Hickman et al. v. Bingaman et al.
An action of covenant by a committee of lien creditors appointed to carry on kaolin mines, in pursuance of an agreement under seal between the assignees for benefit of creditors and all the lien creditors but one, will not be defeated because one of the lien creditors signed with the parol stipulation that it should not become operative until it was signed by all the lien creditors, in the absence of notice of such stipulation on the part of the committee. Nor will the action be defeated by the fact that such parol stipulation was made in the presence of a lien creditor who afterward became one of the committee, such stipulation having been made in the course of the preliminary negotiations and before the delivery of the paper. The agreement contained a seal, opposite to which there was no signature, but the names of the lien creditors were not recited, and there was no contingency stated in the agreement to limit its operation.
The liability of the lien creditors under the agreement, for the acts of their agents, decided in Bingaman v. Hickman, 115 Pa. 420, reaffirmed.
Feb. 14, 1889.
Error, No. 12, July T. 1888, to C. P. Chester Co., to review a judgment on a verdict for plaintiffs in an action of covenant by Frederick Bingaman, Emmor B. Cope and Wellington Hickman against Wellington Hickman, Lydia J. Hickman, administratrix of M. B. Hickman, deceased, T. P. Apple, The First National Bank of West Chester, Win. Hoopes, T. A. Lloyd, A. E. Lloyd, Milton Berry and E. T. Cope & Son, at Aug. T. 1884, No. 57. Green and Clark, JJ., absent.
The case was in the supreme court before in Bingaman v. Hickman, where the agreement appears, upon which suit was brought. *265To the agreement, as there printed, should be added a seal, without a signature opposite to it, before the individual signature and seal of Wellington Hickman.
The declaration was against the above named parties. Berry and Hoopes pleaded non est factum, covenants performed, covenants performed absque hoc. The Bank pleaded non fecit conventiones, non fregit conventiones, covenants performed, covenants performed absque hoc, payment, payment with leave, etc. M. B. Hickman pleaded covenants performed absque hoc, covenants performed with leave, etc. Apple pleaded covenants performed, covenants performed absque hoc, set-off, performance with leave to give special matter, etc. M. B. Hickman afterward died and his administratrix was substituted.
The plaintiff offered in evidence the agreement of May 8,1880, "the instrument in writing declared on in the cause, on the trial before Futhey, P. J.
This was objected to by the defendants because the declaration •set forth an agreement purporting to be executed by the defendants; while it appeared that it was signed by I). M. McFarland, who was not sued. The proof did not accord with the allegation .in the declaration and was therefore inadmissible. Objection overruled and exception. [1.]
The defendants gave evidence to prove that Wellington Hickman, who was a lien creditor and one of the committee, was actively engaged in procuring the signatures of the lien creditors, and that some of the signatures were procured with the express representations that the agreement should not be binding until it was signed ky all; and that one of the lien creditors did not sign.
The court charged, inter alia, as follows, after reviewing the first contention, decided in Bingaman v. Hickman, 115 Pa. 424:
“ With regard to the second position of the defendants, that this agreement was not to become operative until it was signed by all the lien creditors, there is no doubt of the right of the signers to stipulate thus. It was a voluntary agreement, voluntarily entered into by them, and they could make such stipulations as they saw proper. Had they put in the writing the stipulation that the instrument should not become operative until it was signed by all the lien creditors, there would be no difficulty about the matter; it would have been an inoperative instrument, for, confessedly, it was not signed by all the lien creditors. The provision, however, is not contained in the instrument. Still, the omission would not be material, if knowledge that it was executed upon that distinct understanding were brought home to the plaintiffs. It would, in that, case, have the same effect as if inserted in the writing. [We fail to see, however, in the evidence, anything which would enable the jury to find that two of the committee, at least, Mr. Bingaman and Mr. Cope, had knowledge of such stipulation. There is evidence that Mr. Hickman had; and, if this suit were upon the part of Mr. Hickman alone, there would be sufficient evidence to submit to the jury upon *266this question — whether or not Mr. Hickman had knowledge that this agreement was signed by some of the lien creditors with the understanding that it should not become operative until signed by all. But failing to see any evidence of such knowledge on the part of Mr. Bingaman and Mr. Cope, we say to you that the testimony in the case will not warrant us in submitting to you the question as to whether this agreement should or should not become operative, because it was not signed by all of the lien creditors.] [12.] We must take it as it stands written — as an agreement upon the part of the lien creditors who signed it, the defendants in this case, and the committee, by which they became liable to make good all losses,, expenses and daily pay provided for in the agreement, so far as they were not paid by the moneys received, or which should have been received, by the committee. [Those who signed this agreement permitted it to go into the hands of the plaintiffs; and it is to be presumed that the plaintiffs operated the works under this agreement with the defendants.] [13.]
[“ The only question, therefore, for the consideration of the jury is whether there is money due to the plaintiffs arising from their-operation of those works.”] [14.]
The plaintiffs presented, inter alia, the following points:
“ 2. — The representation alleged to have been made by one of the plaintiffs, who is also one of the defendants, cannot be received to reform, vary or rescind the written agreement, or affect the same with any condition whatsoever; there being no evidence that he represented the plaintiffs. The mere fact that, as a member of the committee, he had a common interest with the other members dops not affect them with any responsibility for his statements made without their knowledge or sanction. Ans. — This point is affirmed.” [2-]
“ 3. — There is no sufficient evidence to submit to the jury to> warrant any reformation or rescinding of the written agreement, or to affect the same with any condition whatever. Ans. — This point is affirmed.” [3]
The defendants presented, inter alia, the following points:
“3. — If the jury find that the plaintiffs were a committee appointed by and acting on behalf of the general creditors of S. G. Willauer, and that in operating said kaolin works they were not acting for and were not the agents of the defendants, but were merely permitted by said agreement to go upon and use said kaolin mines without intention on the part of the defendants to employ them as their agents, the plaintiffs cannot recover in this action, and the verdict should be in favor of the defendants. Ans.- — Whatever-might be our view in regard to the proper construction to be given to this article, the supreme court, as I said before, have settled the-meaning of the instrument, saying that it is a contract as I have-explained to the jury. Therefore these points are disaffirmed.” [4]
“ 4. — If the jury find that any of the defendants executed the agreement on wliich this suit is based, upon the condition, under*267standing or agreement that the same was to be binding only in case all the lien creditors should execute the same; and shall further find that all of said lien creditors did not execute the .same, then the verdict must be generally for the defendants. Ans. — I have already disaffirmed this point in what I have said to the jury. I need not repeat what I have said. The binding effect of the agreement as written cannot be affected by the testimony which has been given in this case. The agreement binds the defendants even although not all the lien creditors executed it.” [5]
“ 5. — If the jury find that the agreement in suit was to be binding only when signed by all the lien creditors, in that event, if the jury find that the said agreement was not signed by all of said lien creditors, said agreement is an unfinished instrument, is not binding on the defendants, and the verdict should be for the defendants.” Answer, same as to the 4th point. [6]
“ 6. — The plaintiffs, under the agreement in evidence, were the agents of the assignees of S. Gr. Willauer as well as of the lien creditors who signed the agreement, and the liability, being joint, there can be no recovery in this action, because D. M. McFarland, one of the parties to said agreement, is not made a party to this suit. Ans. — It appears that this agreement was executed by Mr. McFarland, one of the assignees of Willauer, and the defendants claim under this point that he is liable under the agreement as well as the defendants here, if they are liable; and that suit cannot be maintained because Mr. McFarland was not also made defendant. This point is disaffirmed.” [7]
“ 7. — Upon all the evidence, the verdict should be for the defendants. Ans. — This point is disaffirmed.” [8]
William Hoopes, one of the defendants, presented these points:
“ 1. — If the jury find that William Hoopes signed the paper sued on, upon the condition that all the lien creditors of S. Gr. Willauer should sign it, and delivered it with such condition to Wellington Hickman, one of the plaintiffs, and if they further find that the said Wellington Hickman agreed to obtain the signatures of all the lien creditors thereto in accordance with the condition, such delivery to the said Wellington Hickman was conditional, and the plaintiffs cannot recover against said William Hoopes without first showing that such condition was complied with. Ans. — This point is disaffirmed.” [9.]
“ 2. — The signing of said paper by William Hoopes, being a voluntary act on his part, he had the right to impose such conditions upon the operation of the paper as he saw proper; and if the jury believe he signed the same on the condition that all the lien creditors of S. Gr. Willauer should sign it, and delivered it to Wellington Hickman, one of the plaintiffs, under that condition, the delivery of the paper was conditional, whether the said Wellington Hickman consented to it or not; and the plaintiffs cannot recover against him in this suit, unless the condition was performed. Ans. — This point is disaffirmed. The first part of the point is correct where it says: *268‘ The signing of said paper by William Hoopes, being a voluntary act on his part, he had a right to impose such conditions upon the operation of the paper as he saw proper.’ He had this right; and if he had put it in the paper it would have been binding. Or, if the testimony showed that the committee had acknowledged that William Hoopes had thus imposed this condition upon the paper, it would have been binding. But it was not in the paper, and there is no evidence that at least two .of the committee had knowledge of such imposition. Therefore, the condition imposed upon it by William Hoopes, if such condition was imposed, became inoperative.” [10.]
“ 3. — Upon all the evidence in the case, the verdict of the jury-must be for the defendant William Hoopes. Ans. — This point is disaffirmed.” [11.]
Yerdict and judgment for plaintiffs for $1,475.07.
The assignments of error specified, 1, the ruling on the evidence, quoting the bill of exception; 2-11, the answers to points, quoting them; and, 12-14, the portions of the charge included within brackets, quoting them.
. Thomas W. Pierce and R. Jones Monaghan, with them Alfred P. Reid, J. Frank E. Hause, H. T. Fairlamb, John J. Pinkerton and Chas. H. Pennypacker, for plaintiffs in error.
It is for the jury to determine whether a contract is established by proof and what that contract is. Folsom v. Cook, 115 Pa. 539. The contract in suit was not signed by two of the plaintiffs. The jury should have been allowed to pass upon the question whether the paper in suit was the contract between the parties.
McFarland, one of the parties signing the paper, was not joined as a party defendant. The plea in abatement is abolished by Act of May 25, 1887, § 7. The covenants throughout the paper are joint. Phila. v. Reeves, 48 Pa. 472. Sweigart v. Burke, 8 S. & R. 308. McFarland was not named in the narr. We could not plead in abatement or demur, therefore.
The court below conceded that Wellington Hickman was estopped by his representations, yet the verdict permits him to recover.
The paper was not signed by all the lien creditors and never became operative. The defendants had the right to make a condition, upon the performance of which the instrument should become •operative. Fertig v. Bucher, 3 Pa. 308; Warfel v. Frantz, 76 Pa. 88; Lovett v. Adams, 3 Wend. 380.
The committee was bound by the representations of Wellington Hickman. Jones v. Nat’l Building Ass’n, 94 Pa. 216; Keough v. Leslie, 92 Pa. 424; Ins. Co. v. Humble, 13 W. N. C. 54; Greer v. Shriver, 53 Pa. 259; Caley v. R. R., 80 Pa. 363; Laird v. Campbell, 100 Pa. 159; Hughes v. Bank, 110 Pa. 428; 2 Wh. Ev. § 1192; Greenl. Ev. § 112.
The paper was under seal and a deed in law, but it was never *269delivered. Wellington Hickman had possession of the paper, but only for the purpose of securing the signatures of the lien creditors. Where a bond is put in the possession of the obligee by a person without authority, the obligee cannot maintain suit upon it. Fay v. Richardson, 7 Pick. 91; Chess v. Chess, 1 P. & W. 32; Allen v. Getz, 2 P. & W. 310; Jones v. Building Ass’n, 94 Pa. 215; McClurkan v. Byers, 74 Pa. 413; Stockdale v. Keyes, 79 Pa. 256.
The presence of a blank with a scroll seal should have suggested inquiry that the paper was conditional. Sharp v. United States, 4 Watts, 21; Keener v. Crago, 81* Pa. 166.
R. T. Cornwell, with him Thomas S. Butler and Joseph Hemphill.
The supreme court, in Bingaman v. Hickman, 115 Pa. 424, has decided that defendants are liable to plaintiffs, so far as the agreement is concerned, for losses incurred in operating the kaolin works.
It is too late to raise any question as to the non-joinder of McFarland. It should have been done by a plea in abatement before issue joined.
The declarations of Wellington Hickman could not bind the other members of the committee. Clark v. Morrison, 25 Pa. 456; Bovard v. Wallace, 4 S. & R. 499; Nussear v. Arnold, 13 S. & R. 328; Hauberger v. Root, 6 W. & S. 434; Dietrich v. Dietrich, 4 Watts, 167; Com. v. Eberle, 3 S. & S. 9; Dan v. Brown, 4 Cow. 483; Rex v. Hardwick, 11 East, 578; Bland v. Haselrig, 2 Vent. 151; Whitcomb v. Whiting, Doug. 652; Greenl. Ev., 206; Slaymaker v. Gundacker, 10 S. &. R. 75.
The committee acted upon the faith of the agreement signed by the lien creditors, and it alone is the charter of their employment.
March 11, 1889.
Williams, J.,
There were two important questions on which this case depended on- the trial in the court below. The first was whether the agreement sued on imposed, by its own terms, any liability upon the lien creditors of Willauer who executed it. The other was whether the execution was, as to any one or more of the creditors, provisional merely, and not binding, because one lien creditor had failed to sign it.
The learned judge of the court below rightly held that the first of these questions had been put at rest by the decision of this court in Bingaman v. Hickman, 115 Pa. 424. Whatever the ideas of the hen creditors may have been when the project of working the kaolin mines was first presented to them, we have to deal with the written instrument to which they have put their names.. This is more than a license to work the mines. It is a selection of three men as a committee to represent them ; and it authorizes them to take possession of the mines, to employ men, to purchase horses, carts and other implements, to prepare for market and sell the kaolin, and to appropriate the proceeds in accordance with a scheme of distribution adopted by the lien creditors and made part of their agreement. It *270further fixes their compensation, and reserves a right to revoke the powers of the committee. This paper may reach beyond the original understanding which prevailed among the lien creditors before its execution, but it speaks in no uncertain tones and was properly interpreted. Bingaman v. Hickman, supra.
W"e inquire next, whether the agreement is binding as between the creditors who signed it and the committee who acted upon the authority it gave them. It is alleged that one or more of those who signed the agreement did so with the understanding that all the creditors were to sign it before its delivery to the committee, and that one, Mr. Wm. Hoopes, said when he signed that he did so with the understanding that all should sign or it was not to be binding on him. Now, it is important to remember that this agreement was primarily an agreement by and between the lien creditors. They agreed with each other that certain things should be done with the real estate on which they all had hens. To accomplish the purpose proposed, they agreed on the persons who should serve upon the committee and on what they should do in furtherance of the common project. Hickman was one of these creditors, favored the scheme, and participated in the conferences which resulted in the execution of the agreement by the lien creditors.' He was also named as one of the three persons to act as a committee on behalf of the creditors as a body.
Whatever conditions the creditors may have proposed in dealing with each other, they delivered the agreement to the committee when it had received the names of all the creditors except one lady. The paper, as it was executed and delivered to the committee, was without condition or restriction of any sort, and authorized immediate work under its provisions. They accordingly entered upon the active prosecution of the business of mining and marketing kaolin from the land bound by the liens of their principals. For more than six months they were notoriously engaged in the business. They employed men, bought horses and carts, raised money to meet current expenses, put their product on the market and gave their personal attention to the operations under them charge. During all this time there was no word of objection or protest, no notice of any verbal conditions affecting the liability of the .persons who had signed the agreement, no suggestion of want of authority on the part of the committee. The lien creditors withheld process in accordance with the arrangement and gave the committee the time necessary to try the experiment fully. Now, when the experiment has been completed and the result is known to be disappointing, the committee, when they ask their principals to reimburse them, are met with the allegation that the agreement which they hold and under which they have acted is of no force because some one or more of the creditors said, when he signed it, that all must sign or he would not be bound.
But the question is not about what the lien creditors of Willauer said to each other while this project was under consider*271ation, but what did they say to this committee \ What authority was conferred on the committee to enter upon the land of Willauer, bound by the liens of these creditors, and to assume the responsibility of operating the kaolin mines ? The committee answers this question by producing the written agreement, framed, signed and put in their hands by the creditors. This agreement defines their powers and their duties. It is a clear and distinct authority to do what has been done, as the agents and, representatives of those whose names are appended to it. When this was delivered to the committee, unless they were at the same time advised that it was not what it appeared to be, and would not be operative until one more name had been put to it, they had a right to take it for what it was upon its face, viz., an unconditional direction to mine and .sell kaolin from the land bound by the liens for the purposes expressed in it. It was not enough to show what had been said among the creditors at an earlier stage of the business, though one of the creditors present became one of the committee. The material question is, what was the understanding when this paper was finally delivered 1 There was no evidence showing any notice to or knowledge in any one of the committee that, at the time when it came to their hands, it was not to be understood and acted upon as a finished chart of their powers. They at once entered upon the responsibilities it imposed, and no creditor appears to have said one word to warn them of their want of authority during all the time they were engaged in the business.
The learned judge was right in holding that there was nothing in the evidence to relieve against the plain letter of the agreement under which the committee acted.
The judgment is affirmed.