Underwood Typewriter Co. v. Century Realty Co. ( 1906 )

NORTONI, J.

(after stating the facts:). — The material. facts alleged are: first, that on December 5, 1900, plaintiff became lessee of the premises described in the petition under a written lease executed by defendant for a term of five years; second, that under the terms of said lease, plaintiff was prohibited from subletting the premises or assigning the lease without first obtaining the written consent of the defendant on the hack of the said written lease; third, that the defendant afterwards, during the term of the lease, made its promise in writing to the plaintiff to give its written consent on the hack of said lease to an assignment thereof by plaintiff to an acceptable tenant when procured and produced to it by plaintiff; fourth, that relying upon this promise, plaintiff, with the knowledge of defendant, expended a large amount of time and labor in securing an acceptable and satisfactory tenant for the premises and did secure such tenant from whom plaintiff could have realized a profit to itself had the defendant executed the written consent to assign the lease, as it had theretofore promised; fifth, that the defendant refused after plaintiff had performed on its part, to give its said written consent to the assignment of the lease, whereby plaintiff is damaged, etc..

The demurrer admits these facts to be true and the question presented thereby calling for the opinion of the court is: does the petition show mutuality in that sense that an action can be maintained by a party who has performed its part against the party who refuses to perform? We are quite clear that it does. Now, it. is true that there is no mutuality shown between these parties in the first instance. The agreement, when entered into, was clearly nudum pactum. The defendant being under no manner of obligation to do so, made a written promise to make the indorsement on the lease permitting the assignment thereof upon plaintiff’s furnishing a satisfactory tenant. Now for this agreement the defendant received no compensation nor reward of any kind or nature, nor did plaintiff inconvenience itself or forfeit any right or make any expenditure of time or money at the time of the promise, and while the matter was in this posture, it is true, plaintiff could not have maintained any suit thereon for its breach until he had first performed. In fact, there could have been no breach until plaintiff had first performed, for hisperformance was essentially a precedent condition and there was therefore no obligation imposed upon the defendant until the plaintiff had performed, by finding and producing a satisfactory tenant. It is true, on the other hand, that defendant could not have maintained any suit against the plaintiff thereon for its failure to perform, because there was no obligation imposed thereby upon it to perform; in fact, prior to the plaintiff’s performance, the matter stood as it was, a mere naked promise on the part of the defendant to perform after the plaintiff had performed, and under these circumstances, there was, of course, want of mutuality, want of lawful consideration, and the agreement was therefore a nude pact a.t that time and remained so unless mutuality or consideration entered therein later in some manner ivhich will satisfy the law. It becomes important, then, to ascertain what will satisfy the law in this behalf. Let us examine. We find, first, that it is elemental tbat while a valuable consideration is usually treated and thought of as something passing between the parties whereby one surrenders and the other receives something of value, that this is not essential. A consideration no more means that one party has profited, than it does that the other party has' put himself to some trouble or inconvenience or abandoned some right or assumed some burden on the faith of the promise of the other party, and it is wholly immaterial that the party against whom the promise is sought to be enforced has received anything of value or an actual benefit to him for his promise. The law pertaining to the sufficiency of a consideration is satisfied if the moving party, the promisee, .puts himself to inconvenience, trouble or expense, relying upon the faith of the promise of the party against whom the promise is sought to be enforced, for_ in such case the inconvenience, trouble and expense will be taken to have been incurred at the instance and request of the promisor. [School Dist. v. Scheidley, 138 Mo. 672-684, 40 S. W. 656; Halsa v. Halsa, 8 Mo. 303-307; German v. Gilbert, 83 Mo. App. 411; Koch v. Lay, 38 Mo. 147; Webb’s Pollock on Contracts, 167; 9 Cyclopedia of Law and Proc., 308.] In such, case the law, in a spirit of justice, regards that inconvenience, trouble and expense as having been invited and entailed by the promise of the other party and therefore impliedly at his instance and request, and the moving party having discharged his undertaking, it therefore affixes the mutuality of obligation and sufficiency of consideration which relates back to the inception of the agreement as against the promisor and requires him to respond as well. This is the principle, as we understand it, as will be evidenced by consulting the following authorities in point. [School Dist. v. Scheidley, 138 Mo. 672, 40 S. W. 656; Laclede Const. Co. v. Tudor Iron Works, 169 Mo. 137, 69 S. W. 384; Willets v. The Sun Mut. Ins. Co., 6 Amer. Rep. 31; South & North Ala. Ry. Co. v. R. R. Co., 39 Amer. St. 74; Muscatine etc. Co. v. Muscatine Lumber Co., 39 Amer. St. 284; Andreas v. Holcombe, 22 Minn. 339; Morgenstern v. Davis, 14 N. Y. Supp. 31; Storn v. U. S. 99 U. S. 76-83; Mills v. Blackall, 11 Ad. & Ell. (N. S.) 258; Kennaway v. Trelcavan, 5 Mees. & W. 501; 9 Cyclo. Law and Pro., 333; 7 Amer. and Eng. Ency. Law (2 Ed.), 115; Lawson on Contracts (2 Ed.), sec. 106.]

It is true that in such agreements, which at first are insufficient by reason of the want of the very essential element of every valid contract, sufficient consideration and mutuality, the promisor can, if he sees fit, revoke and recall the promise at any time prior to the promisee having moved toward its fulfillment and expended time, labor or money and inconvenience himself thereabout, for up to that time nothing having been done thereunder, by the promisee, it will remain a nude pact and is not obligatory. [Andreas v. Holcombe, 22 Minn. 338.] But if the promise is permitted to stand and with the knowledge of the promisor, the promisee expends time, labor or money, or otherwise inconveniences himself or forfeits any legal rights, relying upon the faith of the promise, the element of consideration and mutuality is thereby supplied as of the date of the agreement and the contract at once becomes enforcible at law. It appears from the allegations of the petition that although the defendant was under no obligation to make the promise, and although it received no recompense for so doing, that nevertheless it did promise in writing to the plaintiff as alleged. No doubt this promise was purely a matter of accommodation to the plaintiff, but it appears that the promise was permitted to stand unrevoked and unrecalled when the defendant had the clear right to recall it for want of mutuality and consideration, and that the plaintiff, relying upon the faith of the promise, which he had a right to do, proceeded and with knowledge of the defendant, expended a large amount of time and labor in securing an acceptable and satisfactory tenant. Under the circumstances stated, a majority of the court are of the opinion that a sufficient consideration and mutuality was imported into the agreement by such performance, which related back to its' origin and rendered it a contract valid in law, and affixed a mutual obligation on the defendant to respond.

2. Since writing the foregoing opinion, the learned presiding judge has prepared a dissent and requested that the casé be certified to the Supreme Court, as in his opinion the decision is in conflict with the decision of the Supreme Court in Blaine v. Knapp, 140 Mo. 241. In the opinion of the majority of this court, that case is entirely dissimilar from the one now under consideration. There the contract was to the effect that Blaine was to receive additional compensation provided the employer “changed its mind/’ and became of the opinion that his services Avere such as to demand additional compensation. The court said (1. c. 249) that: “this increase depended entirely upon the opinion of the management and there is no allegation in the petition that the management were of the opinion that he was entitled to it.” Certainly there can be no similarity between that and the case at bar, for here, while it may he said that the plaintiff was to produce an “acceptable tenant” and that it might be a matter of opinion as to what or who would be an acceptable tenant, yet, according to the allegation, this whole matter is precluded, for it is alleged in the petition that plaintiff, with the knowledge of the defendant, expended a large amount of time and labor in securing “an acceptable and satisfactory tenant for the space embraced in said lease, and did secure such tenant for such space.” The demurrer admits that the tenant was procured and was acceptable to defendant. The whole matter is thereby as much precluded as it would have been had the defendant’s president taken the witness stand and given testimony to the effect that the plaintiff had performed his part of the contract by securing and producing a tenant which was entirely acceptable and satisfactory to the defendant; in fact, the allegation' that the plaintiff had secured “an acceptable tenant” is the allegation which makes the case, for it and it alone is the allegation which shows performance on the part of the plaintiff from which arises the consideration and affixes the mutuality of the obligation on the defendant.

Entertaining these views, we are of the opinion that the petition was sufficient and that the demurrer should have been overruled. The judgment is therefore reversed and the cause remanded.

Goode, J., concurs; Bland, P. Jdissents.