Hills v. McMunn ( 1907 )

Mb. Justice Smith

delivered the opinion of the court.

No question is presented by the record or in arguments of counsel as to the pleadings, or that the evidence offered by complainant is admissible under the amended bill of complaint. We do not find it necessary therefore to make any statement of the pleadings.

The case turns entirely upon the sufficiency of appellant’s evidence to make a case for the relief asked by the amended bill.

The terms of the original contract between Weber and MeMunn are admitted by the pleadings. . Appellant necessarily contends, and it is the theory of the bill, that this contract was by agreement between Hills and MeMunn modified by the substitution of the stock of the new corporation, United States Steel Piling Company, for the stock of the Slick Company named in the contract, and in all other respects as though the former company had been named in the contract in place of the Slick Company.

In the opinion of the court the evidence fails to sustain this theory or contention.

The evidence of this modification relied upon by appellant consists of Hills’ testimony as to various conversations between himself and MeMunn, all of which, with possibly one exception, took place after the contract was made. One of these conversations occurred August 17 or 18, 1904, in which MeMunn is represented as saying in substance that the Pitts-burg people who were interested with him did not like Arizona corporations and the word “Slick” was objectionable, and expressed a preference for an Illinois corporation. Thereupon Hills said to McMunn: “All right. If this thing is to go through, as it is, and you prefer an Illinois corporation, we will pay our pro rata of the incorporation charges of making a corporation under the laws of the State of Illinois out of the money that is coming.”

The following week a second conversation occurred upon this subject, according to Hills’testimony, and he (Hills) said that United States Steel Piling Company would be a satisfactory name to him.

Hills says that during the week following the making of the contract he told McMunn that neither he nor Weber had any money, and that they could not obtain the money with which to purchase the interests in the patent, and if McMunn wanted them he must pay the money for them himself, and that McMunn told him to go ahead and acquire the interests and “we will take care of the thing as soon as we get meetings and get settlement and get a new corporation.”

The fourth conversation is said to have occurred about September 1, 1904, when the assignments were lying in McMunn’s safe. Hills testifies that he said to McMunn: “What are you going to do with these assignments?” McMunn replied: “You have no objection to putting them in trust?” To this Hills says he replied: “No, Mr. McMunn, with a good man, no, on condition that they shall be delivered either to the Slick Steel Piling Company or the new corporation that we may choose to name under the laws of Illinois.” McMunn-said: “Well, I will fix that.”

In connection with these conversations it is urged that in support of the proposition that the agreement was modified, that the letters written in McMunn’s office by Hills to Weber which were brought to the attention of McMunn and were criticised and changed by him, should be considered as confirmatory proof of the modification of the agreement.

Upon a careful review and consideration of the testimony and proof on this point we find no agreement to modify the contract. The conversations prior to arid on August 22, 1904, in regard to securing the various interests in the patent, and the inability of Hills and Weber to procure the money with which to purchase those interests, do not indicate a purpose or intention to change the agreement which Hills stated to McMunn that neither Weber nor himself could carry out. McMunn’s statement that he would furnish the money does not show such a purpose. There is in these conversations no expression from which we can find any such agreement. There is no promise on McMunn’s part to furnish the $15,000 and deliver to Hills or Weber 2,000 shares of stock in the United States Steel Piling Company, or the new company which was to be formed. Hills ’ testimony proves that McMunn paid to the holders of the various interests in the patent $8,500 and took assignments to Hills of these interests in trust for himself or the company which was to be formed and not in trust for Weber or the Slick Company or Hills, and that Hills understood this perfectly, for he without delay or objection transfers, at McMunn’s direction, all interests which he had received to McConahey, a stranger to him, delivering the assignment to Bern, McMunn’s representative.

The allegation of the amended bill, therefore, that McMunn advanced Hills that sum to apply on the $15,000 which was to be paid by McMunn to Weber under the contract between them, and that Hills immediately distributed the. $8,500 among the owners of the patent, and that this was done under the modified or changed agreement, is not proved, and is not true.

The conversation which took place about September 1, 1904, does not, in our opinion, prove that McMunn agreed or expressed any intention to modify the agreement, as claimed. Hills testifies that in that conversation he consented to transferring the interests in the patent which then stood in his name to McConahey, as trustee for the Slick Company or the new corporation, but he does not testify that any particular modification of the original agreement between Weber and McMunn was mentioned or agreed upon. He does not swear that McMunn agreed to anything in that conversation. The substance of that interview is that McMunn wanted the assignment made to McConahey, and Hills made it without objection. Hills’ testimony to the construction which he placed on the assignment to McConahey, which the assignment itself does not warrant, is not proof of a fact or of an agreement.

The interview after Hills came out of the hospital does not, in our opinion, tend to prove a modification.

It is clear that McMunn and Hills never in the most informal way talked over a modification of the original agreement. It is therefore impossible for us from the testimony to find what the alleged modification was, or what the contract as modified provided, without making a new contract for the parties. This a court will not do. By its terms the contract expired on September 18, 1904, and it was never renewed or extended. Weber had failed to comply with its conditions on his part, and Hills never paid the $1,000 as provided in his contract with Weber of August 17, 1904, and therefore never complied with his contract with Weber.

The correspondence between Hills and Weber shows that not until September 28, 1904, when the contract had expired by its terms, did Hills inform Weber that any change was contemplated by the formation of the new corporation. His letter of that date first informs Weber of the organization of the United States Steel Piling Company. If there had been a modification of the contract, as contended, it is reasonable to suppose that Hills would have notified Weber at once and asked his consent to the change, hut the record shows nothing of the kind. The consent of Weber to any modification was necessary before it would be effective or binding, for there was nothing in the powers of attorney which Weber gave to Hills, before leaving for California, which conferred upon Hills the power to make any change in the agreement. We do not find any snch consent or authority expressed in any letter from Weber to Hills in the record. There is in fact no reason to expect any such consent on the part of Weber, for we have searched the letters of Hills to Weber in vain for any such proposition or suggestion. As above stated, the letter of September 28, 1904, of Hills to Weber, contains the first mention of the new company. After commending the wisdom of the formation of this corporation, Hills in this letter says: “At this present moment, while we have had no meeting, I see no reason why and have heard no intention of Mr. McMunn insisting upon any change in our original offer, excepting of course that we shall have to pay the cost of the incorporation of the new company.” This, we think, shows that Hills himself had no idea of any modification of the original contract at this date. It is not seriously claimed, we think, that any modification was made subsequently.

If the contract was not modified, or if it was modified as claimed, the question is, does the evidence show that Hills has an actual existing interest in the subject-matter of the suit, and is he entitled to institute a suit in equity against McMunn and the United States Steel Piling Company concerning it, asking for a specific performance of the contract?

No point is made in argument upon the fact that Hills’ name appears attached to the acceptance by McMunn, in connection with Weber’s name. It is not claimed that by appending his name to the acceptance, Hills made the contract his own or became a party to it. He did not own, nor was he selling the shares of stock in the Slick Company. Appending his name to the contract therefore had no legal effect. The contract was and remained a contract between Weber and McMunn. Before the contract was made Hills had no interest in the subject-matter of the contract. After the contract was signed he still had no interest in the subject-matter of the contract. When the contract should be performed by the parties, Hills, by virtue of his agreement with Weber, would become interested as between him and Weber in a portion of the proceeds realized by Weber, if he had performed his agreement with Weber. But this possible right in certain proceeds did not vest him with that actual existing interest in the subject-matter of the WeberMcMunn contract and give him the proper title in the subject-matter of the contract which would enable him to institute and maintain a suit in equity concerning it. Enc. Pl. & Pr., vol. 3, p. 359, and case there cited.

In Story’s Equity Pleading (9th ed.), par. 261, the learned author says, quoting from Mitf. Eq. Pl. by Jeremy, 155, 15'6: “Want of interest in the subject of a suit, or of a title to institute it, are objections tó a bill seeking any kind of relief.” And in the following paragraph the author says: “The bill, too, should not only show the title and interest of the plaintiff in the subject-matter of the suit; but there must be sufficient averments to show that the defendant also has an interest in the subject-matter and is liable to answer to him therefor. For it has been well remarked, that a plaintiff may have an interest in the subject of bis suit, and a' right to institute a suit concerning it, and yet he may have no right to call on the defendant to answer his demand. This may be for want of privity between the plaintiff and the defendant.”

Whether the contract between Weber and MeMunn remained as it was made originally, or whether it was modified by the substitution of the United States Steel Piling Company’s stock for the stock of the Slick Company, it still continued to be a contract between Weber and MeMunn, and not between Hills and MeMunn. There was no privity between Hills and MeMunn in either case, and therefore .Hills has no right to demand of McMunn a specific performance of the contract. Hills seeks by this bill to enforce the transfer of stock which, according to the evidence, he never owned or purchased, and in regard to which he never contracted with McMunn. Weber made a contract with McMunn for the sale of stock of the Slick Company, and under this contract or a modification of it, though not a party to it, Hills asks for a decree giving him stock in the United States Company which Weber never owned and never attempted to sell.

In our opinion appellant Hills is not entitled to the relief demanded in the amended bill and the Circuit Court did not err in dismissing it. The decree is affirmed.

Affirmed.