GILES tI. PAXSON.
283
testify that they heard the whistle. but thought it was the whistle givingnotice of the approach to the town of Clinton, as it was about the place where such whistle is usually sounded. It is very natural that they should have reached this conclusion. It was the business of the engineer to sound the whistle; and he must be presumed to know more the purpose of sounding it·. than anyone else. The fael about that he was the employe of the defendant is not a sufficient reason fo'l disregarding the weight to be given to his testimony. Besides, the man corroborates him in the statement that he sounded the alarm and. reversed the engine. There is a difference in the testimony of Simpso:Q. the only witne8S on the part of petitioner, who says he witnessed tho accident, and the engineer, as to whether the animal. was running along the track or crossing it when the killing occurred. The undisputed fact. that she was cut in two parts about the middle of her body is stron!t corroborative evidence that she was crossing the track. A careful COD, sideration of the testimony on both sides satisfies me that the petitionnr has not made out, by the proof, a case entitling him to damage as alleged in bis petition. As the case is a novel one, he will not be tll.xed with the defendant's costs, but will pay all the other costs, and hill tion will be dismissed.
GILES '0. PAXSON
et al.
(O£rcutft Oourt, N. D. Iowa, E. D. Ootober 29, 1889.) VBNDOR AND VENDEE-Co:S-TRACT8-I'ERFORlIIANCE.
Under a contraotfor the purchase of an interest in real estate, to the ·arger part of wl:J,ich titles were admitted to be imperfect, reserving to the the privIlege of makjng "a further investigation of the condition of the propeny aforesaid, andU, upon such examination, it is not found satisfactory, and that the representations as made by the parties of the first part are substantially correct, the said purchaser has the privilege of declaring said contract null and vOId" by giving notice within a certain time, it is for the purchaser alone to determine whether he shall complete the purchase, and his right to refuse to complete it is not a1fected by any action of his in pursuance of another and independent provision of the same contract, that all of the parties thereto shall have the option of taking a pro rata share of land subsequently purchased by any of them.
At Law. Action on contract. Adam8 & Mathew8, for plaintiff. H. O. Noyea and Ed. P. Seeda, for defendants. SHffiAS. J. On the 17th day of January. 1887, the parties to this action entered into a contract in writing touching the purchase by plaintiff of anundivided one-third interest in certain lands in the states of Missouri ,and Arkansas, in which the defendants were interested. The contract sets forth at considerable length descriptions of the various tracts ofJandiritended to be included within {he contract; averring that "the said parties of the first part claim ownership to about 22,533 acres of
284'
FEDERAL REPORTER,
vol. 40.
of purchasing an undivided one-third interest in all said above-described lands and interests, as owned by said parties of first part, (with exceptions set forth and reserved,) for the sum of eleven thousand dollars. now, therefore, it is mutually agreed by all parties hereto that said purchase and sale be made, and the same is hereby consummated, SUbject to the privilege given said Giles to make a further investigation of the conditions of the property aforesaid, and also of the titles thereto. And if, upon such examination, it is not found satisfactory, and that the representations as made by the parties of the first part are substantially correct, then said 'Giles has the privilege of declaring said contract null and void by giving notice in writing to W. Henry Williams, of Chicago, or to said Charles Paxson, at Manchester, Iowa, by registering said notice at Chicago post-office, or personal notice of his (the said Giles') intention to make void this said contract. in which case said first parties hereby promise and agree to repay to said Giles any and all moneys paid by him on this contract, with interest at six per cent. per annum after May 15. 1887, wi thin 90 days after May 15, 1887. If said Gill'S. on or before said 15th day of May, 1887, decides to consummate this purchase, he shall then give due notice, and shall make in addition to the payment of ($5.000) five thousand dollars at the time of signing and delivering this contract, the receIpt of which is hereby acknowledged by plJrties of the first part, the further sum of six thousand dollars in cash on or before July 1,1887, and then a full conveyance or assignment shall be made by the parties of the first part bereto to the said second party of a full undivided one-third interest of the lands and interests herein referred to in Arkansas and Missouri; it being understood that any expense and care in the management of said estate and disbursements made in perfecting titles to the same shall be chargeable and, paid by parties iIi interest in proportion to their several interests at the time of consummating this wntract. It is also agreed, in the event of further pUl'chases of interests in Arkansas by any of the parties hereto. it shall be at the option Of all parties to take a pro rata share in the same at net cost. All offers for the ptlrchase of any lands herein referred to must be consented to by all par.parties of the first part agree to furnish abstracts of perties hereto. fected titles, and other evidences of title,· to the aforesaid land to the party of the second part· within 90 days, In witness whereof," etc.
land, as perfected titles, and to a.bout 39,694 acres more, the titles to which are subject to tax and other conditions, regarding which effort is now being made to perfect and determine agllinst adverse claims." After certain Jands not intended to be included in the sale, the contract further provides that"Whereas, the said William A. Giles, party of the second part, is desirous
By mutual agreement, the time allowed Giles for examining the titles and condition of the lands was subsequently extended until June 20, 1887. The defendants furnished to the plaintiff, for his examination, certain abstracts of title-deeds, and other evidences of the state of the titles, and the plaintiff went to Arkansas for the purpose of examining the lands;' and on or about the 18th of June, 1887, he gave notice, by sending a registered letter to Charles Paxson, that he had concluded not to complete the purchase, and, he also demanded the repayment of the $5,000. The other parties refusing to repay this sum, this action was brought for the recovery thereof. . The right of plaintiff to reCOver turns upon the construction to be placed upon the contract reserving to Giles the privilege of making in..
GILES V. PAXSON.
285
touching the lands, and the titles thereto, and, if not found satisfactory, to then declare the contract at an end. The position oftha plaintiff is that the contract made him the judge of the acceptability of the titles; so that his determination, made within the time allowed him for examination, and duly notified to the other "'arties, would either make the contract binding or terminate it. On part of the defendants, it is insisted that the plaintiff is bound to show a sufficient reason for his alleged dissatisfaction; or, in other words, that the plaintiffcannot terminate the contract at his own pleasure, but can do so only if good ground exists for refusing to carry it out, or that, if the facts show that he ought to be satisfied, the law holds that he is satisfied. There can be no question that as to certain kinds of contracts the rule contended for by defendants is applied. Thus, if one is induced to expend money or labor in the production of some article, or in the improvement of another's property, under a contract which binds him to do the work in a satisfactory manner, the one party cannot ordinarily retain the benefit of what has .been done, and yet repudiate the obligation to pay therefor by merely claiming that the contract has not been performed in a manner satisfactory to him. If the work or labor has been reasonably performed, according to the terms of the contract, it is held that the party is bound to be satisfied therewith because he has received all he contracted for. So, in sales of real estate, if a party contracts to sell a p;iven piece of realty. and to convey a good and satisfactory title, the colllract is met if the title conveyed is sufficient, and the vendee cannot nullify the contract by claiming that he is not satisfied, or by alleging frivolous exceptions to the chain of title. The rulings in these and similar classes of cases go upon the principle that the contracts of the parties must be reasonably construed; and, so construing them, it is held that all the one party has the right to demand of the other is such a performance of the contract as is reasonable, in view of the subject of the contract. If, however, the contract is so drawn that it is plain that it was the intent of the parties that the test of fulfillment should be the judgment of one of the parties, there is no reason why such a contract should not be held binding. It is so expressly held in regard to contracts to furnish articles to serve or gratify personal convenience, taste, or the like. Suppose an artist contracts to paint a portrait or other picture" and it is expressly agreed that the other party shall not be compelled to accept the picture unless it is entirely satisfactory to him. By such a contract the artist undertakes that he will furnish a picture satisfactory to the other party, and the latter cannot be compelled to take it unless he is satisfied with it. So, if A. contracts to sell a horse to B. for an agreed price, it being stipulated that B. shall have the right to drive the animal for a given period, and then, if he is not satisfied with him, he can return the horse and terminate the contract, certainly B. cannot be compelled to keep the horse unless he is satisfied with him. In each case the question is, what is the true construction of the contract? Taking into account the 8U bject of. the contract, and the relation of the parties thereto, and construing the language of the contract in the light
I
286
FEDERAL. R1i:P.O:RTER,
trial; whether he is satisfied t()complete the purchase,oortaitlly the courts cannot refuse to enforce theaweement as the parties. have: made it· . What, then, is the construction to be pJaced upon the contract signed by the parties to the present action ? It appears that the defendants were speculating in lands in Missouri and Arkansas. They claimed that they had perfected. the titles to about 22,533 acres, and claimed the ownership Of some 39,694 acres additibnal,.tbe titles to which were yet unsettled. !talso appears that it WAS their. purpose to continue the business of buying up tax and other titles to other lands, and to seH the same at a profit. The busineSB was llot that of buyinglands for cultivation and improvement,but that of buying and selling with a view to a money profit. It was proposed that the plaintiff should become interested in these purchases to the extent of taking an .undivided one-third share, paying therefor the sum of $11,000. The interest to be acquired by Giles, and the amount to be paid therefor, were agreed upon; but there was reserved to Giles the privilege of making "a further investigation of the ('ondition of the property aforesaid, and also the titles thereto; and if, upon such examination, it is not found satisfactory, and that the representations as made by the parties of the first part are substantially correct, then said Giles has the pl'ivilege of declaring said contract null and void,» etc.; it being further provided that, in case he concluded to complete the contract of pur-chase, he should give notice thereof to the other parties. When this paper was signed, in effect it conferred upon Giles the right to become a purchaser of an undivided interest in the' lands named. From the recitals of the paper, it is apparent that Giles had not fully committed himself to the. purchase. but had reserved to himself the right to make further· investigation into the condition of the lands, and the titles thereto. Counsel for defendants admit that Giles was not absolutely bound, and that, if sufficient reason therefor existed, he had the right to refuse to proceed further, and to recover back the money already paid; but their contention is that it was not for Giles to determine finally the question whether the condition of the property and the titles was or was not satisfactory, but that he was bound to be satisfied if the condition of the property-: and titles. upon examination, were found to be such that he ought to.have been satisfied. The time within which Giles was to make the investigation, and determine whether he would nullify or complete the proposed purchase, was limited in the contract. He was required to make the investigation, and reach a conclusion thereon, within a given time, and to give llotice thereof to the other parties. No criterion for reaching the conclusion, nor tribunal for deciding it, other than Giles' own judgment. is provided in the contract; and hence it is clear'thatit must have been the intent of the parties. to leave the decis-. ion of the question to Giles' own judgment. It is urged in argument that the principle should be applied that, if Giles .ought to have been satisfied,.the law will hold him bound. The facts of the ease show that it would be impossible·toapply this princi-
one party shall have the right to.decide, after a furthetexamJnationor
thull ·thl'own· thereon, if it is clea.rthat the parties haJve' agreed,· that the