McCready v. Gans

• Decision Date: 07 November 1913
• Docket Number: 389
• Citation: 89 A. 459,242 Pa. 364
• Parties: McCready, Appellant, v. Gans
• Court: Pennsylvania Supreme Court

89 A. 459

242 Pa. 364

McCready, Appellant, v. Gans

No. 389

Supreme Court of Pennsylvania

November 7, 1913

Argued April 13, 1913

Appeal, No. 389, Jan. T., 1913, by plaintiffs, from order of C.P. Fayette Co., Sept. T., 1911, No. 377, sustaining demurrer to plaintiffs' statement of claim and refusing to permit plaintiffs to amend statement of claim in case of James A. McCready, Vincent Stevens and Joseph E. Barnes acting as Syndicate Managers, now for the use of Charles Fahr and George D. Trawin, Trustees for themselves and for Frank R. Shryock, John J. Shryock, Cyrus See, and Roland B Thompson and Maria Thompson, executors of the last will and testament of Henry H. Thompson, deceased, v. William L. Gans and Henry B. Gans. Affirmed.

Assumpsit on a contract to subscribe to an issue of bonds. Before UMBEL, P.J.

From the record it appeared that the action was brought on a contract of underwriting between three men called syndicate managers and the defendants, who by executing the contract became members of a syndicate to underwrite an issue of bonds of the Meadville and Conneaut Lake Traction Company. The statement of claim averred that the syndicate managers had notified the defendants of the acceptance of their contract, and, after the expiration of the time fixed by the contract had assessed the expenses upon all of the members of the syndicate, which expenses equalled the full amount underwritten, by reason of the failure to sell any of the bonds. To this statement a demurrer was filed on the ground that no complete copy of the underwriting agreement was attached to or contained in plaintiffs' statement; that the underwriting agreement provided it should not be binding on any signer until total subscriptions aggregated in obligation the sum of $565,000; that while it was alleged in the statement that the amount had been signed, the copy attached showed no signatures except those of defendants who did not subscribe the entire sum; and that the statement failed to show performance or such action by the syndicate managers under the authority contained in the contract as would sustain a right of action.

The court sustained the demurrer in an opinion in part as follows:

The first and second exceptions are based on the fact that the copy of the underwriting agreement attached to the declaration does not show that it was signed by the syndicate managers, or by any subscribers other than the defendants, insisting that under the terms of the said agreement it was not binding nor was it such contract as would support an action nor, in fact, was it a contract at all until it was signed on the one side by the syndicate managers and on the other by sufficient subscribers to make the total of their subscriptions at least $565,000.

Section 3 of the Act of May 25, 1887, P.L. 271, provides "The plaintiff's declaration . . . shall consist of a concise statement of the plaintiff's demand . . . which . . . shall be accompanied by copies of all notes, contracts, book entries . . . if any, upon which the plaintiff's claim is founded."

In interpreting this provision, our Supreme Court has held that the plaintiff's statement must exhibit a complete cause of action in clear, express and unequivocal language: Byrne v. Hayden, 124 Pa. 170; Mink v. Shaffer, 124 Pa. 280; Gere v. Unger, 125 Pa. 644; Fritz v. Hathaway, 135 Pa. 274; Laubach v. Meyers, 147 Pa. 447; Ferguson v. Telegraph Co., 151 Pa. 211; Acme Mfg. Co. v. Reed, 181 Pa. 382.

The copy attached must set forth the whole of the instrument: Campbell v. P. & W. Ry. Co., 137 Pa. 574; Finch v. White, 190 Pa. 86; Schofield v. Lafferty, 17 Pa.Super. 8.

It is not competent for plaintiff to select parts of a written contract, and to claim that his action is founded on these alone, when the contract plainly contains other terms not produced by the plaintiff. If the whole contract, including the parts not copied, would support the action, plaintiffs' case is entitled to stand, but if it would show a defense, the defendant has a right to have that appear before he is called upon to plead: Acme Mfg. Co. v. Reed, 181 Pa. 382.

Unquestionably in this case, all of the signatures of all of the syndicate managers and all of the subscribers, with the amount subscribed by each, are and form a material part of the contract and, in our opinion in legal effect, the failure to file a copy with all the said signatures or names of the subscribers is the same as if the plaintiff had left out the following provision of the contract, viz: "This Underwriting Agreement shall not be obligatory upon any of the subscribers until the subscribers hereto and the allotments made hereunder by the Syndicate Managers shall amount in the aggregate to Five Hundred and Sixty-five thousand ($565,000) Dollars." Nor, in so far as the copy of the contract required to be filed with the declaration is concerned, do we think the amendment to the declaration filed May 28, 1912, cures the defect. The part of the contract referred to last above if not complied with would show a defense and would clearly bring the case within the Acme Manufacturing Co. v. Reed, supra; we are, therefore, of opinion and hold that the copy of the underwriting agreement filed with the declaration should contain a list of all the signers to the agreement, not necessarily copies of all the agreements or counterparts signed, but one copy of all similar agreements with the names of the signers to all.

As to the sixth exception, the averment of the declaration to the effect that the syndicate managers as well as the use plaintiffs had endeavored in good faith to sell and dispose of the stock and bonds for which the defendants and other subscribers had subscribed and had failed to sell any of the said stock and bonds, we think shows performance in that regard; but when they failed to make such sale they had under the eighth paragraph of the underwriting agreement, other duties to perform of a nature and character equally as important in ascertaining and determining the sum required to discharge all the obligations of the syndicate and an apportionment of the same ratably upon the subscribers, and nowhere in the declaration do we find any claim or averment of the syndicate managers of action or performance of their duty in that particular. We do not think the statement above to the effect that when the syndicate managers and use plaintiffs failed to sell sufficient bonds to pay the syndicate obligations and the defendants were notified that th...