Carbon Spring Water Ice Co. v. Hawk

29 Pa. Super. 13 | Pa. Super. Ct. | 1905

Opinion by

Rice, P. J.,

We do not regard it important that it is not admitted in the case stated that this was an agreement to lend money to the company. The agreement is in writing and is set forth at length in the case stated. The construction of the paper is for the court. Whether or not it is an agreement to lend is a question of law, not a question of fact: Nellis v. Coleman, 98 Pa. 465. It was signed by all of the stockholders of the company and is in the following words : “We, the undersigned stockholders of the Carbon Spring Water Ice Company, hereby agree to pay sixty-five per centum of the amount of stock held by each of us into the treasury of the company for the purpose of paying the indebtedness of the company. ■ Each stockholder shall receive a note of the company for the amount paid by him. The amount set opposite each of our names is the sum we hereby agree to pay.” Great stress is laid on the use of the word “ pay ” instead of the word “ lend.” But the nature of the transaction contemplated, whether a gift, or a discharge of an obligation which the stockholder was under, or a loan, is to be determined by looking not only at what the stockholder was .to do but also at what the cpmpany was to do. Thus-viewed the obvious meaning of the paper is that each stockholder was to pay a certain sum of money into the treasury, and was to receive the company’s obligation, in the form of a promissory note, for the repayment of the sum thus paid in. This transaction would have been a loan of money to the company, although it was not called by that name in the paper. It is urged by the appellant’s counsel that this construction brings the case within the principle upon which the ruling was made in Newport & Sherman "Valley R. R. Co. v. Seager, 7 Pa. Superior Ct. 268, that the promise was nudum pactum. In that case, it is true, we construed the subscription to be a promise to lend a certain sum of money to the company at a future day and to take one of the company’s bonds as the evidence of and security for the loan. Thus far the cases are parallel. But in the case cited the promise was by a stranger to the company, and nothing appeared on the face of the paper, or otherwise, which showed that the promise was made in consideration of the promises made by the other subscribers, or that it was supported by any other consideration. Here it plainly appears from the paper, construed in connection with the resolution pursuant to which it was drawn and signed, that each stockholder promised his fellows, in consideration of similar promises by them, to advance money upon loan in order to accomplish an object in which they had a common interest. If the agreement was to lend money to the company we fail to see upon what theory the company could sue the promisor as for a debt and recover a general and unconditional judgment for the amount he promised to lend. But the case stated is so worded as to make the question of the right of the plaintiff to recover turn upon the single q uestion whether the paper heretofore quoted “ is a legal obligation of the estate of Henry E. Hawk to the plaintiff company.” Possibly, therefore, the question as to the measure of recovery, if the plaintiff is entitled to recover at all, is not before us. We shall consider the case in that view. Assuming that these promises of the other stockholders constituted a legal consideration for the promise of Henry E. Hawk, the question arises whether his promise became “ a legal obligation to the company,” when the company by its directors made the call set forth in the case stated and the others advanced the money subscribed by them. Possibly he would have been bound if the time for repayment of the loans had been fixed by the agreement or could be implied with certainty from extraneous facts. But the agreement is silent upon the subject and no such facts are stated. The company, as such, was not bound to accept the loan and to give its note payable at such time as he might designate, and further agreement between him and the company, or further action of the proper officers, was required to complete the obligation on his part to the company. And, even if it be assumed that the agreement was, as between the stockholders and the company, an offer to advance money upon the notes of the company, payable at such reasonable time as the board of directors might determine, the case stated fails to show that the offer ever was accepted, or that Henry E. Hawk ever assented to the construction Avhich the board of directors put upon the agreement. He never ■ became bound to make the loan upon the terms stated in the call, namely, upon “ a note or certificate of indebtedness of the company payable at the option of the company.” The counsel for the plaintiff concedes, and Nelson v. Von Bonnhorst, 29 Pa. 352 is authority for the proposition, that such a note would not create a debt enforceable at law, and we have endeavored to show that Henry E. Hawk had not agreed with his fellows to advance money to the company upon any such terms. Their agreement contemplated a loan which the company would be under legal obligation to repay, and it is quite clear that it was not within the power of the board of directors to change the agreement. What we have said relative to the agreement applies as well to his assent to an assessment of his stock, which was full paid, implied from his being present at the stockholders’ meeting and agreeing to the resolution then adopted. His assent was not to an unconditional assessment but to an assessment upon the same terms as those specified in the agreement. We have carefully examined all the cases cited upon both sides. None of them rules the question raised-in this case. We are of opinion that the agreement quoted at the outset is not a legal obligation of the estate of Henry E. Hawk, to the company. Therefore we are constrained to hold that it -was error to enter judgment in favor of the plaintiff.

The judgment is reversed and judgment is now entered for the defendants.