Stokes v. Stokes

Van Brunt, P. J.:

On the 18th of October, 1892, the plaintiff brought an action in the Superior Court of the city of New York to recover upon three promissory notes made by the defendant to the order of the plaintiff. On the 21st of October, 1892, an amended complaint was served. Upon the same day another action was brought in the same court by the plaintiff, against the defendant, to recover the amount due upon a fourth promissory note. On the 16th of November, 1892, upon the consent of the attorneys for the respective parties, the said two actions were consolidated into one action. On the 22d of November, 1892, the defendant served his answer in the consolidated action, admitting the making of the notes set forth in the compdaint, and that they were due and unpaid, and then alleging by way of defense and counterclaim, in substance, that at the time of the execution of the first three notes, he deposited with the plaintiff as security therefor 100 of the first mortgage bonds of the Hoffman House Corporation of the actual and par value of $100,000, and 30 bonds of the United Lines Telegraph Company, of the actual and par value of $30,000; that thereafter and as further security for said notes, he deposited with the plaintiff 25 additional bonds of the Hoffman House Corporation of the actual and par value of $25,000, and that all said bonds were held by the plaintiff as collateral security for said three notes and for no other purpose; that thereafter and upon the execution of the fourth note, it was agreed that the plaintiff should hold said 155 bonds as security for that note also; that on the 15th day of November, 1892, the defendant duly tendered to the plaintiff $3'7,500, the amount of said four notes, with interest and costs, upon condition that said plaintiff should surrender to him said 155 bonds ; that the plaintiff refused to receive the money or deliver the bonds, and thereby converted said bonds to his own use; and alleging that the bonds were worth the sum of $155,000, and claiming judgment for that sum.

The plaintiff replied to the defendant’s counterclaim on the 12th of December, 1892, and denied that the 125 Hoffman House bonds had been deposited with him solely7 as collateral security for the payment of the four notes in question, but admitted that the 30 United Lines Telegraph bonds had been so deposited and alleging that he had offered to redeliver said United Lines Telegraph bonds to the defendant upon payment of the four notes in suit. The plaintiff further alleged that as to the 125 Hoffman House bonds, after the same had come into his possession, and on or about the 21th of August, 1891, a certain contract or agreement in writing under seal, bearing date August 18, 1891, was executed between the plaintiff and the defendant, and that in part performance of said contract of August eighteenth, and for the purposes therein recited and set forth, the said 125 Hoffman House bonds, and no more, and none other thereof, were deposited with and still held by the plaintiff. The answer further alleged that the defendant, although frequently requested so to do, had neglected and refused and still neglects and refuses to make the deposit with plaintiff of 25 additional bonds of the Hoffman House Association as required by said contract of August 18, 1891, the deposit of which the plaintiff was entitled to have made with him by the defendant. The plaintiff, further replying, denied the value of the bonds.

This action first came on for trial before the court and a jury on the 20th of November, 1893. Certain evidence was thereupon offered, and a verdict was directed by the court in the plaintiff’s favor for the amount due on the four notes with interest. Upon appeal the judgment was affirmed by the Court of Appeals. Subsequently a motion was made for a new trial on the ground of newly-discovered evidence. This motion was granted and a new trial had, which also resulted in a direction by the court of a verdict in favor of the plaintiff, judgment .being suspended and the exception ordered tobe heard in the first instance at the Appellate Division ; and the questions now presented to the court arise upon a motion for a new trial upon the exceptions contained in that record. The issues which were tried were those presented by the counterclaim, and were whether the said collaterals were pledged only for the payment of the notes in suit and for no other purpose, or, if some other obligation was covered by the pledge, that such other obligation was discharged and not in force at the time of the tender. The court held as matter of law that the agreement of August 18,1891, was in force and consequently that the said tender was not sufficient.

The said agreement of August 18, 1891, is as follows :

“ This agreement made the 18th day of August, 1891, between Edward S. Stokes and W. E. D. Stokes, wiinesseth,

“ Whereas, the said W. E. D. Stokes has heretofore, with the consent of said Edward S. Stokes, purchased from Cassius H. Eead 1,250 shares of his preferred stock and 500 shares of his common stock of the ‘ Hoffman House,’ a corporation, and with the knowledge and consent of the said Edward S. Stokes- is about to purchase from said Eead the remainder of his stock, to wit, 1,963 shares of common stock, or a portion thereof, with the intent that they may together be the owners of the whole of the ' stock of said corporation;

“Whereas, the whole of the issue of five hundred thousand dollars of bonds of said ‘ Hoffman House,’ secured by a mortgage to the Farmers’ Loan and Trust Company — except twenty-five thousand dollars given up and cancelled — are now owned and held by said Edward S. Stokes, except a portion held and controlled by him as a pledge from said Eead, for money due by him to • said Edward S. Stokes.

“Whereas, the said Edward S. Stokes hereby declares that the indebtedness of the old firm of C. H. Eead & Co. has been paid and extinguished, except the contested claim now in suit against them by John W. kiackay, except the claim against them by Edward S. Stokes, and except about fifteen thousand dollars for taxes which said C. H. Eead & Co. are bound to pay; and further declares that there is no indebtedness of the 1 Hoffman House,’ except as shown in their balance sheet of 31st July, 1891, for $66,353.49-100, and for current expenses.-

“Wow, therefore, in consideration of the premises, and of the covenants herein by each made to the. other, and for a good and valuable consideration by each paid to the other, the said parties hereby covenant and agree as follows:

“First. Heither of said parties will sell any of his stock of the ‘ Hoffman House ’ without first consulting with, and offering to sell the same to the other, and if a sale is made by one, the other party shall have the option to make it a sale for joint account.

“ Secondly. Said Edward S. Stokes shall have for his services, as an officer of said corporation, a salary not to exceed four hundred dollars a month. Ho» new enterprises or business shall be undertaken or any liability incurred by said corporation outside the regular business of, managing the present hotel, restaurants and cafés, except with the express consent in writing of said W. E. D. Stokes.

“ Thirdly. The said W. E. D. Stokes shall have two of the directorships of said corporation for himself or his nominees.

“ Fourthly. For the consideration aforesaid, the said Edward S. Stokes guarantees the said W. E. D. Stokes that there are no other claims and debts against the 1 Hoffman House,’ except those shown on said oalance sheet of 31 July, 1891, and the current expenses, and guarantees and indemnities him against all claims against the ‘ Hoffman House,’ by said C. II. Read & Co., or John W. Mackay, or said Edward S. Stokes, or any other persons as .the creditors of said C. IT. Read & Co.

“Fifthly. The said Edward S. Stokes further covenants and agrees not to sell or dispose of any of the bonds of the • ‘ Hoffman House,’ owned or held by him as aforesaid, without the express consent of said W. E. D. Stokes, and also that the $25,000 of the $50,000 of bonds received from said Read, not yet cancelled, shall be cancelled pursuant to the terms of' the mortgage, on 1st July, 1892, and meantime held solely for that purpose, and no interest shall be paid thereon.

“ Sixthly. And as security for these guarantees, for a loan of about $32,000, and for any obligations of said Edward S. Stokes to said W. E. D. Stokes connected with said Read and against any foreclosure of the said mortgage, said Edward S. Stokes has deposited with said W. E. D. Stokes bonds of said ‘ Hoffman House ’ to the par value of $150,000.

“ Seventhly. The said W. E. D. Stokes agrees to sell and transfer to said Edward S. Stokes one-half of the whole, or of such portion of said 1,963 shares of common stock as he may purchase from said Read, at the price he pays for said shares, with interest at six per cent on his note at twelve months, with one renewal, if he desires, for twelve months longer, with the stock so sold as collateral. Upon payment of said price at the time above specified the shares sold shall be delivered to said Edward S. Stokes, and he shall, in the meantime, receive the dividends thereon.

“ Eighthly. For any violation of this agreement each party shall have a claim and charge against the other on the books and accounts of the ‘ Hoffman House.’

“ In witness tohereof, we have hereto set our hands and seals on the day above written.

“ E. S. STOKES [seal].

“ In presence of “ W. E. D. STOKES [seal].

“ War. R. Martin.”

It will not be necessary, in discussing these exceptions, to consider at length the oral evidence which was adduced upon the trial. It would seem that the main question arises upon the effect of the legal proceedings which had culminated in the judgment between these same parties, and involving the agreement of August 18, 1891, and the transactions which were the subject-matter of the present litigation. If, however, this question is resolved in favor of the plaintiff herein, there would in any event seem to be questions which should have been submitted to the jury.

Upon the trial there was introduced in evidence a judgment roll in an action commenced in the Supreme Court in or about the month of November, 1892, brought by the defendant in this action against the plaintiff in this action. In his complaint in that action Edward S. Stokes alleged that, on and prior to the 9th of July, 1891, he was indebted to W. E. D. Stokes in the sum of $36,300, which were represented by four notes, being the notes upon which the present action was brought; that on or about the 10th of July, 1891, there was paid on account of the indebtedness represented by said notes the sum of $2,000, leaving a balance of $34,300 still due and owing. He further alleged that as collateral security for the payment of the indebtedness he had delivered the 125 Hoffman House bonds, heretofore mentioned, and the 30 bonds of the United Lines Telegraph Company, and that the actual value of these securities was $150,000. He then alleged the organization of the Hoffman House Corporation, with a share capital of $150,000, divided into 2,500 shares of preferred stock and 5,000 shares of common stock, for the purpose of acquiring the hotel property and business which had theretofore been conducted by Edward S. Stokes and one Cassius H. Read as partners under the firm name of C. LI. Read ; that the corporation duly acquired from said firm the said hotel property and business and issued in part payment thereof the said $750,000 of preferred and common stock in or about the month of August, 1890, which stock was thereupon divided between Edward S. Stokes and Eead; that after said Bead had come into possession of his portion of the Hoffman House stock, the said W. E. D. Stokes represented that Eead had offered to sell said stock to him, and that he proposed to purchase all of Bead’s stock for the joint account of himself and the plaintiff (aside from certain shares of preferred and common stock which E. S. Stokes had already purchased from Eead for his own account) so that W. E. D. Stokes and Edward S. Stokes might together own the entire capital stock of the corporation. The plaintiff then alleged that in reliance on the representation of the defendant, who then held all of Bead’s stock under pledge, he made and executed the said contract of August 18, 1891, with the defendant. After alleging certain facts surrounding the manner in which said contract was entered into, he further alleged certain negotiations and agreements between himself and W. E. D. Stokes whereby it was mutually agreed that the parties should abandon the agreement of August 18, 1891. The plaintiff further alleged that he had offered and was willing to pay the indebtedness of $34,300 on the return and surrender to him of the said 125 Hoffman House O bonds and 30 United Lines Telegraph Company bonds. But the defendant refused to return said collaterals and claimed the right to enforce payment of said notes and to retain said securities. The .said E. S. Stokes thereupon set up the commencement of the actions in the Superior Court, which were subsequently consolidated into one action, and which is the action now before the court; and alleged that W. E. D. Stokes claimed among other things the right to hold said Iloffman House bonds and United Lines Telegraph bonds against an indorsement or guaranty given by the plaintiff on a note of $13,000 made by Eead, as collateral to which W. E. D. Stokes held 1,963 shares of Hoffman House common stock; and that the defendant claimed that the agreement of August 18, 1891,, was still enforcible by him, and that he had the right to hold the plaintiff’s securities indefinitely as against any foreclosure of the Hoffman House mortgage, although he never, in fact, made the purchases of stock intended to loe protected against such foreclosure. Said Edward S. Stokes demanded judgment enjoining the defendant from further prosecuting the said action in the Superior Court, and that the defendant be adjudged to hold the 125 Hoffman House bonds and the 30 United Lines Telegraph bonds as securities only for the payment of the notes sued upon, and that on payment of said notes with interest the defendant surrender said securities to the plaintiff, and for certain other relief. Annexed to said complaint was the agreement of August 18, 1891, and the summons and complaints in the Superior Court actions.

On or about the 19th of November, 1892, W. E. D. Stokes served his answer in the Supreme Court action. He admitted the allegations of indebtedness and deposit of collaterals, denied .the value of the securities, and alleged that he had no knowledge or information to fo'rm a belief as to the relations between Edward S. Stokes and Cassius H. Head. He also alleged that whatever representations were made by W. E. D. Stokes were made or had during negotiations between the defendant and the plaintiff, which resulted in the execution of the contract of August 18, 1891. The answer then alleged that the contract was deliberately entered into and was executed on or before August 24, 1891, after numerous conferences and negotiations were had between the parties to the contract. The answer then denied that W. E. D. Stokes had made any agreement by which said contract of August 18, 1891, was abandoned or modified in any respect. The said W. E. D. Stokes then alleged that the plaintiff prior to the 18th of October, 1892, proposed and asserted his willingness to pay the indebtedness and interest arising upon the notes mentioned in the complaint upon the return and surrender to him of said 125 Hoffman House bonds and 30 United Lines Telegraph bonds, but no valid tender was made prior to the 15th of November, 1892, on which day the plaintiff made a tender of the principal and interest of said indebtedness together with the costs in the two actions pending in the Superior Court upon said promissory notes (being this action), , and that said tender was then made upon condition that the defendant should deliver to the plaintiff all of said securities; that the defendant had theretofore offered and at the time of said tender offered, and in said answer offered to deliver unconditionally the said 30 United Lines Telegraph bonds upon the receipt of the moneys described in said tender, but as to the 125 Hoffman House bonds the said W. E. D. Stokes had theretofore claimed, and at the time of said tender claimed, and still claims, to hold -a lien upon them beyond and in addition to the payment of the notes and interest and costs, and prior and at the time of said tender asserted, and in his answer alleged, that his claims in that regard were based in part upon said written agreement of August 18, 1891, and that he held the same for the purposes therein recited. The defendant denied that plaintiff’s liability on said notes became merged in and a part of the agreement set forth in the complaint, and denied that the liability of the plaintiff on said notes as provided in said agreement of August 18, 1891, had been modified or altered in any respect. W. E. D. Stokes further alleged in his answer that, under the terms of said agreement of August 18, 1891, the amount of Hoffman House bonds stated to have been deposited with the defendant was $150,000, of which $125,000 thereof and no more had been deposited with the defendant, and that said E. S. Stokes, although frequently requested so to do, had neglected and refused, and still neglects and refuses, to make the deposit with the defendant of the 25 additional bonds as required by the terms of said agreement.

The answer further alleged that a certain note of $15,000 made by said Cassius H. Head was one of the obligations of the plaintiff referred to and described in the agreement of August 18, 1891, and that he claimed the right to hold said Hoffman House bonds as collateral for the payment of said note of $15,000. The defendant admitted that the plaintiff had tendered the amount due on said $15,000 note with interest, and alleged that said tender was made upon condition that the collateral security of said note, which said collateral security was the property of said Head and to which the plaintiff had no right, or possession, should be surrendered and delivered to the plaintiff.

The defendant W. E. D. Stokes further answering, by way of counterclaim repeating all the allegations, admissions and denials in said answer contained, alleged that at all times since tire making, execution and delivery of said contract of August 18, 1891, lie had been and was then entitled to have deposited with him by the plaintiff the whole of said bonds of said Hoffman House to the par value of $150,000 to be held by him as security pursuant to the terms and provisions of said agreement of August 18, 1891, and that plaintiff had neglected and refused, and still neglects and refuses, to make such deposit with him of twenty-five of said bonds, although frequently requested so to do to his wrong, injury and damage, and judgment is demanded that the complaint be dismissed, with costs ; that said E. S. Stokes was not entitled to an injunction, and that he be required to deliver and deposit with W. E. D. Stokes additional Hoffman House bonds to the par value of $25,000 or the value thereof in cash, to be held by said W. E. D. Stokes pursuant to the agreement of August 18, 1891, and .for such other and further relief as to the court should seem just.

The said E. S. Stokes in January, 1893, replied to the counterclaim. He denied that said W. E. JD. Stokes since the execution of the contract of August 18, 1891, had been or was entitled to have deposited with him Hoffman House bonds of the par v,alue of $150,000, or that said W. E. D. Stokes was entitled to hold such amount as security pursuant to the terms and provisions of the agreement of August 18, 1891. He admitted the refusal to deposit said bonds, and reiterated his allegations in the complaint of an agreement between the parties that the contract of August 18,1891, should be abandoned; and, further replying, claimed that the construction asked by the defendant to be placed upon, said contract of August 18, 1891, was inequitable, and that the terms and conditions thereof were so indefinite, uncertain and oppressive that it would be inequitable to enforce them.

The trial of the issues thus raised between the parties resulted in a judgment by which it was adjudged that the complaint be dismissed, without costs, and by Avhich it Avas further adjudged that the cause of action set forth in the defendant’s counterclaim be dismissed on the merits, without costs. If the judgment had stopped here it would have been a complete adjudication. But it goes on further and gives a reason for the adjudication. After adjudging that the plaintiff was not, at the time of the commencement of the action, entitled to the temporary injunction granted to him (which necessarily followed from the dismissal of his complaint), it further adjudged that the true construction of the contract of August 18, 1891, was that the understanding of the parties was that the defendant should purchase from Read the whole of his 1,963 shares oi stock, or such portion thereof as should be sufficient to make the parties to said contract the sole owners of the stock of the Hoffman House corporation; in other words, the defendant was to buy the whole of said stock, or such portion thereof as the plaintiff should not buy; and it further adjudged that the defendant not having purchased said stock of Bead within a reasonable time from such contract, and the proof being that he had been unable to purchase by reason of the refusal of Bead to sell, the contract cannot be enforced against the plaintiff. Hot “ ought not ” but “ cannot; ” and it was. because the contract could not be enforced against Edward S. Stokes that the counterclaim of W. E. JD. Stokes was dismissed upon the merits. How it is difficult to see, if there was any vitality in the contract of August 18,1891, why the court should have held, not that it was inequitable to enforce the contract, but that, because of failure of consideration, the contract could not be enforced. The validity and enforcibility of that contract was the question which was decided, and the claim under that contract was dismissed upon the merits. Such being the adjudication, no other or additional claim could ever be made by virtue of that contract by W. E. D. Stokes.

Section 1209 of the Code of Civil Procedure seems to dispose of the question as to any right to maintain any action upon that contract by anybody, the counterclaim which was founded upon that agreement having been dismissed upon the merits. The section is as follows: “ A final judgment dismissing the complaint, either before or after a trial, rendered in an action hereafter commenced, does not prevent a new action for the same cause of action, unless it expressly declares, or it appears by the judgment roll, that it is rendered upon the merits.”

This section recognizes the rule that, in actions tried before the court without a jury, or before a referee, where the complaint is dismissed upon the merits, the judgment is a bar to any new action for the same cause of action; and it seems to have been adopted in order that there should be no uncertainty, such as had previously existed in this country, as to whether a bill was so dismissed as to be a bar to a new action, or not. In England the rule of the Court of Chancery was that where the decree dismissing a bill makes no reservation it may be pleaded in bar to any new bill for the same matter. (Dan. Ch. Pr. 1199.) It is, however, recognized that although the dismissal of a bill for the specific performance of an agreement does not carry with it an implied injunction against a subsequent nroeeeding at law, it is, nevertheless, the constant practice of the court to insert in the decree of dismissal of such a bill, that it should be without prejudice, etc. (P. 1200.) But where it was intended that it should operate as a bar to an action at law, it was the practice of the court to restrain such action by injunction in the decree. In. consequence, however, of the abolition of the distinction between actions at law and suits in equity in this State, such form of judgment became inapplicable, and it was the practice, in cases where a bill was dismissed and such dismissal was founded upon the fact that the plaintiff had no right to relief whatever, to dismiss the complaint upon the merits; and such dismissal was always deemed a bar to any other action. A dismissal in this form being equivalent to the injunction in the old chancery practice.

In this State, both prior to the Code and under the Code, the practice was settled in actions at law that a plaintiff could be non-suited after all the evidence on both sides had been received and both parties had rested, whether such action was tried before the court with a jury, or by the court without, a jury, or before a referee, and a simple dismissal of the complaint in either form of action was not a bar to the -maintenance of a new action. Where, however, the dismissal was upon the merits, the judgment in that form was a bar to any other action for the same cause. But in equity, even where such words were not contained in the judgment, it was frequently a question as to whether, the merits of the controversy between the parties having been gone into, the simple dismissal should not be held to' be equally a bar; and to avoid any uncertainty as to whether the judgment was intended to be a bar or not, and to make the practice in all forms of action the same, this section 1209 was introduced into the Code of Civil Procedure, it not having formed a part of the Code of Procedure which preceded it. It is apparent from an inspection of this judgment that the learned court which directed its entry had sharply in mind this distinction, because the plaintiff having offered no proofs in support of the allegations of his complaint, such complaint was dismissed simply,, The issues which were tried were those raised by the counterclaim and reply, and those issues having been determined upon the merits, and to the effect that the agreement sought to be established by the counterclaim could not be enforced because of a failure of consideration, that counterclaim was dismissed wpon the merits, the court adjudging that, because of a failure of consideration, W. E. D. Stokes had no rights which he could enforce because of the provisions of that contract. This view of the judgment is emphasized if we consider the findings upon which the judgment in question was founded, which, however, we cannot legitimately do in a case like the present, where the judgment is clear and unambiguous and certainly not for the purpose of nullifying its provisions, among which is a finding that the only consideration for the guaranties made by the plaintiff in the contract, and for the additional security from him therein provided for that was proved upon the trial, was an agreement to purchase Read’s Hoffman House common stock, and the further agreement that the plaintiff should have the privilege of buying from the defendant one-half of the stock that the defendant should purchase from Read at the price paid for the same. This judgment would, therefore, seem to be conclusive as to the rights of the parties under that contract, because it has been established, as between the parties, that it has no other consideration than that which has failed.

It is certainly clear that if W. E. D. Stokes had brought an action for damages because of his failure to deposit the twenty-five bonds referred to in the contract, the judgment in question would have been an absolute bar to such a suit: and if he cannot enforce any rights in this particular under the contract, because he had sapped it of its vitality by reason of his failure to comply with those things which were required of him under said contract, I cannot see upon what principle he could hold the other parts of the contract which depended upon precisely the same consideration.

An appeal was taken from this judgment to the General Term of the Supreme Court, and the judgment was there reversed. An appeal from such reversal was taken to the Court, of Appeals, where the judgment of the General Term was reversed and that of the Special Term affirmed, sustaining the construction given to the contract by the court at Special Term.

In the case at bar the learned court below held that, notwithstanding this adjudication, in view of the construction placed upon the rights of the parties by an opinion of one of the judges of the Court of Appeals, concurred in by two only of his associates delivered upon the appeal from the judgment in this action which was-affirmed by said court, the plaintiff had the right to hold the bonds-in question as security, first, for the guaranties referred to ; second,, for a loan of about $32,000, represented by the notes in suit; third, for any obligation of Edward S. Stokes to the plaintiff connected with Read, and, fourth, against any foreclosure of the mortgage thereby nullifying the express finding contained in the judgment in the equity action before referred to, that the only consideration which had been proved for the guaranties made by Edward S.. Stokes was the purchase of Read’s stock by W. E. D. Stokes, which consideration had failed.

In this, we think, the learned court erred. There has not yet-been any adjudication by the court of last resort that the judgment in the equity action has not established that, because of the failure of consideration, the agreement of August 18, 1891, could not be enforced.

The fourth judge who concurred in the affirmance of the judgment in this action in the Court of Appeals puts his decision expressly upon the ground that Edward S. Stokes had failed in showing, upon the previous trial of this action, that the bonds were held by the plaintiff for the payment of the notes and for no other ■purpose, and that they were not held upon some consideration independent of the agreement of August 18, 1891, expressly reserving any expression of opinion as to -whether, on account of the failure of the principal part of the consideration of the contract, it should not be, or had not been, held to be abrogated as a whole, thus leaving the question, both as to the effect of the adjudication upon that contract and as an original proposition, open and undetermined. Even if it is admitted that the adjudication in the equity suit (the nature of which, it seems to me, was to some extent overlooked by the learned court above in discussing the question on appeal before it, because that adjudication was not an answer to the question: “ Ought specific.performance under the circumstances to be now decreed ? ” but “ Is it possible to decree such specific performance, the consideration for the contract having failed ? ”) was not conclusive upon the question of consideration, it seems to me that the •contract will be searched in vain to find any obligation to be performed by W. E. D. Stokes, except the purchase of Bead’s stock, ■and to sell the half of that which was purchased to Edward S. Stokes at the price paid for the same. The only other agreement upon the part of W. E. D. Stokes is that neither of the parties will sell any of his stock in the Hoffman House without first consulting with and offering the same to the other—• which is a covenant entirely negative in its character, and evidently not intended to form the basis of any consideration for the covenants, guaranties and agreements contained in the contract upon the part of Edward S. Stokes.

But it is said that, because of a finding contained in the judgment roll in the equity suit that the contract had not been abandoned, as claimed by Edward S. Stokes, therefore, the adjudication in question did not establish the fact that the contract of August 18, 1891, •could not be enforced. This finding is to be considered, in view of the issue which was presented, namely, it was claimed by Edward S. Stokes that by an agreement the contract had been abandoned; this was denied by W. E. D. Stokes; and the court held that there was no sufficient evidence establishing the claim that the contract • had been abandoned by agreement; and. that was all that it then •decided. But it further held that the contract was unenforcible, because it had been sapped of its vitality by reason of the failure of W. E. D. Stokes to do that which formed the consideration for the contract. It was immaterial whether it had been abandoned by the parties or not, if the consideration had failed and it could not be enforced. Under such circumstances the contract would be ended whether both parties agreed to such a result or not. Either could insist upon the fact that it had become null and void, even against the will of the other. Therefore, such being the effect of the evidence offered, under the decision of the Court of Appeals when this case was heretofore before it for consideration, the question remaining to be determined was whether Edward S. Stokes has proven that, outside of the contract of August 18,1891, there was any'other agreement under which these securities were held. Evidence upon both sides was offered upon this issue, and we think that it was a question for the jury to determine, and that it could not be disposed of by the court. Neither in the opinions of the Court of Appeals, which held that this contract was in force, nor by the counsel for the respondent, has there been pointed out a single iota of consideration for the contract of August 18, 1891, except W. E. D. Stokes’ agreement to purchase the Read stock, which it is conceded he has not done. It is said in those opinions that the consideration for the contract was the mutual covenants and agreements of the parties; but what covenant or agreement, other than for the purchase of the stock which such contract contained, to be performed by W. E.-D. Stokes, has not yet been indicated.

It would seem, therefore, that the judgment in the equity suit was conclusive as to the enforcibility of the contract of August 18, 1891; and that, therefore, the question should have been submitted as to whether, outside of the contract, there was any agreement upon a sufficient consideration, under which the plaintiff in this action had a right to hold the bonds in question.

There is, however, still another error which necessitates a new trial.- The learned trial justice directed a verdict for the plaintiff and thus, as matter of law, dismissed the counterclaim. It is difficult to see upon what principle he refused to submit to the jury the questions of fact, which, by his ruling as to the equity judgment, were left entirely undetermined. When he decided that the judgment was not conclusive upon the plaintiff’s right to hold the bonds as security against any foreclosure of the Hoffman House mortgage, that left the case, for the purposes of that trial, practically as though the judgment were not in existence. The question of the plaintiff’s right to hold the bonds under the contract was then res nova; and indeed the learned justice so treated it. That necessitated the submission to the jury of several questions of fact which seem at this stage of the case to have been entirely overlooked. There was the question as to whether the contract had been abrogated. There was also the question as to whether there had been a breach on the plaintiff’s part of the essential covenant to purchase the stock, and which was the only consideration for the contract. There was the still further- question as to whether the plaintiff had in fact notified the defendant that he would not purchase the stock; that he had determined not to proceed under, or fulfill, the contract; that instead of fulfilling the contract, his purpose was to make another arrangement with Read, whereby he would secure the latter’s West Virginia lands, and thus “get a great deal more money out of it than he could by buying any more stock in the Hoffman House,” and had thereby barred himself from making any claim under the contract. There was conflicting evidence upon all these questions, which, in view of the main ruling, should plainly have been submitted to the jury. If the jury had found that the plaintiff had failed within a reasonable time to purchase the stock, or had made no effort to purchase it, or had refused to purchase it, or had informed the defendant that he would not purchase it — upon all of which questions there was ample evidence for their consideration — it is difficult to see by what right the plaintiff could still hold the bonds under the contract. That would involve the proposition that he could keep them indefinitely. It would be preposterous to hold that he could thus retain for all time-securities which he held as indemnity for a transaction which was to go into operation onty when he purchased the stock, and which newer di(l go unto operation because he never purchased the stock.

We say that the learned justice must have overlooked these questions, for he certainly could not have supposed they were foreclosed by any finding in the equity suit, if the judgment in that suit had in fact been rejected and treated as inconclusive. But, as we have shown, the finding that the contract had not been abandoned was not conclusive as to the non-enforcibility of the contract in any aspect of the equity case. It was not necessary to the judgment, and it related solely to an abandonment by the agreement of the parties, not certainly to an abrogation by a breach of the contract; for the latter was found as a fact in the very judgment which followed this finding of non-abandonment. It is clear, therefore, that the learned justice could not have ruled, as he did, upon the theoiy that while the equity judgment itself was not res adjudicata, the findings which preceded it were. It seems to have been taken for granted by the court, in view of the elaborate discussion as to the conclusiveness of the judgment, that the issue of the trial depended exclusively upon the ruling on that head. We can account in no other way for the refusal to submit the questions of fact which, upon the learned justice’s view of the judgment, were distinctly presented for .the decision of the jury.

There are other exceptions in the record to rulings upon, the admission and exclusion of evidence; but, as they may not arise upon a new trial, we need not now further consider them.

The exceptions should be sustained and a new trial ordered, with costs to the defendant to abide the event.

Barrett and Ingraham, JJ., concurred; Rumsey and McLaughlin, JJ., dissented.