Case ID: ohio-st_43/html/0537-01.html
Source: Caselaw Access Project
Author: {"author": "Owen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wallace v. Townsend.
    
      Corporation — Offer to subscribe to stock — Revocation by death.
    
    An offer in writing to subscribe to the capital stock of a railroad companj', conditioned upon the construction of its line of road along a designated route, is revocable at the option of the party making such offer at any time before its delivery to and acceptance by such company; and his death before such delivery and acceptance works such revocation.
    Error, to the District Court of Jefferson county.
    The Cleveland, Tuscarawas Valley and Wheeling Railway Company brought its action in the court of common pleas of Jefferson county, upon the subscriptions set out in the findings of fact which appear below, against William II. Wallace and Spalding K. Wallace, executors of Henry Wallace, deceased, for the recovery of the amount claimed to be due upon such subscriptions. The trial court, upon the request of each party, stated its findings of fact and conclusions of law separately, as follows:
    “ That in the early part of the year 1877,- The Cleveland, Tuscarawas Valley and Wheeling Railway Company, being a railroad company duly incorporated under the laws of the state of Ohio, owning and operating a railroad from the mouth of Black river on Lake' Erie, to Uhrichsville, in Tuscarawas county, and contemplating an extension of its road beyond Uhrichsville, propose to make such extension by way of the valley of Stillwater, and the valley of Wheeling creek to the Ohio river, at Bridgeport, opposite the city of Wheeling, provided that subscriptions to the capital stock of said company would be made by persons residing along the line of such proposed extension, and in the neighborhood of the southern terminus thereof, aggregating the sum of .15250,000.00; that citizens of Wheeling knowing of such proposition, and being desirous to promote such extension, held a public meeting, and at such meeting appointed a commitee to solicit subscriptions to the capital stock of said company; that Henry Wallace, the testator of the defendants, then in full life, was present at the meeting, and thereafter at the solicitation of said committee, subscribed in a book furnished by the committee, a paper writing of which the following is a copy: " We, the undersigned, do hereby respectively subscribe to the capital stock of The Cleveland, Tuscarawas Valley and Wheeling Railway Company, the number of shares, (50) fifty dollars each, we have set opposite our respective signatures, upon the conditions that the contemplated extended line of the railroad of said railway company shall be located in the valleys of Stillwater and Wheeling creeks to the Ohio river, in the town of Bridgeport, Ohio, opposite the city of Wheeling, and thence along the west bank of said river to a point on said river in the town of West Wheeling, Ohio, and as soon as said railroad shall be so located, and the work of construction commenced in Wheeling creek valley, we agree to take the number of shares aforesaid, and then agree to pay five (5) dollars on each share of said stock, so by us subscribed, and the residue thereafter in such installments and at such times and places as may be required by the directors of said company, but said installments shall not exceed ten (10) per cent per month from the time when said first payment shall become due as aforesaid. It is hereby farther conditioned that these subscriptions shall not be binding unless the work of construction shall be commenced on or before July 1, 1877, (signed) II. Wallace, 20 shares,’ and delivered said book to said committee, such paper writing having been previously subscribed by divers other persons. And said Henry Wallace afterwards at the solicitations of said committee, subscribed in another book furnished by the committee, another paper writing, of which the following is a copy: ‘We, the undersigned, do hereby respeetivety subscribe to the capital stock of the Cleveland, Tuscarawas Valley and Wheeling Railway Company, the number of shares set opposite our names of fifty dollars each, on the conditions that said railway shall be constructed to the Ohio river, opposite the city of Wheeling, by the valley of Wheeling creek; and as soon as the work of construction is commenced of said railway, on said creek, before July 1, 1877, we agree to pay five dollars on each share so subscribed, and the residue thereafter in such installments, at such times and places, and to such person or persons as may be required by the directors of said railway, 
      bat said installments shall not exceed ten per centum per month, after said first payment shall become due as aforesaid. Wheeling, West Va., March 1, 1877. (Signed), H. Wallace, by D. O. L., 20 shares’; and delivered said last mentioned book to said committee, such last mentioned paper writing having been previously subscribed by divers other persons. Afterwards the said Henry Wallace departed this life, said books still remaining in the custody of said committee. After the death of said Henry Wallace, and all the subscriptions to the capital stock of said company which could be procured along the line of said proposed extension, and in the neighborhood of the southern terminus thereof, had been obtained, and which aggregated, a sum less than $250,000.00, at the instance of surviving subscribers, the evidences of all subscriptions which had been so procured, including the books aforesaid, were tendered to said company, and said company accepted the same as subscriptions to the capital stock of the company, and agreed to extend said railroad as had been proposed as aforesaid, and from the town of Bridgeport along the west bank of the Ohio river to a point on said river in the town of West Wheeling, Ohio. That at the time when said company accepted of said subscriptions, aud agreed to make such extension, the officers of the company had no notice or information whatever of the death of Henry Wallace; and that the company did, before the first day of July, a. d. 1877, commence the construction of said railroad in the valley of Wheeling creek, and did, within a reasonable time thereafter, fully complete the same. Aud the court being of the opinion that upon the facts so fouud the law of this case is with the plaintiff, does consider and adjudge that the plaintiff recover of the defendant the sum of twenty-six hundred and four dollars and forty-four cents, and also their costs herein expended, taxed at $-, to be made of the goods and chattels and effects which were of the said Henry Wallace, remaining in their hands to be administered.”
    The district court affirmed the judgment so rendered upon these findings of fact. To reverse these judgments, the present proceeding is prosecuted against Oscar Townsend, receiver of the plaintiff below.
    
      Daniel Peck and William, P. Hayes, for plaintiffs in error:
    The subscriptions sued on were conditional. At the time of the subscriptions they were not effective, and might never become so, for they might never be delivered to the corporation, and if tendered might not be accepted.
    When Wallace signed the papers, the subscriptions were not made in the company’s book, and the coi’poration made no promise to award the stock. There were no contracting parties at the time of the making of the subscription, nor could there be until the papers were accepted by the corporation. There was no mutuality. Lawler v. Burt, 7 Ohio St. 349; Turnpike Co. v. Coy, 13 Ohio St. 90 ; Fanning v. Insurance Co., 37 Ohio St. 342.
    The contracts were not absolute, but conditional. Burnet v. Bisco, 4 John. 237; Comstock v. Smith, 7 John. 87 ; Lake Ontario Shore R. Co. v. Curtiss, 80 N. Y. 219; Trustees Hamilton College v. Stewart, 1 N. Y. 581; Livingston v. Rogers, 1 Caine’s Rep. 583.
    We refer to the case of Utica & Schenectady R. Co. v. Brinckerhoff, 21 Wend. 139. This was an agreement to locate a road in a particular place. The court in the opinion, say : “ The fact that they afterward located the road agreeably to the terms of the proposition is, of itself, nothing; it should have appeared that they had agreed with the defendant thus to locate it as a consideration for the promise. The promise of each must be concurrent and obligatory at the same time to render either binding,- and should be so stated in the declaration.”
    The death of Wallace revoked all authority any one had as his agent over his signature. A delivery of such paper is as necessary a part of the execution of the contract as though it had been a promissory note. How much better was the delivery than if a stranger, finding it in the street, had delivered it ?
    
      Tho power to deliver the paper to the corporation was a naked power, and such power died with tho party creating it. Megary v. Funtis, 5 Sandf. (N. Y.) 376; Bergen v. Bentnett, 1 Caine’s Cas. 14.
    An agent can not delegate his authority to another unless expressly directed by tho power to do so; nor can one, by any act of his own, make himself the agent of another. A dissolution of a firm, by death or otherwise, terminates the agency. Martine v. International Life Ass. Co., 5 Lansing, 535; s. c., 62 Barb. 181; s. c., affirmed, 53 N. Y. 339; Grinnell v. Buchanan, 1 Daly, 538.
    Where the authority is conferred upon several, they must all act together. Hawley v. Keeler, 53 N. Y. 114.
    Acts, after the termination of the authority, are void. Kip v. Howes, 2 Sweeney, 106; Van Vlieden v. Welles, 6 Johns. 89.
    
      J. TY. Tyler, for defendant in error :
    This is a stock subscription to a railroad company duly incorporated and organized under the laws of Ohio. Each subscriber had an interest in the subscription of every other subscriber, and in all the subscriptions, so that the amount thereof might be applied to the accomplishment of the object, which was the location of a railroad in a certain place, and the construction thereof to be commenced before July 1,1877.
    No subscriber could withdraw his name from that subscription without the consent of all the subscribers thereto. It being a contract between the subscribers to do so much, each and all for an object jointly desired, which might not be accomplished unless all should be bound; any arrangement even to release one or more would be fraudulent and void. Anderson v. New Castle & Rich. R. Co., 12 Ind. 376.
    These subscription books were left in the hands of a committee of subscribers who had an interest in the acceptance of the same by the railway company; and the subscribers, with whom these books were left, had power to deliver them to the company.
    
      This power, then, was coupled with a common interest, and was, therefore, irrevocable. 1 Par. Con. (7th ed.), *72-76; Bromley v. Holland, 7 Ves. Jr. 28; Hunt v. Rousmanier, 8 Wheat. 201.
    But payment to an agent in ignorance of the death of the principal is good. Cassiday v. McKenzie, 4 W. & S. 282; Smout v. Ilbery, 10 Mees. & Wels. 1; Tate v. Hilbert, 2 Ves. Jr. 118; Galt v. Galloway, 4 Pet. 333; Coney v. Sanders, 28 Ga. 511.
    The credit arising in such cases from an ostensible employment sometimes continues, with regard to those who have been accustomed to deal on the faith of the employment, until they have notice of its termination. Trueman v. Loder, 11 Ad. & El. 589; Williams v. Birbeck, 1 Hoff. Ch. 359. There is also an exception to the general rule where the agent has a power coupled with an interest. Knapp v. Alvord, 10 Paige, 205.
    But if we treat these subscriptions in the hands of this committee as an offer or proposition to the company for its acceptance, then this offer, having been accepted without the knowledge of the death of Wallace, is binding upon his legal representatives as a valid contract. Mactier v. Frith, 6 Wend. 103 ; Tayloe v. Mer. Fire Ins. Co., 9 How. (U. S.) 890; Levy v. Cohen, 4 Ga. 1; Vassar v. Camp, 11 N. Y. 441; Dunlop v. Higgins, 1 H. L. Cas. 381.
    
      Alexander § McDonald, also for defendant in error :
    The papers signed constitute a subscription to the stock, and not an agreement to take stock; it certainly was an abso-. lute subscription to the stock upon the performance, by the company, of the conditions named in the subscription. See 1 Potter on Corp., sec. 229; Chamberlain v. Painesville & H. R. Co., 15 Ohio St. 225; Ashtabula & N. L. R. Co. v. Smith, 15 Ohio St. 328.
    Any subscription made in whatever form it may be, and whether made on the regular subscription books of the company or not, is binding on the subscriber. Brownlee v. Ohio, Ind. & I. R. Co., 18 Ind. 68.
    
      After subscribing to the stock Wallace delivered the books containing-his subscription to the committee. He parted with all control over his subscriptions for some other person to use; and to what other person could it be than the company for whom they were intended ?
    Where a party executes a deed or contract and delivers it to another person for the grantee, on certain conditions, if such third person deliver the same to the grantee, even after the death of the grantor, although such third person was not authorized by the grantee to receive it, it would be a good delivery. Mather v. Corliss, 103 Mass. 568; Simonton’s Est., 4 Watts (Pa.) 180; Ford v. Flint, 40 Vt. 382.
    There was a perfect delivery. Ish v. Crane, 8 Ohio St. 521; s. c., 13 Ohio St. 574; Bish. Con., sec. 766; Farley v. Palmer, 20 Ohio St. 225; Martindale Con., sec. 211; Slingsby’s case, 3 Coke Rep. 35; Wheelwright v. Wheelwright, 2 Mass. 447; s. c., 3 Am. Dec. 66; Stone v. Duvall, 77 Ill. 475; Foster v. Mansfield, 3 Met. 412.
   Owen, J.

As we rest the disposition of this case upon the single question, whether the facts found bjr the trial court were sufficient to authorize the judgment rendered by it, none of the other numerous questions which the record presents are discussed in this opinion. By the findings of fact it will be seen that the railroad company proposed to extend its line of road over a designated route to the Ohio rivei’, opposite the city of Wheeling, provided that subscriptions to its capital stock would be made by persons residing along the proposed line and near the southern terminus thereof, aggregating the sum of $250,000. That Ilenry Wallace, with other citizens of Wheeling, knowing of such proposition and being desirous to promote such extension, held a public meeting and appointed a committee to solicit subscriptions to the capital stock of the company. That Wallace thereafter, at the solicitation of this committee, signed the two papers declared upon, each in a book furnished’ by the committee. That other persons had previously signed these subscriptions. That upon his signing these writings, respectively, he delivered them to the committee. That he soon thereafter died — these books remaining in the hands of the committee.

That after his death, and when all the subscriptions to stock had been procured along the proposed line and near the southern terminus that the committee was able to secure, and which aggregated less than the proposed $250,000, the evidences of all these subscriptions were, at the instance of the surviving subscribers, tendered to and accepted by the company, which then agreed to extend its line of road as had before been pi’oposed. That at the time of such acceptance and agreement the officer’s of the company had no notice or information of the death of Henx’y Wallace. That before July. 1, 1877, the company commenced the construction of the proposed^ extension, and did, within a reasonable time thereafter,.fully, complete it.

Did the estate of Henry Wallace become bound by these subscriptions upon their delivery to and acceptance by the railroad company ?

The proposition of the company was made at lax’ge,. and not to these subscribers, mox’e than to any others, who .should first subscribe the required $250,000. It does not even appear that the company knew, at any time prior to Wallace’s death, of the existence of this committee, or that these subscriptions wex’e being procured. The company was not bound to accept Wallace’s subscription at any time during his life. It had made no agreement with Wallace or with his co:subseribers. So far as the findings show, the company had no knowledge that Wallace ,had subscribed, and nothing was done by it on the faith of his subscription prior to his death. Suppose that another committee, having heard of the proposition of the company, had succeeded in procuring the requisite $25.0,000 in subscriptions, tendered it to the company, which had accepted it, and agreed to perfox’m its conditions before this committee had tendered its subscriptions; would it be contended that the company -would have been under any obligation to accept them ? If any thing is claimed from the proposition of the company and its acceptance by the subscribers, it is a sufficient answer, to say that the conditions of the proposition have never to this day been performed; that after the death of Wallace his surviving subscribers, finding that they had failed to raise the amount which the company had demanded in its proposition, proposed new terms to the company, tendered a less amount in subscriptions, which was accepted; and thereupon, for the first time in the history of these transactions, the company agreed, on its part, to perform the conditions upon wffiich the subscriptions were made. And this was a new contract, to which Wallace was never a consenting party. Thus we see that the negotiations which actually led to the creation of mutual .and binding obligations between the company and the surviving subscribers transpired after the death of Wallace. It is maintained, however, that various persons subscribed after Wallace and on the faith of his subscription. This does not appear from the findings of fact. For all that is shown by this finding, Wallace may have been the very last subscriber. If these surviving subscribers consented to the delivery to the company of a dead mao’s subscription, they are in no situation to- complain. It is also maintained that the company built the road on the faith of the subscription of Wallace and his co-subscribers. It appears that at the time of the company’s acceptance and agreement, its officers had no knowledge of Wallace’s death; but so far as the record shows to the contrary, it began the work with full knowledge that this committee had teudered it a dead man’s paper. Counsel for the company maintain that the committee so often referred to, which took these subscriptions, was rather the agent of the railway company than of Wallace, . . the company having ratified their action.” If this view is tenable, then, by a familiar rule, notice to this committee, was notice to the company of the death of Wallace ; for it will be observed that there is no finding that the company had no notice of Wallace’s death, hut that its officers had none. Ordinarily notice is carried to a corporation through its officers, hut not necessarily so. While its officers are in a sense agents, its agents are not necessarily officers. Hence if this committee was the agent of the company, by reason of the ratification of its acts by the latter, notice to the committee was notice to the company; and it would be incumbent upon the latter to show that its agent had no notice of the death of Wallace. This is not shown. We do not deem it necessary, however, to rest our determination upon this view.

Until some action is taken on the basis of a subscription to a benevolent or other enterprise, it may be revoked. The promise in such case stands as a mere offer, and may? by necessary implication, be revoked at any time before it is acted on. It is the expending of money, etc., or incurring of legal liability, on the faith of a promise, which gives the right of action, and without which there is no right of .action. Until action upon it there is no mutuality, and being only an offer, and susceptible of revocation at any time before being acted upon, it follows that the death- (or insanity) of the promisor, before the offer is acted upon, is a revocation of the offer. Pratt v. Trustees, 93 Ill. 475. See also Beach v. Church, 96 Ill. 179; 1 Wharton Con. §§ 12, 528; Pollock Con. 20 ; Dickinson v. Dodds, L. R. 2 Ch. Div. 475; Tayloe v. Mer. Fire Ins. Co., 9 How. (U. S.) 390; 1 Redfield Railways, *203.

Here was an unaccepted conditional subscription by Wallace to the capital stock of the company. Indeed, looking to its substance and plain intent rather than to its form, we find it to be no more than an offer to subscribe to stock upon certain named conditions. It was not a subscription to stock in the ordinary sense of that term. The company was not a party to it, and was under no obligation to accept it at any time during the life of Wallace. It was at best an unaccepted proposal. Before its acceptance, and indeed (so far as it is made to appear to us) before the party do whom it was made had notice of it, the proposer died. It was a proposal capable of revocation at any time before acceptance, and death worked its complete revocation. There was error in rendering judgment upon it against the defendants below, for which error the

Judgments below are reversed.