Consol. Water-Power Co. v. Nash

• Decision Date: 19 March 1901
• Citation: 85 N.W. 485,109 Wis. 490
• Parties: CONSOLIDATED WATER-POWER CO. v. NASH. NASH v. CONSOLIDATED WATER-POWER CO.
• Court: Wisconsin Supreme Court

109 Wis. 490

85 N.W. 485

CONSOLIDATED WATER-POWER CO.

v.NASH.

NASH

v.CONSOLIDATED WATER-POWER CO.

Supreme Court of Wisconsin.

March 19, 1901.

Appeal from circuit court, Wood county; O. B. Wyman, Judge.

Action by the Consolidated Water-Power Company against Thomas E. Nash. From a judgment modifying an award of arbitrators and decreeing specific performance both parties appeal. Reversed.

This suit, brought by the plaintiff to compel specific performance by the defendant of a contract to convey certain lands and water power in the Wisconsin river, near Grand Rapids, presented substantially the following facts, either undisputed or found by the court upon sufficient evidence: In 1894 various interests in lands, riparian easements, and water powers existed in the vicinity of Grand Rapids and Centralia, which, however, utilized but a part of the power of the water there flowing, of which further utilization and development was also obstructed by the conflicting rights of different owners. On July 16th of that year some eight or ten of these owners had prepared a written agreement reciting the belief “that the water power at said cities would be of more value if consolidated and improved upon one general plan with reference to the value of the whole water power,” and declaring that they agreed with each other to convey all their respective interests in lands, riparian rights, and water power, including dams, mills, mill machinery, and personal property, specified in schedule, to a corporation to be formed and to be called Consolidated Water-Power Company, “and to take in consideration of such conveyance and for the same such share in the stock of said corporation as shall be apportioned to each of us by a board of arbitrators on account of our respective separate interests and ownership in said lands, riparian rights, and water power, and other property above specified.” Then followed a description of the property and the names of the arbitrators, and the contract continued: “We agree to abide by the decision of said board of arbitrators, and to take such amount of stock in said corporation as such board shall award to each of us on account of our conveyance of our interest in said properties. * * * The conveyance to be made in execution of this agreement shall be made when called for by the company to be formed. * * * The said board of arbitrators shall place a separate valuation upon the water wheels, shafting, machinery, and mill buildings, and personal property of each of the undersigned, not including the foundation.” Each was to have option to remove such property within a limited time, “the same to be kept by him at the valuation fixed upon the same by the board of arbitrators.” The proposed agreement concluded: “This agreement shall not be binding upon either or any of the parties thereto until it is signed and executed by the following named persons and corporations, to wit, W. E. Mack and C. A. Spencer, Thomas E. Nash and John L. Nash, B. G. Chandos and B. G. Chandos, as administrator of the estate of Marian L. Bensley, deceased, the Wisconsin Wood-Pulp Company, the Grand Rapids Water-Power Company, and the Pioneer Wood-Pulp Company, F. MacKinnon, and C. A. Spencer; and when so signed and executed the same shall be binding upon each and every one of said parties and their respective legal representatives, heirs, successors, and assigns.” This writing was signed by all the individuals mentioned in said last paragraph, and to it were subscribed the names of the Wisconsin Wood-Pulp Company, by W. E. Mack, secretary, and C. A. Spencer, president, Grand Rapids Water-Power Company, by C. A. Spencer, secretary, and F. MacKinnon, president, and Pioneer Wood-Pulp Company, by F. MacKinnon, secretary, and George E. Hoskinson, president; such signatures being made by the respective officers without any authority from the stockholders of the respective corporations in meeting, and without any authority from directors of the Grand Rapids Water-Power Company. On July 28th following a number of the signers of that agreement executed formal articles of incorporation of the Consolidated Water-Power Company, and caused the same to be filed, and a certificate to be procured from the secretary of state; but no further steps were presently taken towards organizing or launching such corporation. On February 13, 1895, the above-named arbitrators called together all of the individuals whose names are subscribed to the agreement of July 16, 1894, and announced their award, together with the basis on which the same had been made. At that time the defendant and his brother, John L. Nash, who was then associated with him in the ownership of the property now in litigation, being dissatisfied both with the result of the said award and with the conduct of the arbitrators, announced that they withdrew from the agreement of July 16, 1894, and would proceed no further with it. Notwithstanding this announcement, an attempt was made on the 20th of February to hold a meeting of all of the subscribers to that agreement as a meeting of stockholders to organize the plaintiff corporation, notice being served on defendant and his brother. They attended at the time of that meeting, and reiterated their declaration that they repudiated and withdrew from the agreement of July 16, 1894, whereupon they left the room, and thereafter had no participation in any further proceedings of the plaintiff corporation or of its members. Quite immediately thereafter attempted subscriptions to the capital stock of the plaintiff corporation by the other signatories were had, and attempted conveyances of the various parcels of real estate, the conveyances by the three signatory corporations being executed without express authority of any stockholders' meeting. At some later date--apparently without formal action--the capital stock of the plaintiff, which was issuable to these three corporations, was distributed among their stockholders except as to one stockholder in the Pioneer Wood-Pulp Company, to whom none was ever distributed, and who is not shown to have participatedpersonally in any of the proceedings. The title of the property of the Bensley estate never was attempted to be transferred by the administrator, but under a mortgage foreclosure judgment standing against it a sale was made, and property bid in by a stranger to the record, and by him conveyed to the plaintiff, and stock issued to him therefor. On June 15, 1895, suit was commenced by the plaintiff against the defendant and his brother, John L. Nash, for specific performance, and to compel conveyance of their property in accordance with the agreement of July 16, 1894. On the trial of that action it transpired that the title to the Bensley estate property was incomplete, and the plaintiff, on the 30th day of October, 1895, took a judgment of nonsuit without prejudice. Thereafter attempts were made to perfect the Bensley title, which terminated as early as June 29, 1897. No intimation was given to the defendant or his brother of a purpose to insist further on their liability to convey their property. On the 18th of April, 1899, the defendant purchased his brother's half interest therein for $9,500. On June 17, 1899, the mill and machinery were destroyed by fire, and insurance to the extent of $5,500 paid to the defendant, and he was negotiating for the erection of a paper-bag factory on the property, when he was interrupted by the commencement of the present action. Additional facts relevant to the questions decided will be found in the opinion. The judgment repudiated the award of the arbitrators as not in accordance with the submission to them, and as fixing an inadequate price or proportion for defendant's property, and decreed specific performance, requiring, however, that the plaintiff deliver to the defendant 342 shares of its stock, instead of the 135 shares apportioned to him by the appraisers. From the whole of this judgment the defendant appeals, and from that portion requiring the delivery of 207 shares of stock in addition to the award of the appraisers the plaintiff appeals.

George L. Williams (Burr W. Jones, of counsel), for plaintiff.

B. R. Goggins and Wm. F. Vilas, for defendant.

DODGE, J. (after stating the facts).

The defendant on his appeal contends that he never became bound by the alleged contract of July 16, 1894, for the reason that he withdrew at a time when he had a right so to do, and before the contract had become complete, and obligatory upon him. That contract, by its very terms, provided that it should not be binding upon either or any of the parties thereto until signed and executed by a list of persons and corporations named. Obviously it was an incomplete instrument until that clause was satisfied. Until then none of the parties was irrevocably committed to his decision to become a party to that agreement. It was ambulatory, and, up to the time when the last of the parties named had signed and executed, each of the others had a right to change his mind, and withdraw his assent thereto. This proposition is not controverted by either party; as, indeed, it could not well be. Thereupon arises the inquiry whether, on the 13th day of February, when the defendant exercised his election to withdraw, and gave notice of such decision to all of the interested parties, the contract had been signed and executed by all those named. On that date there had been subscribed to the paper the names of all such parties, including the name of B. G. Chandos as administrator of the estate of Marian L. Bensley, and the names of the three corporations the Wisconsin Wood-Pulp Company, the Grand Rapids Water-Power Company, and the Pioneer Wood-Pulp Company, in the form described in the statement of facts. The defendant contends nevertheless that it had not in fact been executed by any of the four. With respect to the Bensley estate, we think the defendant's position not well...