Court Opinion

ID: 6991727
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:26:08.736869+00
Date Added: 2024-06-11T16:09:38.238353
License: Public Domain

Gaby, P. J. The appellant filed his bill against the apjDellee Hawkes only, but by a supplemental bill brought in as a defendant one Alley, of whom no further notice need be taken. The object of the bill was to procure a rescission of one-half of, and the return of one-lialf of the stock delivered in pursuance of a contract as follows: “ Memoranda of agreement made this 21st day of July, A. D. 1886, between M. A. Hawkes and J. Y. Taylor, both of Evanston, Cook County, Illinois, as parties of the first part, and Howard E. Smith, of Denver, Arapahoe County, State of Colorado, as party of the second part, witnesseth: “That for and in consideration of the transfer to said parties of the first part of twenty-five thousand and sixty shares of the capital stock of the Ituby Chief Mining and Milling Co., or causing the transfer to said first parties of such amount of stock in said company, the parties of the first part agree to make no demand on said party of the second part for any indebtedness, present or to come, nor upon the remaining shares of the capital stock standing, after such transfer, in his name on the books of the company, and they agree to prosecute the development of the property of said company at their own risk, for a reasonable time, as they shall consider best for their mutual interests, till satisfied of the futility of further endeavors to make the property yield revenues, without large expenditures. Incase the property becomes profitable the parties of the first part agree to pay to said party of the second part, his heirs or assigns, one-eighth of any such profits to the amount of twenty thousand dollars ($20,000), but only after the quarter of such profits shall have paid them the sum of forty thousand dollars ($40,000). “Also in cáse they sell any of the stock that shall then stand in either of their respective names, they shall consider themselves to have parted with a proportional amount of the twenty-five thousand and sixty (25,060) shares above named, as that stock shall be to the whole number of shares standing in their respective names, and on and after the sale of such proportion of stock shall have netted them the sum of forty thousand dollars ($40,000), then they will pay said second party the one-half received from the sale of this above-said quarter of the capital stock, till such receipts have been paid to him to the amount of twenty thousand dollars ($20,000), and no longer. “It is further mutually agreed and understood between the parties of the first and second part that the said Hawkes and Taylor shall be allowed to use their best judgment and abilities in carrying out all the conditions of this contract. “ In witness whereof, we have hereunto set our hands and seals this 28th day of July, A. D. 1886. “M. A. Hawkes, “ J. Y. Taylob, “ Howabd F. Smith.” To such a bill Taylor is a necessary party. Acts in performance of the contract done by either Taylor or Hawkes, were, as to the appellant, done by both. The contract on the face of it, is joint as to them and can not be made several by averments in the bill, or by evidence of conversations between the parties—at least, in a suit to which Taylor is not a party. Ho decree in this suit will be a bar to any relief Taylor may claim against Hawkes, nor any evidence of facts inconsistent with such claim. The rule which makes Taylor a necessary party, and the reason for it, are stated in 1 Dan. Ch. 190; Story, Eq. Pl., Sec. 72. Taylor does not become a party by being called as a witness on behalf of' the appellant. If he seeks any relief against Hawkes, he must put himself on record as complainant. The ground upon which a rescission as to Hawkes, and a return of half the stock is claimed, is, that Hawkes has failed “to prosecute the development of the property of the company,” as the contract provided, and has attempted to obtain an unjust judgment against the company. The contract left to the discretion of Taylor and Hawkes as their own interests might indicate, the extent to which they would so “ prosecute.” That promised prosecution was not the sole consideration on their part. The appellant and such stock as he retained were discharged from some indebtedness. Doubtless the successful working of the mines was a condition precedent to such a state of affairs as would ever entitle the appellant to the contingent profits or proceeds of sales of stock contemplated by the contract; hut Taylor and Hawkes as to such working were left to the exercise of their own judgment. The contract assumes that desire and hope of gain for themselves would be a sufficient incentive to any prudent expenditure. The decree dismissing the hill is right and is affirmed. Decree affirmed.