Sayward v. Houghton

BEATTY, C. J., dissenting.

I dissent from the order denying a rehearing of this case. As I construe the complaint it shows that Houghton purchased the stock for himself and merely gave plaintiff’s intestate an option to purchase it from him upon payment within six months of fifty thousand dollars, with interest, *551and a bonus of five thousand dollars. There was no advance of money to Sayward by way of loan and no personal obligation o-n the part of Sayward to pay Houghton anything. He merely bargained for an option to purchase.

For granting this option Houghton received a valuable consideration in being allowed at Sayward’s request, and for his con-: tingent benefit, to purchase the stock at a price below its real or -estimated value. This consideration was sufficient to support Houghton’s agreement granting the option, and Sayward’s election to purchase and offer to perform, if made at any time within six months, would have supplied the element of mutuality necessary to warrant a decree of specific performance, if in other respects the contract was enforceable.

But if the action is one for specific performance (and I can regard it in no other light), the most serious question arises out of the fact that the intestate did not during his lifetime make his election to purchase, and the plaintiff, as administrator, has assumed to make it for him. He has, in other words, without any authority, so far as appears, from heir or creditor or the probate court, undertaken to bind the estate to pay Houghton fifty thousand dollars, with interest, and a bonus of five thousand dollars more in exchange for his stock. And, unless he has given Houghton the right to claim so much out of the assets of the estate in preference to creditors and heirs, the option has not been exercised—the estate is not bound, and if the estate is not bound Houghton is not bound. There must be mutuality of obligation when the action is commenced. To hold, therefore, that this is a case for specific performance would be to hold that an administrator of his own motion can appropriate the assets of an estate to the performance of an agreement to purchase resting in the option of his intestate, a doctrine to which the court should hesitate to commit itself.

The point made by respondent that the agreement set out in the complaint is within the statute of frauds (Civ. Code, sec. 1739) does not arise upon the demurrer, because it does not appear from the complaint that the agreement was not in writing. If, however, it was merely oral, and was, as I construe it, merely an agreement to sell, it was within the statute.

Heither does the objection that plaintiff’s remedy is at law for *552damages rather than in equity for specific performance arise on this general demurrer for want of facts. It is certainly doubtful whether—aside from the objections above referred to—the complaint states a ease for equitable relief, but if those objections-are unfounded it does state a cause of action.