Bailey v. Lay , 18 Colo. 405 ( 1893 )

Mr. Justice Elliott

delivered the opinion of the court. '

The sustaining of the demurrer to the amended complaint' is assigned for error. The demurrer specifies several grounds of objection; but upon this review it is only necessary to' consider whether the complaint states facts sufficient to constitute a cause of action against the principal defendants, Lay, Mallory and Brown.

Plaintiffs claim to recover for the breach of a certain written agreement, entered into March 22, 1887, between the defendants Cummins and Oleott of the one part, and the defendant Lay, acting for himself and for his codefendants Mallory and Brown, of the other part. It is alleged, also, that said agreement was made by Cummins and Oleott in pursuance of authority from, under a contract with, and for the benefit of, plaintiffs, as well as for the benefit of Cummins and Oleott, who are made defendants in the action because they refused-to join as plaintiffs. Code, sec. 12.

The gravamen of the complaint is, that defendants Lay, Mallory and Brown refused to make and deliver a deed of conveyance of their certain mining property to the Iron Mask Mining and Smelting Company, as by said agreement in writing they had contracted to do. According to the terms of the written agreement the defendants were to deliver the deed to the mining property at the time of the first payment of $250,000 which sum was to be provided for as follows: The Iron Mask Mining and Smelting Company was to be organized as a corporation with a capital stock of 500,000 shares. Of these shares Lay was to take 26,000, Cummins 26,000, Bailey 16,000, and Oleott 15,000, each paying therefor at the rate of $3.20 per share, thus raising a fund of $265,600. Of this fund $250,000 was to go to the owners of the property, and the residue to the treasurer of the corporation as a Smelting Works fund.

The agreement in regard to the first payment and the agreement to deliver the deed were to be performed at the same time; they were mutual and dependent agreements; and performance or an offer to perform in respept to first payment was necessary to make .it incumbent upon the defendants to deliver the deed. Englander v. Rogers, 41 Cala. 420; Bakeman v. Pooler, 15 Wend. 637; 2 Parsons on Contracts, 528, 675; 2 Chitty on Contracts (11th ed.), 1082.

The complaint alleges that plaintiffs’ associates, Cummins and Oleott, and the Iron Mask Mining and Smelting Company, notwithstanding the default of the defendants in respect to the delivery of the deed, “ were ready and willing to accept the said premises and make payment therefor according to the terms, letter and spirit of the said agreement.” The condition stated in the complaint in respect to the refutation of certain rumors upon which the above named parties were ready and willing to accept and pay, need not be considered, since the complaint nowhere contains any averment to the- effect that the first payment of $250,000, or any part thereof, was paid or offered to be paid, at time, by any party or parties, upon any condition whatsoever.

The averment that Cummins and Olcott and the Iron Mask Company were ready and willing to accept the premises and make payment, is not equivalent to an averment of payment or of an offer to pay. In a case of this kind, when the time for payment has actually arrived, mere readiness and willingness to pa3r are immaterial — such readiness and willingness, without more, will not discharge coutrapt obligations. An averment of readiness and willingness to pay presents nothing tangible or substantial; it involves little more than the state of mind of the party presenting the plea ; and the determination of an issue taken thereon would not decide the rights of the parties. On the other hand, an averment of payment or of an offer to pay, is an averment of an overt act —an important and substantial fact; and the determination of an issue taken thereon would, subject to other issues in the case, be decisive of .the controversy. Hence it is, that to state a cause of action in $ case of this kind the law requires that the complaint shall contain a direct and positive averment of payment, or of an offer to pay.

The fact that the delivery of the deed and the payment of the money under the contract was to be accomplished through the organization of an incorporated company and the issuance and transfer of shares of stock, does not change or affect the application of the rule in regard to the time of performance ; nor does it affect the rights of the parties that the owners of the property may have been bound to accept the 26,000 shares of stock which Lay agreed to take at $3.20 per share, as part of the first payment, since it is not alleged that the residue of the first payment or any part thereof, as specified, was either paid or offered to be paid.

Giving the written agreement as pleaded a fair and reasonable construction, it clearly appears that the intent of the parties was that the whole transaction, up to and including the first payment as specified, should be consummated simultaneously. There is nothing in the conduct of the parties, nor in the written agreement as stated in the complaint, to indicate that Lay or any of the owners of the mining property had any desire or intention to organize a corporation and issue shares of stock, unless, by so doing they could dispose of their property and receive therefor the payments as specified in' the written agreement; and they had the right to retain their property in their own individual names, unless, concurrently with its transfer to the corporation, the first-payment as provided by the written agreement was paid or tendered for their acceptance.

The complaint does not show such a performance or offer to perform by plaintiffs or their associates as made it incumbent upon defendants to deliver the deed. The ruling of the trial court sustaining the demurrer was, therefore, right, and must be affirmed.

Affirmed.