A contract in writing, by which a mining company agrees to sell
and deliver lead ore from time to time at the smelting works of a
partnership, to become its property upon delivery and to be paid
for after a subsequent assay of the ore and ascertainment of the
price, cannot be assigned by the partnership without the assent of
the mining company so far as regards future deliveries of ore. Nor
is the mining company, by continuing to deliver ore to one of the
partners after the partnership has been dissolved and has sold and
assigned to him the contract, with its business and smelting works,
estopped to deny the validity of a subsequent assignment by him to
a stranger.
This was an action brought by a smelting company, incorporated
by the laws of Missouri, against a mining company, incorporated by
the laws of Maine, and both doing business in Colorado by virtue of
a compliance with its laws, to recover damages for the breach of a
contract to deliver ore made by the defendant with Billing and
Eilers and assigned to the plaintiff. The material allegations of
the complaint were as follows:
On July 12, 1881, a contract in writing was made between the
defendant of the first part and Billing and Eilers of the second
part by which it was agreed that the defendant should sell and
deliver to Billing and Eilers at their smelting works in Leadville
ten thousand tons of carbonate lead ore from its mines at Red Cliff
at the rate of at least fifty tons a day, beginning upon the
completion of a railroad from Leadville to Red Cliff, and
continuing until the whole should have been delivered, and that
"all ore so delivered shall at once upon the delivery thereof
become the property of the second party," and it was further agreed
as follows:
"The value of said ore and the price to be paid therefor
Page 127 U. S. 380
shall be fixed in lots of about one hundred tons each -- that is
to say, as soon as such a lot of ore shall have been delivered to
said second party, it shall be sampled at the works of said second
party and the sample assayed by either or both of the parties
hereto, and the value of such lots of ore shall be fixed by such
assay; in case the parties hereto cannot agree as to such assay,
they shall agree upon some third disinterested and competent party,
whose assay shall be final. The price to be paid by said second
party for such lot of ore shall be fixed on the basis hereinafter
agreed upon by the closing New York quotations for silver and
common lead, on the day of the delivery of sample bottle, and so on
until all of said ore shall have been delivered."
"Said second party shall pay said first party at said Leadville
for each such lot of ore at once, upon the determination of its
assay value at the following prices,"
specifying, by reference to the New York quotations, the price
to be paid per pound for the lead contained in the ore, and the
price to be paid for the silver contained in each ton of ore,
varying according to the proportions of silica and of iron in the
ore.
The complaint further alleged that the railroad was completed on
November 30, 1881, and thereupon the defendant, under and in
compliance with the contract, began to deliver ore to Billing and
Eilers at their smelting works, and delivered 167 tons between that
date and January 1, 1882, when
"the said firm of Billing and Eilers was dissolved, and the said
contract and the business of said firm, and the smelting works at
which said ores were to be delivered, were sold, assigned, and
transferred to G. Billing, whereof the defendant had due
notice;"
that after such transfer and assignment, the defendant continued
to deliver ore under the contract, and between January 1 and April
21, 1882, delivered to Billing at said smelting works 894 tons;
that on May 1, 1882, the contract, together with the smelting
works, was sold and conveyed by Billing to the plaintiff, whereof
the defendant had due notice; that the defendant then ceased to
deliver ore under the contract, and afterwards refused to perform
the contract, and gave notice to the plaintiff that it considered
the contract
Page 127 U. S. 381
cancelled and annulled; that all the ore so delivered under the
contract was paid for according to its terms; that
"the plaintiff and its said assignors were at all times during
their respective ownerships ready, able, and willing to pay on the
like terms for each lot as delivered, when and as the defendant
should deliver the same, according to the terms of said contract,
and the time of payment was fixed on the day of delivery of the
'sample bottle,' by which expression was, by the custom of the
trade, intended the completion of the assay or test by which the
value of the ore was definitely fixed,"
and that
"the said Billing and Eilers, and the said G. Billing, their
successor and assignee at all times since the delivery of said
contract, and during the respective periods when it was held by
them respectively, were able, ready and willing to and did comply
with and perform all the terms of the same so far as they were by
said contract required, and the said plaintiff has been at all
times able, ready, and willing to perform and comply with the terms
thereof, and has from time to time since the said contract was
assigned to it so notified the defendant."
The defendant demurred to the complaint for various reasons, one
of which was that the contract therein set forth could not be
assigned, but was personal in its nature, and could not, by the
pretended assignment thereof to the plaintiff, vest the plaintiff
with any power to sue the defendant for the alleged breach of
contract.
The Circuit Court sustained the demurrer and gave judgment for
the defendant, and the plaintiff sued out this writ of error.
Page 127 U. S. 387
MR. JUSTICE GRAY, after stating the facts as above, delivered
the opinion of the Court.
If the assignment to the plaintiff of the contract sued on was
valid, the plaintiff is the real party in interest, and as such
entitled, under the practice in Colorado, to maintain this action
in its own name. Rev.Stat. § 914; Colorado Code of Civil Procedure
§ 3;
Albany & Rensselaer Co. v. Lundberg, 121 U.
S. 451. The vital question in the case therefore is
whether the contract between the defendant and Billing and Eilers
was assignable by the latter, under the circumstances stated in the
complaint.
At the present day, no doubt, an agreement to pay money or to
deliver goods may be assigned by the person to whom the money is to
be paid or the goods are to be delivered if there is nothing in the
terms of the contract, whether by requiring something to be
afterwards done by him or by some others stipulation, which
manifests the intention of the parties that it shall not be
assignable. But everyone has a right to select and determine with
whom he will contract, and cannot have another person thrust upon
him without his consent. In the familiar phrase of Lord Denman,
"You have the right to the benefit you anticipate from the
character, credit, and substance of the party with whom you
contract."
Humble v. Hunter, 12 Q.B. 310, 317;
Winchester v. Howard, 97 Mass. 303, 305;
Ice Co. v.
Potter, 123 Mass. 28;
King v. Batterson, 13 R.I. 117,
120;
Page 127 U. S. 388
Lansden v. McCarthy, 45 Mo. 106. The rule upon this
subject, as applicable to the case at bar, is well expressed in a
recent English treatise:
"Rights arising out of contract cannot be transferred if they
are coupled with liabilities, or if they involve a relation of
personal confidence such that the party whose agreement conferred
those rights must have intended them to be exercised only by him in
whom he actually confided."
Pollock on Contracts (4th ed.) 425.
The contract here sued on was one by which the defendant agreed
to deliver 10,000 tons of lead ore from its mines to Billing and
Eilers at their smelting works. The ore was to be delivered at the
rate of fifty tons a day, and it was expressly agreed that it
should become the property of Billing and Eilers as soon as
delivered. The price was not fixed by the contract or payable upon
the delivery of the ore. But, as often as a hundred tons of ore had
been delivered, the ore was to be assayed by the parties or one of
them, and if they could not agree, by an umpire, and it was only
after all this had been done, and according to the result of the
assay, and the proportions of lead, silver, silica, and iron
thereby proved to be in the ore, that the price was to be
ascertained and paid. During the time that must elapse between the
delivery of the ore and the ascertainment and payment of the price,
the defendant had no security for its payment except in the
character and solvency of Billing and Eilers. The defendant
therefore could not be compelled to accept the liability of any
other person or corporation as a substitute for the liability of
those with whom it had contracted. The fact that upon the
dissolution of the firm of Billing and Eilers and the transfer by
Eilers to Billing of this contract, together with the smelting
works and business of the partnership, the defendant continued to
deliver ore to Billing according to the contract did not oblige the
defendant to deliver ore to a stranger to whom Billing had
undertaken, without the defendant's consent, to assign the
contract. The change in a partnership by the coming in or the
withdrawal of a partner might perhaps be held to be within the
contemplation of the parties originally contracting, but however
that may be,
Page 127 U. S. 389
an assent to such a change in the one party cannot estop the
other to deny the validity of a subsequent assignment of the whole
contract to a stranger. The technical rule of law, recognized in
Murray v. Harway, 56 N.Y. 337, cited for the plaintiff, by
which a lessee's express covenant not to assign has been held to be
wholly determined by one assignment with the lessor's consent, has
no application to this case.
The cause of action set forth in the complaint is not for any
failure to deliver ore to Billing before his assignment to the
plaintiff (which might perhaps be an assignable chose in action),
but it is for a refusal to deliver ore to the plaintiff since this
assignment. Performance and readiness to perform by the plaintiff
and its assignors, during the periods for which they respectively
held the contract, is all that is alleged; there is no allegation
that Billing is ready to pay for any ore delivered to the
plaintiff. In short, the plaintiff undertakes to step into the
shoes of Billing and to substitute its liability for his. The
defendant had a perfect right to decline to assent to this and to
refuse to recognize a party with whom it had never contracted as
entitled to demand further deliveries of ore. The cases cited in
the careful brief of the plaintiff's counsel as tending to support
this action are distinguishable from the case at bar, and the
principal ones may be classified as follows:
First. Cases of agreements to sell and deliver goods for a fixed
price, payable in cash on delivery, in which the owner would
receive the price at the time of parting with his property, nothing
further would remain to be done by the purchaser, and the rights of
the seller could not be affected by the question whether the price
was paid by the person with whom he originally contracted or by an
assignee.
Sears v. Conover, 3 Keyes 113, 4 Abb. (N.Y.App.)
179;
Tyler v. Barrows, 6 Robertson (N.Y.) 104.
Second. Cases upon the question how far executors succeed to
rights and liabilities under a contract of their testator.
Hambly v. Trott, Cowper 371, 375;
Wentworth v.
Cock, 10 Ad. & El. 42, 2 Per. & Dav. 251; Williams on
Executors (7th ed.) 1723-1725. Assignment by operation of law, as
in the
Page 127 U. S. 390
case of an executor, is quite different from assignment by act
of the party, and the one might be held to have been in the
contemplation of the parties to this contract although the other
was not. A lease, for instance, even if containing an express
covenant against assignment by the lessee, passes to his executor.
And it is by no means clear that an executor would be bound to
perform, or would be entitled to the benefit of, such a contract as
that now in question.
Dickinson v. Calahan, 19 Penn.St.
227.
Third. Cases of assignments by contractors for public works, in
which the contracts, and the statutes under which they were made,
were held to permit all persons to bid for the contracts, and to
execute them through third persons.
Taylor v. Palmer, 31
Cal. 240, 247;
St. Louis v. Clemens, 42 Mo. 69;
Philadelphia v. Lockhardt, 73 Penn.St. 211;
Devlin v.
New York, 63 N.Y. 8.
Fourth. Other cases of contracts assigned by the party who was
to do certain work, not by the party who was to pay for it, and in
which the question was whether the work was of such a nature that
it was intended to be performed by the original contractor only.
Robson v. Drummond, 2 B. & Ad. 303;
Waggon Co. v.
Lea, 5 Q.B.D. 149;
Parsons v. Woodward, 22 N.J.Law
196.
Without considering whether all the cases cited were well
decided, it is sufficient to say that none of them can control the
decision of the present case.
Judgment affirmed.