John G. Williams vs. Joseph E. Patrick

Massachusetts Supreme Judicial Court1900-11-27

177 Mass. 160

Summary · law.co

Holding. The judgment for the defendant was reversed, and the exceptions were sustained, because the jury should have been permitted to find that the defendant waived the requirement of tendering an assignment of the stock, based on evidence that the defendant previously refused the stock and declared it worthless.

This case involves a dispute over a stock transaction where the plaintiff sought to recover money he had paid to the defendant. The parties' contract could be interpreted either as giving the plaintiff an option to treat the transaction as a loan (with the stock as collateral) or as a conditional sale requiring the plaintiff to tender the stock assignment before demanding repayment. The trial court directed a verdict for the defendant based solely on the plaintiff's failure to tender the stock assignment by the specified date.

The appellate court found that the plaintiff presented credible evidence that the defendant had waived the requirement of a formal tender. The plaintiff testified that he had previously offered the stock to the defendant in early 1899, at which time the defendant refused it, stated it was worthless, and ordered the plaintiff away. The plaintiff also testified he feared the defendant and would not approach him again. Under these circumstances, the court concluded that the defendant's own statements—declaring the stock worthless and refusing to accept it—effectively waived any requirement for a subsequent formal tender, and the jury should have been allowed to consider this question rather than having the verdict directed against the plaintiff.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a formal tender of stock is required before a buyer must return money paid under a conditional sale contract
Whether a party may waive the right to require tender by prior statements refusing the stock
Whether evidence of fraud in the corporation and worthlessness of the stock affects the tender requirement

Procedural posture

The trial court directed a verdict for the defendant, and the plaintiff appealed by sustaining exceptions to that directed verdict.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Knowlton, J.

The material facts in this case are almost id&itical with those in Boynton v. Woodbury, 101 Mass. 346, in which it was held that the contract was, in legal effect, to give the plaintiff an option for a year to treat the transaction as a loan, with collateral security, to be repaid on a return of the stock, or to treat it as an absolute sale. In that case it was held that a notice to the defendant within a year of the plaintiff’s election to have his money back was sufficient to entitle the plaintiff to maintain the action without a tender of the stock, provided he kept the stock in his possession and was ready to reconvey it up to the time of the trial, and then offered to re-convey. Perhaps the decision of the present case might rest on this as an authority.

But if we construe the contract more strictly, and hold that it was an agreement by the defendant to purchase on tender of an assignment of the stock, there was evidence from which the jury might have found for the plaintiff. As we understand the case, the verdict was directed for the defendant solely on the ground that the plaintiff failed to tender an assignment of the stock on April 8, 1899. The right to a tender before payment was for the benefit of the defendant, and he might waive it. There was evidence that the corporation was founded on fraud, and that the stock was worthless from the time it was issued. The plaintiff testified that in February or March, 1899, he called at the defendant’s “ place of business in Boston and tendered the stock, . . . and demanded a return of his money. That the defendant refused to take said stock, declared that it was worthless, that he did not want it, and in a threatening tone ordered the plaintiff off his premises, and told him never to darken his doors again.” He also testified “ that he was afraid of the defendant, and that he would not dare go near him.”

Other evidence that the stock was never of any value, and that for a long time prior to the expiration of one year from the date of the contract it was considered and treated by the defendant and Carpenter as worthless, was offered by the plaintiff and excluded. The plaintiff’s testimony, taken in connection with this evidence, would have well warranted the jury in finding that tender of an assignment of the stock at the end of the year was waived by the defendant. Peebles v. Boston & Albany Railroad, 112 Mass. 498. Andrews v. Knowlton, 121 Mass. 316. Nashua & Lowell Railroad v. Page, 135 Mass. 145. Williams v. Kimball, 135 Mass. 411. Papineau v. Wentworth, 136 Mass. 543.

The defendant’s statement was equivalent to a declaration that he would refuse the stock if a tender was subsequently made, and that it would be useless to make a tender of it. Under these circumstances the jury should have been permitted to find that a subsequent tender was waived. See Gilmore v. Holt, 4 Pick. 258; Southworth v. Smith, 7 Cush. 391; Hazard v. Loring, 10 Cush. 267; Hills v. Exchange Bank, 105 U. S. 319; Ashburn v. Poulter, 35 Conn. 553; Barker v. Parkenhorn, 2 Wash. C. C. 142.

Exceptions sustained.