Hunter Tract Improvement Co. v. Stone
109 P. 112, 58 Wash. 661, 1910 Wash. LEXIS 987 (1910)
Rule of Law:
Unless a contract explicitly prohibits assignment or involves personal skill or credit as a material inducement, a general clause referencing 'assigns' permits assignment, and a separate, unintegrated approval clause on an assignment form does not restrict the original contract's assignability.
Facts:
- Mount Baker Park Co. platted a 210-acre tract of land near Lake Washington, known as the Mount Baker addition to Seattle, intending it for first-class residences.
- Mount Baker Park Co. claimed it had promised various lot purchasers that African Americans would not be allowed to buy lots or maintain residences in the addition.
- Marguerite Foy secured a contract to purchase Lot 16 in Block 18 of the Mount Baker addition from Mount Baker Park Co.
- Marguerite Foy assigned her purchase contract for Lot 16 to Susie Stone, who is of the African American race and married to S.H. Stone, also African American.
- The assignment was approved on the back of the contract.
- S.H. Stone and Susie Stone were preparing to commence the erection of a private residence for themselves on Lot 16.
- Mount Baker Park Co. alleged that its approval of the assignment to Susie Stone was induced by a mistake as to the race of Susie Stone and her husband, and that the Stones willfully concealed their race, knowing Mount Baker Park Co. would not approve the assignment to African Americans.
Procedural Posture:
- Mount Baker Park Co. brought an action against S.H. Stone and wife and Marguerite Foy in a trial court (court of first instance) seeking a cancellation of the assignment to Susie Stone.
- The trial court found in favor of the defendants (S.H. Stone and wife and Marguerite Foy) and dismissed Mount Baker Park Co.'s action.
- Mount Baker Park Co. (appellant) appealed the trial court's judgment of dismissal to the Supreme Court of Washington.
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Issue:
Does a real estate contract, which includes 'assigns' in its definition of parties, become non-assignable without the vendor's consent if a separate approval clause is appended to an assignment form, particularly when the vendor's refusal is based on the assignee's race?
Opinions:
Majority - Dunbar, J.
No, a real estate contract including 'assigns' in its definition of parties does not become non-assignable without the vendor's consent due to a separate, unintegrated approval clause on an assignment form, even if the vendor's refusal is based on the assignee's race. The court acknowledged the general principles that parties may prohibit assignment or select with whom they contract, but found these principles inapplicable to the present contract. The contract's eighth clause explicitly provides for assignment, stating: 'Where the words vendor or vendee appear, it is understood to include heirs, assigns, successors or legal representatives.' The court reasoned that unless the contract's language excludes performance by another, or the 'skill, credit, or other personal quality or circumstance of the party was a distinctive characteristic of the thing stipulated for, or a material inducement to the contract,' the contract is assignable. Citing La Rue v. Groezinger, the court rejected speculating on 'possible prejudice or fancied preference' in the absence of explicit contractual intent. The phrase 'This assignment is hereby accepted and approved' appearing on the back of the assignment form was determined not to be part of the original, completed contract and therefore did not bind the parties or restrict the original contract's assignability. It was deemed a provision for novation, intended to release the original contractor and accept the assignee's obligation, rather than a condition for the assignment's validity. Consequently, the appellant's reason for denying approval, whether based on mistake of race or otherwise, was immaterial.
Analysis:
This case affirms the general presumption of contract assignability unless explicitly restricted by clear contractual language or where the contract involves unique personal services or qualities. It provides a crucial distinction between terms integrated into the original contract and subsequent notations on assignment forms, establishing that the latter typically do not alter the former's terms. The decision implicitly limits attempts to use approval clauses as a pretext for discriminatory housing practices by prioritizing established principles of contract interpretation over speculative motivations, thereby contributing to the development of legal safeguards against indirect racial discrimination in property transactions, though not directly ruling on the discrimination itself.
