these days, as proved, conrpares with the contract price as follows

On Decernber 19—Contract price at 128, with interest

thereon from Feb. 18,1867, at six per cent.......... 1341-

Market value...................................... '132-§-

On December 31—Contract price, with interest thereon

from Feb. 18,1867, at six per cent................. 134f-

Market value..................................... 131f

Concurrence

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This comparison shows that the market value of the stock on either of said days was less than the contract price, and consequently the plaintiffs, even if there was a breach by the defendant, sustained no actual damage.

The Justice at Special Term was therefore right in holding that this rendered it unnecessary to consider whether there was such breach; and it follows that the exceptions taken and filed by the plaintiffs to the findings of said Justice, as well as to his refusal to find certain other facts, are, and every one of them is, clearly untenable.

The judgment appealed from should in all respects be affirmed, with costs.

(concurring). This case, though very elaborately argued, is susceptible, as I understand it, of a simple solution. The contract speaks for itself. It is to sell and purchase by the respective parties one thousand shares of the capital stock of the Hudson River Railroad Company. This agreement is set out in the complaint as the foundation of the action. If either expressly nor by implication does- the contract impose upon the respondent an obligation to deliver to the appellants any thing beside these one thousand shares, nor confer on the appellants any other right than to demand and receive delivery of these same shares. And surely the rights and obligations inter se of the parties to the contract could not be affected by the action of strangers, i. <?., the Hudson River Railroad Company. How, the respondent tendered performance of his agreement pursuant to its stipulations, and the offer having been rejected by the appellants, who, refused to accept fulfilment of the contract actually concluded between the parties, the respondent has a right to treat the contract as rescinded, and to claim a discharge from all its obligations. On these obvious and elementary principles, I think, the judgment below may be sustained, without the necessity of recourse to interferences and distinctions, which serve rather to obscure than to elucidate the decisive point in litigation.