27 Wis. 214 | Wis. | 1870
The question in this case is, whether the writing subscribed by the defendant- and others is a contract, or whether it is to be regarded in law as a mere piece of blank paper. It purports on its face to be a contract or agreement between the several persons whose names are subscribed thereto, and to contain a promise on the part of each one of those persons to pay in the sum set opposite his name for the purpose of accomplishing the object therein designated. It is clear and unambiguous in its terms, and no doubt can be entertained as to the meaning and intention of the parties to it. They intended it as a
The facts of that case, as well as the principle upon which it was decided, will sufficiently appear from a part of the opinion, which is as. follows: “ There were twenty-nine persons, who were desirous that the courts should continue to be holden in Plymouth, and were willing to contribute certain sums towards the erection of a court-house, that they might continue to be holden there. A written agreement was made that each of the twenty-nine persons should pay to an individual a particular sum; that so much of the whole sum as should be necessary, should be expended
This principle, which governs in case of a subscription for a public object, I think equally applicable to a subscription where the object is private, and where the consideration is strengthened by the benefit received or to be received by each subscriber. It has been sustained by the following, in addition to the cases above cited: Trustees v. Stetson, 5 Pick. 506; Watkins v. Eames, 9 Cush. 537; Congregational Society v. Perry, 6 N. H. 164; Amherst Academy v. Cowls, 6 Pick. 427; Patchin v. Swift, 21 Vt. 292; Troy Academy v. Nelson, 24 Vt. 189. This last is a particularly valuable and interesting case upon the subject, where it is said the doctrine of estoppel is applicable, because of the fraud upon the other subscribers if one is allowed to repudiate.
And it is upon the very same and no other or different principle, that agreements for a composition between a debtor and two or more of his creditors have been upheld; and the numerous cases adjudging these valid are so many authorities directly sustaining the validity of the agreement here. An agreement by a single creditor with his debtor, for no other consideration than the payment of part of an admitted debt, to accept such part in satisfaction of the whole, is void for want of consideration. Otto v. Klauber, 23 Wis. 471; Perkins v. Lockwood, 100 Mass. 249. But such an agreement entered into by two or more creditors with the same debtor, by which they agree to accept less than the sums due them respectively, is valid by reason of the mutual promises of the creditors;
Such being the true and only consideration for agreements between creditors, it follows that if sufficient in agreements of that kind, then it must be in agreements like the present; for the nature of the promises is precisely the same in both classes. “ The reason is,” say the court in 100 Mass. 250, “ that the rights and interests of other parties become involved in the arrangement, and this affords a new and legal consideration for the promise. It would be contrary to good faith for a creditor who has secured the advantage of such an arrangement to disregard its obligations by proceeding to enforce the balance of his demand; and the debtor is entitled to avail himself of this consideration in defense.” And in Good v. Cheesman, Lord Tenterden, C. J., says: “Then is not this a case where each.creditor is bound in consequence of
And should it he suggested that the purchase of the oil land and oil leasehold nominally for the price per acre contemplated, or expected to be paid by the subscribers at the time of subscription, or the obtaining of equal quantity of land and leasehold, though at a greatly reduced price, satisfied the agreement between the parties, and was a full consideration or equivalent to each subscriber who paid his subscription, so that some of the subscribers might pay in full and others pay nothing, and yet all share equally in the land and leasehold, or become jointly interested, or part owners in proportion to the sums respectively subscribed and agreed to be paid by each, whether actually so paid or not, this, I answer, would be a gross fraud upon the
I. am aware that the case of Trustees of Hamilton College v. Stewart, 1 Comstock, 581, is in conflict with the principle here asserted. That case is cited and relied upon here, but I am not satisfied with the decision, and not disposed to follow it. It stands alone, or nearly so, and I think the authorities above cited, which constitute by far the greatest weight, lay down the sounder and better rule, and that which is more in harmony with reason and justice. But more, than this, the subscription there was to a public object — to the funds of the college, in which every member of the community had the same interest as the subscribers, and the reasoning of the court proceeds altogether upon the nature of such a subscription, and is wholly inapplicable to a subscription like the present. It may be conceded that the court there was right, and still it does not affect this subscription. The reasons for holding the agreement there void do not exist here. This is a private business or commercial agreement, and, as I have already said, not distinguishable at all from agreements between creditors. No case has been found, nor I believe can be, where such an agreement has been held void, for want of consideration or otherwise. It is the policy of the law that there should be the utmost liberty in all matters of contract so long as the engagement tx-auscends. no positive rule of law or of morality.\
It is for these reasons that I think the promise of the defendant was not without a good consideration, and that upon the assembling of the subscribers, and their agreement to invest the sums already subscribed as alleged in the complaint, it became fully operative and obligatory. But the complaint further shows that, very soon after, nearly all the other subscribers paid in their shares and purchased the lands, of which the defendant claims his proportion, and has had the same adjudged to him. This advancement of money by the other subscribers, and purchase of the lands, did, within all the authorities, operate to bind the defendant, if he was not bound before. I think he was bound before, though perhaps no action could be maintained, or rather no damages recovered, until some one or more of the subscribers had paid in their money. It seems to be of the nature of the contract, that there can be no recovery upon it until it has been in part executed. Payment by some of the subscribers is necessary in order to entitle them to sue
Judge Metcalf, in his Law of Contracts, p. 185, collects many authorities, and sums them up by saying that, “ though there is not a uniformity in the decisions on the question whether there is a sufficient legal consideration of such promises, yet thus much is now the generally adopted doctrine, namely, that where something has been done, or some liability or duty assumed, in reliance upon the subscription, in order to carry out the object, the promises are binding, and may be enforced, although no pecuniary advantage is to result to the promisors.” Besides several of the authorities above referred to, he cites the following: McDonald v. Gray, 11 Iowa, 508; Commissioners, etc., v. Perry, 5 Ohio, 59; Peirce v. Ruley, 5 Ind. 69; Johnston v. Wabash College, 2 Ind. 555; Robertson v. March, 3 Scam. 198; M'Auley v. Billinger, 20 Johns. 89; Reformed Protestant Dutch Church v. Brown, 29 Barb. 335; Farmington Academy v. Allen, 14 Mass. 172; Bryant v. Goodnow, 5 Pick. 228; Ives v. Sterling, 6 Met. 310, 318; and Mirick v. French, 2 Gray, 420.
Having thus determined that there was no lack of consideration for the promise, the next question to be considered is, whether it must fail for want of a promisee or person to accept and enforce it. It is insisted that the promise was made to no person, and therefore is void. If I am correct in the above conclusions, it follows that this objection is without foundation. It is a promise on the part of one subscriber to all the others, and an action may be maintained in the name of the others to enforce it. And such, I have no doubt, is the law. And here the case of George v. Harris, 4 N. H. 533, is again in point. The
I am of opinion that the order overruling the demurrer to the complaint should be affirmed.
It appears to me that the complaint in this case does not state facts sufficient to constitute a cause of action.
I shall not stop to inquire whether the plaintiff has the legal capacity to bring the action on the subscription paper. The proceedings in the case of Collins et al. v. Case et al., are set forth in the complaint for the purpose of showing that the plaintiff was appointed a receiver in that action, and that the original contract, containing the subscription of the defendant, had, with other property, been transferred to him. But it seems to me that there are other obvious and insuperable difficulties in th,e way of maintaining the action.
The subscription paper sued upon, and the allegations of the complaint, are set forth in the foregoing statement of the case. It will at once be observed that there is no promisee named in this subscription paper; that Goddard, Steers & Co. are not a party to it; and there is no engagement whatever upon the part of any one to do or to forbear to do anything as a consideration for the promise of the defendant. “ The general principle is recog
I have quoted these remarks, not on account of any novelty in the legal propositions laid down — for indeed they are elementary — but partly because of the high character for learning and ability .of the court which sanctioned them, and more especially for the reason that they were made in an action brought upon a subscription paper, where the court had occasion to consider questions quite analogous to those arising on this demurrer. And, keeping in view these very plain and obvious legal principles, let us inquire, What was the consideration for the defendant’s undertaking? It is said that the promise of the co-subscribers to the paper was a sufficient consideration for it; in other words, that the promise of each was a good consideration for the promise of the others. They promised to pay the sums set opposite their respective names, for the purpose of purchasing thirty-six- hundred acres of oil lands. Now it appears from the complaint that this object has been accomplished. The lands have' been purchased; the plaintiffs — or the subscribers whom the receiver represents — have paid no more money than they expected to pay, and they have the
I think, in principle, the case comes fully within the doctrine of The Trustees of Hamilton College v. Stewart, 1 N. Y. 581; Phillips' Limerick Academy v. Davis, 11 Mass. 114; Boutell v. Cowdin, 9 id. 254; Trustees of Bridgewater Academy v. Gilbert, 2 Pick. 579, and cases of that character. It is true, it is alleged in the complaint that by the judgment in the action of Collins et al. v. Case et al., the defendant is entitled to a share of the oil lands, and of the proceeds of certain notes
It is said upon the brief of the counsel for the plaintiff, that the contract sued on is strictly of a business or trading character, having no analogy to a subscription for a religious or charitable purpose. But this view does not overcome the difficulty of a want of a consideration to sustain the promise of the defendant. The subscription became valid and binding upon each and every subscriber thereto when made, or it did not become obligatory at all. And in order to be binding, it was essential that the promise should be founded upon a sufficient legal consideration. If the subscription was invalid when executed, it remains so still; for nothing was subsequently done by the plaintiffs which made it binding upon the defendant.
It is suggested that this case is strictly analogous to a mutual agreement between creditors to accept the
For these reasons I think the demurrer to the complaint should have been sustained.
Upon a division of opinion between the other two members of the court, the order of the circuit court was affirmed.