158 Wis. 122 | Wis. | 1914
Lead Opinion
The plaintiff brought this suit for dissolution and winding up of the affairs of an alleged copartnership between himself and thirty-one defendants. Eighteen of these defendants appeared in the action in person or by attorney. Others defaulted or were not served with process. No copartnership was proven. No objection was made on the ground of lack of equity jurisdiction and the case is before us on its merits. Edmonds and Grell appeal from a judgment in favor of their codefendant Lorenze and against them for upwards of $6,000, and Lorenze appeals from the same judgment, claiming only that sufficient damages were not allowed to him. All other parties acquiesce in the judgment of the court below by not appealing and not joining in either appeal. By the judgment all of the notes were ordered to be returned to the subscribers. One J. A. Ryan had paid cash and he was awarded a judgment against Lorenze for $1,216.39; Lamb was awarded a like judgment for $3,642; Halverson for $80; and it was further decreed that Ryan and Lamb have each a lien to the amount of his allowance against Lorenze upon the judgment in favor of Lorenze and against Edmonds and Grell. The two appeals may be considered together.
The facts found by the circuit court together with the undisputed facts which are not all covered by the findings may be set forth as follows: On May 1, 1909, J. P. Malick and Abraham Lorenze 'secured from Messrs. J. O. Terrell and Edward Roos of Tesas a contract for the sale by the latter to the former of about 72,000 acres of land in Brewster county, Texas, part at $1 and part at $1.20 per acre, paid down $4,000, and agreed to pay $16,000 additional upon the execution and delivery of a bond for title from the vendors, and this bond for title was to be executed upon the acceptance of the title by the vendees after an abstract of title was fur
“It is distinctly understood that the subscribers do not incur any other liability than the amount set opposite our names and that we assume no other obligation than this.”
It is also provided that as soon as a sufficient amount was subscribed to insure the first payment of $25,000, then a company should be organized and incorporated to take over the lands above mentioned at’the purchase price of not less than $2 per acre. There was in fact no first payment of $25,000 to be made. This remarkable document states the quantity of land to be about 12,000 acres and the price to he $1.50 per acre, which would make the cost $108,000, or $111,600 with the five cents per acre for expenses. The total subscriptions procured were only $53,000 at most, according to the subscription agreement only one quarter of these, or $13,250, was payable in cash, and the liability of each signer was limited to the amount subscribed by him. The land was to be turned over to a corporation at $2 per acre after a sufficient amount was subscribed to insure the payment of $25,000, and there is no provision that the subscribers should
On or about November lOtb Lorenze sent out notices to tbe subscribers in the name of Malick calling a meeting of said subscribers at tbe office of tbe “syndicate” in tbe Majestic Building in Milwaukee for November 18, 1909. He also sent out proxies with these notices, to be signed by each subscriber who could not attend, appointing Lorenze attorney in fact for such subscriber at-said meeting with broad powers. Tbe meeting was accordingly held. A small number of the subscribers attended. Tbe defendant Grell was present but Edmonds was not, be having signed one of tbe proxies to Lorenze. It was apparent to all that neither tbe vendees nor tbe subscribers, nor both together, bad funds or resources with which to meet tbe payment of $16,000, much less tbe $25,000 specified -in tbe subscription agreement. No one seemed to have any very clear idea of bow much money was on hand? or bow much was required or whether tbe payment to be made was $25,000 or $20,000 or $16,000. Proposed articles of incorporation of a Texas corporation authorized to go into tbe business of cattle ranching and bold and deal in land necessary for that purpose were submitted by Burke and approved. These were not executed by any person except Lorenze, and tbe names of tbe other incorporators were blank. In attempted conformity with tbe laws of Texas, however, a paragraph in these proposed articles of incorporation stated tbe names of tbe directors for tbe first year and named Ed-monds, Lorenze, Grell, and Lamb as Wisconsin members, and it was testified to without contradiction that tbe name of tbe necessary Texas member or members should be inserted after tbe committee hereinafter mentioned reached Texas. Tbe meeting was organized by tbe election of a chairman and secretary, and tbe secretary kept what be called minutes of the meeting, which state that “it was moved by Mr. Grell
It must be observed here that these minutes are not true. Arrangements had not been completed. Mr. Edmonds was not present and had not given his assent to act as director oí-as committeeman or to go to Texas or to advance money or to borrow money for this purpose. The expected money lender had not yet given his consent to loan any money, and the financing of the enterprise in its then desperate condition could not be considered a simple matter except by a very simple person. Erom the fact that they arranged to borrow $10,000 we may infer that they thought they had either $6,000 or $10,000 or $15,000 on hand. In fact they had nothing but the notes of some of the subscribers. Oral testimony is given to the effect that it was not at this meeting decided whether the land should be conveyed to a corporation or to three trustees. This was to be decided after the committee got to Texas. But no one could be made trustee without his consent, no one had yet consented, the trustee would have to assume heavy obligations, a fact they did not seem to know, and it was extremely doubtful whether the corporation, even by calling itself a cattle company, could hold lands in
“Well, the transaction had to be closed on the 6th of December. They were going down at some future time. At that meeting there was no designated time that they were to go, but it was understood and stated at the meeting that more money would have to be raised. There was not sufficient at that first meeting, and the idea was principally at that meeting to get in more money, and this committee was when they were done, was to go down and close up the transaction. . . . Mr. Grell stated as long as there was necessity for quick action and as long as some of these subscriptions were not coming in there should be two notes executed ... I think the notes were signed that night. . . . And these notes were to be used at a subsequent meeting . . .”
These are the two notes of $5,000 each, one- of which was expected to be indorsed and discounted by Mr. Lorenze and ' one by Mr. Edmonds. Manifestly there was up to this point no contract made between the subscribers and the persons who were to go to Texas upon which any liability of the latter could be predicated. The next meeting was held November 29, 1909. The purpose of this meeting was to see what finances had been gotten together. Mr. Edmonds was present at this meeting and he was told that he had been selected for president, refused to accept it, told of the necessity of borrowing money and what was expected of him with reference to the $5,000, and that he was expected to go to Texas as a member of this committee and malee this payment on the land contract. Tie accepted the agency, but, instead of dis< counting the $5,000 note and raising money on it, took $5,000 of his own funds and went to Texas with the other members of the committee. The substance, therefore, of the agreement arising from this transaction between the subscribers present at the meeting through those who communicated it to
It is very difficult from his testimony to tell how much money he had with him in Texas. He, or Malick for him, must have had still more than $20,000 in notes of subscribers on hand, but did not or could not use them. The evidence tends to show that he had with him about $9,'000, the proceeds of notes sold or cashed by him and including money of his own in the form of checks and drafts. The vendors declined to receive‘private checks. A telegram to Wisconsin elicited the information that Shoemaker had stopped payment on his checks for $1,980. This diminished the funds that Lorenza had by about $2,000. It left the whole, counting Edmonds’s $5,000, Qrell’s $2,000, and the remaining available funds of all kinds in Lorenzo’s hands, $2,000 short of the requisite $16,000 for making the payment then due. They found an agent to whom the vendors owed $2,000 commission, and this agent agreed to take Lorenzo instead of the vendors as his debtor for this amount, the vendors agreed, to accept this $2,000 waiver as part of the $16,000 payment, and the drafts carried by Qrell and Edmonds were turned over to Lorenzo to be by him handed to the vendors as and for the first payment. These with what "money and checks Lorenzo had left amounted to only $14,000. Mr. Qrell at this stage demanded back his $2,000. This was immediately followed by a demand on the part of Edmonds for his $5,000. Much acrimonious discussion followed, and the vendors returned to Lorenzo and Lorenze returned to Qrell and Ed-monds their drafts. The contract was at an end and the $4,000 initial payment was declared forfeited.
Tbe learned circuit court held that Edmonds and Grell, by demanding back their drafts and refusing to proceed with tbe purchase, breached a contractual duty due to all the subscribers, including Lorenze, assumed or agreed to by them when they undertook to serve on tbe committee which was to go to Texas and close up the land purchase. This may be looked at from the standpoint of law or equity. At'law the duty of an agent, employee, or committeeman is to exercise good faith and diligence and exert himself in his employment for the benefit of his principal or master, but he malms no agreeJ ment to achieve absolute results.' He is not required in order to achieve a result to incur heavy personal obligations for the benefit of an irresponsible principal. Noble v. Libby, 144 Wis. 632, 129 N. W. 791. He may like other parties to a contract withdraw from a contract because of a serious breach by the other party thereto. Lorenze, representing himself and the other subscribers, committed a serious breach in failing to have present and ready for payment on the contract such sum that, with the contribution of Grell and Edmonds,
This view of the case disposes of the appeals by reversal upon the Grell and Edmonds appeal and by Lorenze taking nothing on his appeal. We cannot admit his right of recovery for damages or for. disbursements. But there is another aspect of the case. Lorenze, acting for the subscribers who had given notes and for himself, sold the notes of two of the subscribers, J. A. Ryan and J. R. Lamb, which were given for their subscriptions, and received the avails of such sales, and the makers were obliged to pay the notes. It was provided in the judgment appealed from that J. A. Ryan on this account have judgment against Lorentfe for $1,216.39, and Lamb a judgment against the same appellant for $3,642. It was further decreed that said Ryan and Lamb each had and each was given a lien upon the judgment which Lorenze recovered against Grell and Edmonds to the amount of their respective judgments against Lorenze aforesaid. This judgment of Lorenze against Edmonds and Grell we are constrained to reverse, and that leaves Ryan and Lamb unprovided for to the extent that they were protected by the decree below. The two latter apparently signed the subscription list after Edmonds did and Edmonds was apparently going in upon the same level as his fellow subscribers, but in fact
It is considered, therefore, that the judgment be reversed upon the appeal of Edmonds and Grell, that Lorenze take nothing by his appeal, and that the defendants <T. A. Ryan and J. R. Lamb and any other defendant who has paid cash upon his subscription be permitted to file a cross-complaint against the plaintiff and all their codefendants who have been served with process or who have appeared in this action for the purpose of recovering from each such proportion of the loss sustained by such cash-paying subscribers as the subscription of that subscriber bears to the whole amount of subscriptions by persons who have been served with process or appeared in this action, and also to make such claim against their codefendant Edmonds on account of fraud as they may be advised. But one satisfaction to be allowed.
By the Court. — It is so ordered. One bill of costs by Ed-monds against Lorenze only.
Concurrence Opinion
(concurring). I agree to wbat bas been decided, with this qualification: By the subscription paper which was signed the subscribers agreed to pay a certain percentage of their subscription in cash and to give their notes for the balance. I think that by signing the subscription paper all of the subscribers became equally bound as between themselves to make contribution, if a right of contribution exists, and that if the proceeding suggested in the opinion is resorted to all of the subscribers should be brought in in the cross-complaint and all should be compelled to contribute their pro rata share of the amount necessary to place Eyan and Lamb on a basis of equality with the other subscribers. I do not think that the subscribers who breached their agreement by failing to give their notes should be relieved of liability because of their breach. Of course if the judgment against Lorenzo is collectible, no such proceeding as is indicated is necessary.
The appellant Qrell moved for a rehearing. On October 7, 1914, the mandate was amended so as to award costs in favor of Edmonds and Qrell against the defendant Lorenze.