Gibbons v. Ellis

Lyon, C. J. 1. The first defense, to wit, the failure of Davis & Eankin to furnish the land, creamery building, outfit, and appliances.stipulated for in the contract, is without merit. The contract was modified in some particulars in the interest of the subscribers to the fund, by general consent, or at least acquiescence, of the parties interested. Davis & Eankin performed the same as modified, in good faith, and the subscribers, acting collectively as a corporation, accepted the property, without objection from any source, as a compliance by Dávis & Eankin with the terms of their contract. The defendant is boünd by this action of his associates for his benefit, to which he never made [438] any objection until thereafter called upon to pay his subscription. Gibbons v. Grinsel, 79 Wis. 365. 2. The second defense, to the effect that the subscription is void because only $5,900 was subscribed, is predicated upon a mistaken view of the contract. ¥e find no clause therein providing that no subscription shall be binding until the full sum of $6,000 is subscribed. The restriction therein (if there be any) is upon the right to incorporate. Moreover, $6,100 was apparently subscribed; but one person, whose name appears in the list as a subscriber to the amount of $200, denies that he made the subscription. It does not appear that Davis & Rankin knew this fact, if it be a fact. They acted in perfect good faith, supposing the subscriptions were all valid, and expended their money in an honest performance of their obligations under the contract. If the defendant would avoid paying his subscription for the reason that the $200 subscription was invalid and hence that only $5,900 was subscribed, he should have obtained the information and imparted it to Davis & Rankin before they performed their part of the contract. This defense is manifestly an afterthought. It is not just, and cannot prevail. 3. The defendant signed and delivered to Mr. Teall the assignment set out in the above statement of the case, but Mr. Teall testified that the instrument was drawn for the purpose of procuring three of the subscribers, of whom the defendant was one, to execute it. The signatures of .the other two subscribers were never obtained. Mr. Teall took the assignment to defendant to procure, and did procure, his signature thereto. As to what then and there occurred Mr. Teall testified as follows: “ It was stated by me that if I could procure the signatures of the other two unpaid subscribers, and could sell the stock, that it would be accepted in settlement; but I expressly and distinctly stated to him that I took this only for the purpose of en [439] deavoring to compromise and negotiate a settlement, but only on condition that I could procure the signatures of the other two unpaid subscribers, and upon the further condition that I could dispose of the stock.” This testimony of Mr. Teall was stricken out by the court. The learned circuit judge, in making the above ruling, intimated the opinion that plaintiff was estopped by his laches, in that he did not return the assignment, or notify defendant that its conditions had not been complied with, from asserting that the assignment was not unconditionally delivered to plaintiff. Yet we understand the ruling really to have been made on the ground that the admission of such testimony would violate, the rule which prohibits testimony of parol stipulations, made before the execution of the written contract, offered. for the purpose of modifying or changing the terms of the writing. We think the above ruling was erroneous. The assignment expresses a joint as well as several contract, and shows on its face that it was intended to be executed by three subscribers. It is only executed by one. It is probable that the fair inference from -the writing itself is that the parties did not intend it to be operative until the three subscribers had signed it, and hence that the burden is upon defendant to prove that it was delivered by him, and accepted by plaintiff, unconditionally, and was to be in full force and effect without such other signatures. If this is a correct view, the testimony of Mr. Teall was certainly admissible to rebut any such proof on the part of the defendant. See Taylor v. Coon, 79 Wis. 76, 82. But, if the view above suggested is not the correct one, it is clear that Mr. Teall’s testimony did not tend to change or modify the terms of the written assignment, but went only to the question as to whether the same had been so delivered as to become operative as the contract of the parties. We understand the rule to be well established that parol testi [440] mony is admissible to prove that a written instrument has never been delivered so as to bind the parties thereto by its terms. If defendant signed the instrument in question, and left it with Mr. Teall under an agreement that if should not be operative unless the signatures of two other subscribers should be obtaiued thereto, this was no such delivery and acceptance of the instrument as would bind either party by the stipulations therein written, and neither would be bound until such, signatures were obtained. We are not aware of any rule of evidence which excludes parol testimony tending to prove such nondelivery and nonacceptance. It may here be observed that we have in this case no question arising under the statute of frauds, as in Campbell v. Thomas, 42 Wis. 437. Many cases sustaining the above views, will be found cited in the brief of counsel for the plaintiff. 4. We are further of the opinion that there is nothing in this record which can properly be construed as a waiver of the plaintiff’s right, or an estoppel against him, to assert that the assignment never became operative as a contract. All there is of it, the defendant expressed in the instrument his willingness to join with two others in assigning their interest in the creamery stock or property to the plaintiff, on the terms specified in the writing. The other subscribers failed to join in the assignment, and that was the end of it. The instrument imposes upon plaintiff no obligation of diligence to obtain their signatures, or, if he failed to do so, to give notice of the fact to defendant. Furthermore, we discover nothing in the rejected testimony of Mr. Teall which violates the rule excluding proof of mutual propositions of settlement by parties to a controversy. Our conclusion is that, in any view of the case, it was error to exclude the testimony of Mr. Teall. By the Court.— The judgment of the circuit court is reversed, and the cause remanded for a new, trial.