I dissent. The judgment in this case awards to the plaintiff, as the executrix of the estate of her deceased husband, William Y. Hulen, the sum of $2,000, being the amount of the agreed purchase price of twenty shares of the capital stock in a corporation, upon the mere breach on the part of the defendant of his agreement to purchase said stock, with nothing in the record to show either that title to the stock had passed to and vested in the defendant, or that the said sum of $2,000 was the difference between the contract price of the stock and the amount realized upon a sale thereof pursuant to the provisions of section 3049 of the Civil Code, or between such contract price and its market value at or within a reasonable time after the breach.
In this state the measure of damages for the breach of a buyer's agreement to pay for personal property is laid down in sections 3310 and 3311 of the Civil Code, and the provisions of those sections make no distinction between shares of stock in a corporation and goods or commodities forming the subject of general commerce.
The first of those sections reads as follows: "The detriment caused by the breach of a buyer's agreement to accept *Page 573 and pay for personal property, the title to which is vested in him, is deemed to be the contract price."
As above stated, there is no evidence in the record that the title to the stock in question ever vested in the defendant. On the contrary, an actual tender being excused by the announced inability or refusal of the defendant to take and pay the price thereof, the stock was retained by Hulen for some two years, when he died, and by his executrix for another two years, when this action was brought. During that period Hulen was elected a director of the corporation; a change of control occurred by the coming in of new stockholders, who purchased a large majority of the stock, paying its full par value. At that time the defendant, if by any act or suggestion on the part of Hulen he had been apprised that Hulen regarded the title to these twenty shares as having passed to and vested in him, could have disposed of the same at an advantageous price. Thereafter the corporation became involved in financial difficulties and its stock became practically worthless. Then, for the first time and some two years after the breach by the defendant, Hulen attempted by private sale to dispose of the stock, but without success. Another two years passed, and the plaintiff, as the executrix of Mr. Hulen, now deceased, renewed the attempt, with a similar result. These attempts to dispose of the stock at private sale may be taken as conclusive that the plaintiff or her predecessor did not consider that title thereto had vested in defendant, since in that event such a sale would have constituted a conversion of the stock (Bennett v.Potter, 16 Cal.App. 183 [116 P. 681]). It seems clear, therefore, that the plaintiff was not entitled to recover from the defendant the contract price of the stock upon the theory that the title thereto had vested in said defendant.
This brings us to the measure of damages prescribed by section 3311 of said code. That section provides:
"The detriment caused by the breach of a buyer's agreement to accept and pay for personal property, the title to which is not vested in him, is deemed to be:
"1. If the property has been resold, pursuant to sec. 3049, the excess, if any, of the amount due from the buyer under the contract over the net proceeds of the resale; or *Page 574
"2. If the property has not been resold in the manner prescribed by sec. 3049, the excess, if any, of the amount due from the buyer under the contract over the value to the seller . . ."
It is apparent that Hulen or the plaintiff, being still in possession of the stock, could have proceeded under the first subdivision of this section and have sold the stock in the manner provided for in the sale of a pledge, and have brought suit for the difference, between the amount realized at such sale and the contract price. This neither of them attempted to do. The plaintiff is therefore relegated to the second subdivision of said section for her measure of damages, which is "the excess, if any, of the amount due from the buyer under the contract over the value to the seller"; and this "value to the seller" is defined by section 3353 of the Civil Code to be "the price which he could have obtained in the market nearest to the place at which it should have been accepted by the buyer and at such time after the breach of the contract as would have sufficed with reasonable diligence for the seller to effect a resale." As a matter of fact the plaintiff seems to have adopted as her measure of damages the one prescribed in said subdivision 2, since in praying for judgment for $2,000 she alleges in her complaint that the stock has, and at the time of the breach of the contract had, no value — an allegation which would be entirely superfluous in a complaint for the recovery of the contract price. Moreover, at the trial she introduced evidence of the market value of the stock, attempting to show that it had no value. It may be conceded that had she established the worthlessness of the stock at the time indicated in said section 3353 of the Civil Code, namely, "at such time after the breach of the contract as would have sufficed with reasonable diligence for the seller to effect a resale," the amount of the judgment given in her favor could not be questioned; but the fact is that the only evidence of market value offered by the plaintiff referred to a time two years and four years after the breach. On the other hand, as already indicated, the record contains evidence introduced by the defendant that a few months after the breach of the contract many shares of this stock changed hands at a price of $100 per share; that such sum was its market value, and that the *Page 575 assets of the corporation would have warranted even a higher price. This evidence was competent to establish market value (Moffitt v. Hereford, 132 Mo. 513 [34 S.W. 252]); it was uncontradicted and unimpeached; and the finding of the trial court that the stock was valueless at that time is in plain disregard of such evidence and demands a reversal of the judgment.
The prevailing opinion seems to proceed upon the theory either that title to this stock passed to the defendant by the mere demand of Hulen that defendant take the stock as agreed, or that the plaintiff was entitled in any event to recover the contract price.
That in this state a person making a tender in performance of an obligation must by some act indicate to the person to whom performance is due that he intends to pass title to the thing offered necessarily results from the terms of section 1502 of the Civil Code, which provides: "The title to a thing duly offered in performance of an obligation passes to the creditorif the debtor at the time signifies his intention to thateffect." The intent of the seller with respect to passing title when he makes a tender is a question of fact. (Clark v. Rush, 19 Cal. 393; Todd v.Lyon, 55 Cal.App. 67 [202 P. 899].) The intent of the seller to pass title to the buyer does not inevitably, or at all, follow from a mere tender. A tender, without more, indicates that the seller offers to pass title pursuant to the terms of the contract. If the contract provides that payment is to be made upon delivery, then the tender implies that the title is to pass concurrently with the payment of the purchase price by the buyer, but not otherwise. (Hewes v.Germain Fruit Co., 106 Cal. 441 [39 P. 853];Katzenbach v. Breslauer, 51 Cal.App. 756 [197 P. 967].)
In the case at bar the necessity of some action on the part of Hulen to signify his intention that title to the stock should pass to the defendant is emphasized by the fact that there was in fact no tender. Even if an actual tender had been made it was still incumbent upon Hulen, in order to comply with the section of the Civil Code last quoted, to signify at that time his intention to pass title.
The prevailing opinion disposes of the question of the passage of title, upon which turns the all-important question *Page 576 of the measure of damages, by the statement that "The ultimate fact was the amount, if anything, due plaintiff from defendant by reason of his refusal to repurchase the stock. This the court ascertained and found from the evidence, and necessarily included the whole controversy." But the court's determination of the amount due from the defendant to the plaintiff was based upon its finding that the stock from the inception to the end of the transaction was valueless, and this finding is not only unsupported by the evidence, but is directly opposed to it. In fact, it appears to me to have been inadvertently made, since it is not confined to the time to which the evidence of the worthlessness of the stock was addressed, namely, two and four years after the breach of the contract, but includes the time at which the original purchase was made by plaintiff's testator, and other times when the stock was changing hands for its par value, as to which times not even the plaintiff introduced any evidence that it was not worth the price at which it was being bought and sold. And it is not necessary to say that this court is not concluded by a finding which is entirely unsupported by the evidence.
Nor is the question of rescission involved in the case, as seems to be suggested in the prevailing opinion. The defendant's obligation was to purchase from the plaintiff's testator stock which the latter had acquired directly from the corporation. In a case where a party to a contract is entitled to rescind, all parties, when the rescission is duly effected, are restored to their former status, which includes their relation to the title to the property, so that in a case where a formal tender is excused the title would pass without it. Otherwise in a case, such as the present, of the breach of an executory contract for the sale and purchase of personal property.
I conclude, therefore, that there being no evidence in the record of any act on the part of the plaintiff or her testator vesting title to the stock in question in the defendant, and the finding of the trial court that the said stock was without value being based exclusively upon evidence relating to a period too remote from the breach of the contract, and the record containing ample evidence upon which to base a finding that said stock had a market value of $100 per share at a time material to the controversy, the finding in plaintiff's *Page 577 favor is against the evidence, and cannot support the judgment.
Myers, J., concurred.
Rehearing denied.
Myers, J., dissented.