16 Haw. 390 | Haw. | 1905
OPINION OF THE COURT BY
This was an action of assumpsit on an agreement made October 31, 1899, between the plaintiff and the defendant, whereby in consideration of the plaintiff allowing the defendant to use its system in the Hawaiian Islands and supplying instruments for five installations on Oahu, Kauai, Molokai, Maui and Hawaii the defendant agreed to erect poles for the system and furnish the labor for them, and to pay the plaintiff $11,000, one-half on January 1 thereafter and the rest when the installations were working, and also yearly rent of £500 for five years, the plaintiff agreeing to have the instruments delivered and installations complete and the system in working order at the earliest date practicable, and to furnish three experts to remain until the work was completed and the installations in working order. Marconi and Goodbody and their attorney, Bottomley, in behalf of the plaintiff, made the agreement with the defend
The plaintiff’s claim may thus be stated, viz.: The obligation of a contract is not avoided by assigning it to a corporation. A corporation not in existence cannot be an assignee of a contract nor assume its obligations, and after becoming a corporation cannot ratify a contract which it was not even as a de facto corporation capable of making. Undoubtedly the jury could have found upon the evidence that the contract was made with the mutual intention that it would be assigned to a corporation to be formed for the purpose of taking it, and that the assignment was made accordingly and assented to by the subsequent conduct of the plaintiff, with the implied agreement that the assignment should operate as a release of the defendant from his obligation. Or the evidence would have justified a finding of a “waiver of the original contract by the mutual understanding of the parties.” Van Vlieden v. Welles, 6 Johnson 89.
The law upon the subject is, we think, correctly stated as follows: “When a promoter binds himself personally by a contract, the subsequent adoption or assumption of the contract by the corporation, when organized, will not relieve him from liability, even though the corporation may thereby become liable, unless the other party to the contract consents, so that there is a novation; for it is a well settled principle of the law of contracts -that a party to a contract cannot relieve himself from its obligations by the substitution of another person, without the consent of the other party. If, however, on the adoption by a corporation of a contract made by its promoters, it is agreed
The exceptions are overruled.