Lead Opinion

WOODS, Circuit Judge,

after making tlie foregoing statement, delivered tlie opinion of the court.

The substance of the case is that the appellant and others, who subscribed the agreement of July 16, 1894, entered into a scheme for ihe consolidation of the water power of the Wisconsin river at the cities of Grand Rapids and Centraba under the single ownership and control of a corporation, to be created for the purpose, to which the individual owners should convey their respective titles and interests; that to that end they executed the agreement mentioned, believing that the several signers each owned the properties described as his in the schedule appended to the agreement, and that, taken together, those properties included all the shore lands, riparian rights, and water power intended to he included in and necessary to the accomplishment of the scheme; that the corporation was formed, and the complainant and three others of the signers executed conveyances. as stipulated, but that the two Nashes, objecting to the award of the arbitrators, had refused to take further part with the signers of the articles of incorporation of the proposed company; that a suit against them to compel conveyance according to the-agreement had failed, and would not be renewed; that the names of corporate subscribers were signed to the agreement, and the conveyances of their respective properties to the eonrpany were made without authority except such as tlie officers had by virtue of their offices without direct corporate action on the subject; that one who sub*874scribed as administrator of an estate had in that capacity no authority to sign or convey, and had never conveyed; that some of the subscribers did not own and /could not convey the properties or some of the properties scheduled in their names; that all the properties scheduled did not include all the lands, riparian rights, and privileges, and all the water power necessary to the accomplishment of the scheme; that the agreement was signed by all the parties under mistakes of fact, as stated; that the conveyance by the complainant was executed only for the purpose, if possible, of carrying out the scheme, in the hope that other subscribers would voluntarily proceed, and that, if necessary, others would be persuaded to join therein; but that the corporation had done nothing to that 'end.

Much discussion has been expended upon the nature of the writing of July 16, 1894, the appellant calling it an open offer or proposition, to be submitted to a corporation thereafter to be organized, while, on the other hand, it is insisted that it was from the date of signing a binding- agreement that required no further ratification or acceptance. The question is not of such importance that the discussion need be followed. As between the signers, the document constituted an agreement according to the terms and conditions expressed, while in respect to the contemplated corporation it was only an offer or proposition which the corporation, when organized, might accept or reject, and by which, without acceptance, it could not be bound. The signers of the agreement did not thereby bind themselves to organize a corporation, but did contract, each with the others, in fulfillment of the project defined in the preamble of the agreement, to convey his property to the corporation which should be formed under the name and for the purpose stated, and to accept in payment therefor his proportionate share of the capital stock as determined by the arbitrators named. Stated more briefly, the case is that, if the scheme from the beginning was not impossible without the co-operation of others, nothing has been done or now can be expected to be done in its accomplishment according to the original and unchanged design. The averments of the bill are explicit, and the agreement itself declares with equal clearness, that the purpose was to consolidate and improve the water power of the two cities "upon the one general plan with reference to the value of the whole water power”; and, on the facts as alleged, an express provision in the agreement that it should be enforced against none unless against all would afford no better basis for an appeal to a court of equity. That intention is not less clear than if explicitly stated in the agreement. It is not a .question of consideration. There was sufficient consideration for the signing of the agreement by each in the signing thereof by the others, and the relief sought is to be granted not for a technical failure, in whole or part, of the consideration on which the contract was ■signed, but for the impossibility of the scheme which it was pro-' posed to inaugurate. The rule that parol evidence may not be admitted to vary a written agreement is not applicable. The facts alleged accord with the agreement. The acceptance by the corporation of the proposition embodied in the agreement bound the subscribers only on condition that the declared purpose of the agreement could *875and should be accomplished, and, once the corporation proved unable, or failed for an unreasonable time, to proceed as contemplated, the subscriber, in the absence of an estoppel or dominating equity to the contrary, had a right to withdraw.

Something is sought to be made of the averment of the bill to the effect that the parties conducted their preliminary negotiations negligently, and entered into the agreement without careful inquiry into the facts of the situation and the feasibility of the scheme; but, from the very nature and purpose of the agreement and the relation of the signers to each other, it is evident that the rules against laches or negligence in the execution of ordinary contracts by parties standing in all respects at arm’s length do not apply. The bill shows the failure and inability of the corporation to enter upon the execrn tion of the scheme proposed, and it hardly need be said that relief is not sought or to be granted because the project, after inauguration and trial, had not proved successful or profitable; nor on the theory that a stockholder can withdraw from a corporation once established because it has ceased to be successful. It appears from the bill that with a knowledge of the refusal of the Nash brothers to co-operate further with the incorporators, the complainant and others executed conveyances of their respective properties to the corporation, and it is urged that “by taking these steps they bound themselves irrevocably to join this corporation.” What reason is there for the assertion? If true, then for what purpose, and under what new agreement, and with whom, wTas it proposed to proceed? It was, of course, competent for the other parties, or any of them, after the* refusal of the Nashes to go on, to proceed independently; but did they? It is not so averred, and the contrary could not be alleged more distinctly or unequivocally. It would have required a new agreement, or at least a modification of the existing one, neither of which is left to possible inference. On ihe contrary, immediately after the announcement by the Nashes of their position, the other signers of the articles of incorporation, with an evident purpose to abide by and to enforce the original contract in its integrity, passed the resolution to accept the contract and to ratify the award, and promptly instituted suit to compel the Nashes to convey. It was after the adoption of that resolution that the complainant and others executed the conveyances of their respective properties; and, even if the bill were silent on the point, the inference of fact, if not the legal presumption, would be clear that they executed their deeds with a purpose to perform the contract, in the expectation that the other signers would do or be compelled to do likewise, and not in pursuance of any modified agreement or scheme, which, it is shown, could not accomplish the original design, or be in itself successful without the Nash properties.

The action is not, in substance, one for dissolving and winding up the corporation. The complainant was not an original corporator,, and his recovery of the legal title to his property does not involve a termination of the corporate life, or of the prosecution of the business defined in the articles of incorporation. Other parties, it seems, desire to keep the corporation going, and with that desire the court need not interfere; but there is no good reason for allowing it tó re*876tain, the .title to the complainant’s property when the purpose for which it was obtained has been abandoned or cannot be accomplished; The cancellation' of the complainant’s deed and the reconveyance of the property to him will, of course, extinguish whatever right to stock in the corporation he might have or assert. If there has been expense incurred which ought to be a charge against the complainant or his land, the decree may require payment. Equity rule 9á, it is clear, has no application to the case. The decree of the circuit court is reversed, with direction to overrule the demurrer to the bill, and to proceed in accordance with this opinion.

Dissenting Opinion

JEHKIHS, Circuit Judge

(dissenting). I have greatly doubted, and still doubt, whether the bill exhibits a case which requires the defendants to answer. It has seemed to me that the action of the complainant in subscribing to the stock of the corporation and in conveying the land in pursuance of the agreement and in acceptance of the award, after the Hashes, to his knowledge, had refused to accept the award, or to participate further in the organization of the corporation, at least in the absence of a proper and an excusing explanation, amounted to an election to proceed with the others in the scheme without the participation of the Hashes. I have been unable to find in the pleading any explanation of the complainant’s action that- is satisfactory to my mind, but, as my brethren think otherwise, and the question is merely one of pleading, and the matter may come before us upon proofs, and possibly in a more satisfactory manner, I deem it unnecessary at this time to give further expression of my views.