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McCONKEY v. PEACH BOTTOM SLATE CO.
(Circuit Court of Appeals, Fourth Circuit. May 28, 1895.)

No. 111.
CONTRACTS-ASSENT.

Plaintiff, in February, 1889, received from defendant corporation an option to purchase its real estate and other property, which was extended from time to time, but not acted on. On April 19, 1890, plaintiff received from defendant a new agreement, in consideration of $2,000 already paid, and $3,000 to be paid in 30 days, to sell to him defendant's property at any time within 6 months from April 7, 1890, at the price previously agreed on, of which the $7,000 was to form a part. It was the understanding of the parties that, if plaintiff did not take the property within the 6 months, the $7,000 should be forfeited. Within the 6 months plaintiff verbally notified defendant that he had arranged to procure the necessary capital, and would be ready to take the property, but before the expiration of the time some of the capitalists interested withdrew, and plaintiff was unable to, and did not, take the property or give a binding acceptance of the option. The option was not renewed, but plaintiff coutinued his efforts to obtain capital to buy the property, and was aided and encouraged to do so by the officers of defendant, until July, 1892, when plaintiff had secured the necessary capital, but a difference had arisen between plaintiff and defendant as to the forfeiture of the $7,000, and plaintiff made no offer in the precise terms of the option of April 19, 1890, until September 13, 1892, when it was declined. lleld, that the defendant was not bound, after the expiration of the option, to sell the property to plaintiff, and that no binding contract between the parties ever came into existence.

In Error to the Circuit Court of the United States for the District of Maryland.

This was an action by Charles R. McConkey against the Peach Bottom Slate Company to recover $7,000, alleged to have been paid under a contract broken by the defendant. The circuit court gave judgment for the defendant. Plaintiff

Plaintiff brings error. Affirmed. Alfred S. Niles and Oscar Wolff, for plaintiff in error. H. Arthur Stump and James P. Gorter, for defendant in error,

Before GOFF and SIMONTON, Circuit Judges, and SEYMOUR, District Judge.

GOFF, Circuit Judge. The plaintiff below, a citizen of the state of Pennsylvania, sued in assumpsit, in the circuit court of the United States for the district of Maryland, the defendant, a corporation and citizen of the state of Maryland. In his bill of particulars filed with his declaration, which contains the common counts only, the plaintiff claims from the defendant the sum of $7,000, money paid by plaintiff to defendant on account of contract to purchase the property of defendant, situate in Harford county, Md., which contract, it was claimed, had been broken and rescinded by the defendant. The general issue and the statute of limitations were pleaded by defendant. The case was tried to a jury, which, under the direction of the court, at the close of the evidence, returned a verdict for defendant. The plaintiff thereupon prayed for this writ of error, assigning as error the refusal of the court below to give certain instructions asked for by the plaintiff, and the direction by the court that the jury return a verdict for defendant

The testimony tended to show the following facts: That nego tiations were entered into by plaintiff and defendant for the sale and purchase of defendant's property. That on February 15, 1889, a paper was executed which was as follows:

"Memorandum of a proposal of sale made this fifteenth day of February, in the year eighteen hundred and eighty-nine, by the Peach Bottom Slate Company, of Harford county, Maryland, to Charles R. McConkey. The said the Peach Bottom Slate Company, of Harford county, in consideration of the sum of sixty-five thousand dollars ($65,000.00), hereby agrees to sell to the said Charles R. McConkey, or his assigns, all the real estate now held by said company, together with the improvements, fixtures, machinery, and tools now located thereon or used in connection with the business of said company; payments to be made as follows: Thirty-five thousand dollars ($35,000.00) in cash upon the delivery of a good and sufficient deed for said property, and thirty thousand dollars ($30,000.00) within five years thereafter, with interest at five per cent., payable semiannually; the creilit payment to be sei'urel by mortgage on the property so sold. And the said corporation further agrees that at the time of the delivery of said deed the holders of the stock of said corporation shall deliver to said McConkey or his assigns all the capital stock thereof, to wit, one thousand shares of the par value of one hundred doilars each, announting to one hundred thousand dollars, saying and reserving to said shareholders all the slate then on the bank, and all the debts due said company; said stockholders to pay all existing liabilities of said corporation. This offer to remain open for acceptance by said McConkey or his assigns until April 15th, in the year 1889, and unless accepted before said date shall be utterly null and void. In testiinony whereof, the president of the said the Peach Bottom Slate Company, of Harford county, has hereto set his hand and affixed its corporate seal duly attested by the secretary thereof the day and year above written. “[Seal.]

Richard Rees, Pres't.

"John Humphrey, Sect'y. "For and in consideration of one dollar, paid by Charles R. McConkey, the receipt of which is hereby acknowledged, the Peach Bottom Slate Company, of Harford county, hereby agrees to extend the time for acceptance of the foregoing offer from April 15th to May 15th, 1889. In testimony whereof the president of the said the Peach Bottom Slate Company, of Harford county, has hereto set his hand and affixed its corporate seal, duly attested by its secretary, this eighteenth day of March, A. D. 1889. “[Seal.]

Richard Rees, Pres't.

"John Humphrey, Sect’y. “And, further, for and in consideration of one dollar paid by Charles R. McConkey, the receipt of which is hereby acknowledged, the Peach Bottom Slate Company, of Harford county, hereby agrees to extend the time for ac. ceptance of the foregoing offer by said Charles R. McConkey or his heirs and assigns until December 20th, 1889, and unless accepted before that time shall be utterly null and void. In testimony whereof the president of the said the Peach Bottom Slate Company has hereto set his hand and affixed its corporate seal, duly attested by the secretary thereof, this 14th day of October, 1889.

"Richard Rees, President.

"John Humphrey, Sect’y. “And, further, for and in consideration of one dollar paid by said Charles R. McConkey, the receipt of which is hereby acknowledged, the Peach Bottom Slate Company, of Harford county, hereby agrees to extend the time for acceptance of the foregoing offer by said Charles R. McConkey or his heirs and assigns, until February the 6th, 1890, and unless accepted before said time shall be utterly null and void. In testimony whereof the president of the said the Peach Bottom Slate Company, of Harford county, has hereto set his hand and affixed its corporate seal, duly attested by the secretary thereof, this 21st day of December, 1889. "[Seal.)

Richard Rees, President. “John Humphrey, Secretary."

$

-That plaintiff was to secure other parties to furnish all or part of the purchase money mentioned in said option, and was to receive a commission of 5 per cent if the sale was made under it. That before February 15, 1889, plaintiff had secured an option upon a certain piece of land called the “Coleman Tract” (adjacent to the defendant's property, the slate vein then being worked by defendant extending into said Coleman land), the same being in the following words, viz.:

"Lebanon, Pa., December 17, 1888. "Mr. Charles R. McConkey, Peach Bottom, Pa.-Dear Sir: Confirming conversation of last week, I agree to sell to you or your assigns our Harford county slate tract for eleven thousand seven hundred dollars ($11,700.00). This offer to remain open until June 1st, 1889, after which date it becomes void. "Yours, truly,

Robt. H. Coleman." -That plaintiff, after securing these options, endeavored to interest people in the same, and to raise the money required to pay for them so that they could be worked together. That defendant's option was renewed from time to time until February 6, 1890, without being accepted. That in the fall of 1889 the agreement as to commissions was changed so that plaintiff was to have $5,000 as commissions, provided he raised the money and took the property. That on February 8, 1890, the following paper was executed, viz.:

"Received, Delta, Pa., February 8th, 1890, from Charles R. McConkey one thousand dollars on account of the purchase money to be paid under an agree ment between the Peach Bottom Slate Company, of Harford county, and the said McConkey, bearing date February 15th, 1889, and upon the payment of one thousand dollars additional, on or before February 20th, inst., and the balance of the cash payment specified in said agreement on or before April 7th, 1890, and have the credit payment fully secured, as specified in said agreement, the Peach Bottom Slate Company, of Harford county, hereby agrees to sell, transfer, and deliver to said McConkey or his assigns all the real estate held by said company, with the improvements, fixtures, machinery, and tools located thereon, together with the capital stock thereof, to wit: one thousand shares of the par value of one hundred dollars each, amounting to one hundred thousand dollars, according to the terms of said agreement. In the event of said McConkey or his assigns failing to make payments as aforesaid, then the Peach Bottom Slate Company, of Harford county, reserves the right to declare the payments already made forfeited to it, and this agreement null and void. In testimony whereof the president of the said the Peach Bottom Slate Company, of Harford county, has hereto set his hand and affixed its corporate seal, attested by the secretary thereof the date above written. “[Seal.]

Richard Rees, President. "John Humphrey, Secretary.

"Delta, Pa., Feby. Sth, 1890. "Received from Charles R. McConkey one thousand dollars, as above stated. “$1,000.

John Humphrey, Treas." -That the second payment called for was paid, and following receipt given, viz.:

“Delta, Pa., Feby. 20th, 1890. “Received from Charles R. McConkey one thousand dollars for second payment as stated in the foregoing agreement. “$1,000.

John Humphrey, Treas." - That the $2,000 mentioned in said receipts was actually paid on the dates specified. That about 12 days after that option had expired the following agreement was entered into:

“This agreement, made and concluded by and between the Peach Bottom Slate Company, of Harford county, Maryland, hereinafter called the party of the first part, and Charles R. McConkey, of York county, Pennsylvania, hereinafter called party of the second part, witnesseth: That the said party of the first part, for and in consideration of the sum of two thousand dollars in hand paid, by the said party of the second part, at or before the execution hereof, the receipt whereof is hereby acknowledged, does hereby grant to said party of the second part, his heirs and assigns, an option for six months, from and after the seventh day of April, A. D. 1890, to purchase all the real estate now held by said company in Harford county, Maryland, together with the improvements, fixtures, machinery, and tools now located thereon, or used in connection with the business of said company, under the name of the 'Peach Bottom Slate Company of Harford county. And the party of the second part does hereby agree to pay to the party of the first part hereto the further sum of five thousand dollars, within one month from the 7th day of April, A. D. 1890. And the said party of the first part does further covenant and agree by these presents that in case the said party of the second part does within the said time of six months from and after the 7th day of April, A. D. 1890, exer cise his right of option, and agree to take and accept the said land and property, then upon the further payment of the sum of twenty-eight thousand dollars ($28,000.00) lawful money to be paid upon the execution and delivery of the conveyance hereinafter mentioned, the said party of the first part does hereby, for itself, its successors and assigns, covenant and agree to grant and convey to the said party of the second part, his heirs and assigns, the said described land and property, when requested so to do, and shall deliver a proper, good, and sufficient deed in fee simple therefor, and upon the delivery of said deed, the party of the second part hereby agrees to make, execute, and deliver, or cause to be made, executed, and delivered, to the party of the first part hereto, a first mortgage on said property, in the sum of thirty thousand dollars ($30,000.00), payable within five years from the date thereof, with interest on said sum at the rate of five per centum per annum, payable semiannually, with the right to anticipate all or any part of said thirty thousand dollars, which shall be duly credited on said mortgage; the said land and property to be free from all incumbrances when conveyed by the party of the first part hereto, and title thereto to be good and merchantable and of record, and the examination of title and the preparation of deed to be made by the said party of the second part, and to be prosecuted with due diligence from and after his determination to take and accept the said land and property. Witness the hands and seals of the parties hereto, dated this 19th day of April, A. D. 1890. “[Seal.]

The Peach Bottom Slate Company, of Harford County,

"By Richard Rees, Pres. "Charles R. McConkey. [Seal.] "Attest:

"John Humphrey, Secty. "Witnesses:

“M, H. Houseman.

"W. F. Walworth." - That the two previous payments were accepted as part of the consideration mentioned in that agreement, and that nothing was said at that time about forfeiting said payments, but that they were considered as payments on the purchase money. That nearly a week subsequently to April 19th, plaintiff, at the request of Mr. Humphrey, the secretary of the company, wrote and signed the following paper:

Delta, Pa., April 19, 1890. "To Whom it may Concern: I do hereby declare and affirm that in the matter of a certain agreement this day concluded between the Peach Bottom Slate Company, of Harford county, as party of the first, and myself as party of the second, part, it is fully understood, and I hereby consent, that in the event of

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the failure to avail myself of the option to purchase the property on the 7th day of October, 1890, as therein agreed, all payments made prior to said 7th day of October, 1890, shall be forfeited to the said Peach Bottom Slate Company, of Harford county, Maryland.

Chas. R. McConkey." —That the $5,000 payment was made May 7, 1890, as appears by the following receipt, the draft mentioned therein being paid in due course:

"Received, Delta, Pa., May 7th, 1890, from Chas. R. McConkey, a draft on W. F. Walworth, of Cleveland, Ohio, for five thousand dollars, which, when paid, will be in full for payment of this date as per agreement of April 19th ult. "$5,000.

John Humphrey, Treas. Peach Bottom S. Co. of H. Co." —That under the agreement of April 19, 1890, plaintiff continued his efforts to obtain the balance of the purchase money, and some time in June or July, 1890, he notified Mr. Rees, the defendant's president, and Mr. Humphrey, its secretary, that he had succeeded in getting people to subscribe the necessary money to the stock of a corporation which was to be formed and organized for the purpose of buying and operating the defendant's property and the Coleman tract, and that he would be ready to take the property. That he then employed an attorney to examine the title to the property, and that subsequently the defendant and its stockholders executed a deed for its property, mentioned in the option, conveying the same to the plaintiff on the terms therein stated, but that such deed was never delivered. That about the time such deed was ready, plaintiff told defendant's president that some of the parties who were to have joined him in the purchase had dropped out, and the matter would be delayed somewhat, but that he would go to work and get others, to which said president replied: "Go to work and get others." That plaintiff endeavored to get others to take the place of the parties who had dropped out, and continued so to do to the kpowledge of defendant's officers until July, 1892. That in the spring of 1891 plaintiff prepared a prospectus, of which there were several copies, one of which he showed to defendant's president, and that it read as follows:

“The Old Peach Bottom Slate Company, of Harford county, a corporation, chartered in Maryland, with an authorized capital of $150,000, has secured 77 acres of valuable slate lands in Harford county, Maryland, containing very extensive deposits of slate, from which are made the celebrated 'Peach Bottom Roofing Slates,' in quality unexcelled by any in the world. The lands are located on the line of the Baltimore & Lehigh Railroad, near the borough of Delta, Pa., about half way between the cities of Baltimore and York. There is a quarry in successful operation, with a good equipment of machinery, producing five thousand squares of rooting slate annually, which can be increased to from thirty to fifty thousand squares, if desired, and operated for many years without exhausting the supply. An increase of the product to only three times its present proportions will enable the company to pay large dividends on its capital stock, from the profit in the manufacture. The properties cost $77,000, of which there inay remain for five years at five per cent. interest $30,000; requiring to pay for lands $17.000. It is proposed to secure a full paid capital, $75,000, of which, after payment of lands, $17,000, there will remain $28,000, for additional machinery and working capital for an enlarged operation. About two-thirds of the capital stock has been subscribed by parties in the neighborhood in blocks of from one to ten thousand dollars

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