Cristobal C. Hines v. Joaquin A. Perez

Appellant Hines and appellee Perez entered into a contract on September 29, 1952, whereby Hines was to buy from Perez twenty-five shares of stock of the Island Service Company, Inc., a Guam corporation. Title was to transfer immediately, and the stock was required to be and was delivered to Hines’ attorney. Hines agreed to pay the “actual value” of the shares, as of October 1, 1952.

The contract set up detailed and complicated means and methods of determining this “actual value.” It is unnecessary to go into detail: suffice it to summarize as follows:

Each party designated by name an accountant, and the two were to “jointly audit the books and records” of the corporation.

Accounts receivable were to be valued in accordance with standard accounting methods, and any dispute was to be settled by majority vote of the two accountants and the auditor, Wise-man. Stock in trade was to be computed at delivered cost. Fixtures (other than mechanical fixtures attached to realty) were to be valued at cost, less depreciation, and if dispute arose, the Tax Commissioner of Guam was to be arbitrator. Mechanical fixtures attached to the realty, and rolling stock, were to be valued by appraisers,…

(concurring).

I concur in all that Judge Barnes has said in the foregoing opinion, but I should like to add a statement of a further view which I have respecting the merits of the case.

I agree that appellants are wrong in asserting that there was a failure to perform what they call “conditions precedent” to the obligation to pay for the stock; but it is also my view that these elaborate and involved provisions of the contract relating to a method of determining the value of the stock were not conditions precedent at all. Long ago the Supreme Court of California, in language which has many times since been quoted with approval, observed that a court should not construe the stipulations of a contract as conditions precedent unless compelled by the language of the contract to do so since such a construction would often prevent the court from doing justice between the parties.

Immediately upon the execution of the contract, the certificates for the stock were delivered to Hines. By the time the suit was started two and one-half years had elapsed during which Hines had had himself elected president and had carried on the management of the corporation and many changes had been…

242 F.2d 459 Cristobal C. HINES, Appellant, v. Joaquin A. PEREZ, Appellee. No. 15078. United States Court of Appeals Ninth Circuit. Jan. 29, 1957. E. R. Crain, Agana, Guam, Thomas M. Jenkins, San Francisco, Cal., for appellant. Spiegel, Turner & Stevens, Santa Monica, Cal., for appellee. Before POPE, CHAMBERS, and BARNES, Circuit Judges. BARNES, Circuit Judge. 1 Appellant Hines and appellee Perez entered into a contract on September 29, 1952, whereby Hines was to buy from Perez twenty-five shares of stock of the Island Service Company, Inc., a Guam corporation. Title was to transfer immediately, and the stock was required to be and was delivered to Hines' attorney. Hines agreed to pay the 'actual value' of the shares, as of October 1, 1952. 2 The contract set up detailed and complicated means and methods of determining this 'actual value.' It is unnecessary to go into detail: suffice it to summarize as follows: 3 Each party designated by name an accountant, and the two were to 'jointly audit the books and records' of the corporation. 4 'After said joint audit has been completed, Robert Wiseman shall review said audit and shall attempt to reconcile any differences that may have…