Case Name: William H. Stevens v. Jeffrey Corbitt
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1876-04-11
Citations: 33 Mich. 458
Docket Number: 
Parties: William H. Stevens v. Jeffrey Corbitt.
Judges: The other Justices concurred.
Reporter: Michigan Reports
Volume: 33
Pages: 458–462

Head Matter:
William H. Stevens v. Jeffrey Corbitt.
Railroad: Voluntary subscriptions: Completion of the road. Where a party promises to contribute in aid of a proposed railroad, it would be implied as a condition, in the absence of express conditions, that the road should be constructed and operated; and upon this being done within a reasonable time, where no time was fixed, the promise would become operative and binding, and the party making it could not thereafter repudiate it.
Promises in aid of proposed railroad: Company organized. The fact that a company was organized to build the road, at the time the promise was made, or that even in the absence of such a promise the road would have been built, would not defeat the promise.
Railroads: Voluntary subscriptions: Conditional promises: Completion of road: Condition performed. Where such a promise is made to some one necessarily connected with or interested in the work being done, for the benefit of the company that has begun, or is about to undertake the work, then, upon completion of the work, or upon the performance of the conditions upon which the promise was made, the liability of the promisor becomes complete; there are also cases where expense is incurred or an obligation created under the promise, where a like liability would follow.
Conditional promises: Performance of condition: Reliance on the promises. In all such cases the fair inference is, that the work was done or the expense or liability incurred in reliance upon the subscription or jjromise.
Voluntary subscriptions: Interest. An allowance of interest on such a subscription from the date of the completion of the road, where the promise was to pay one year after its completion, and nothing is expressed about interest, is error.
Conditional promise: Uncertain event: Interest: Demand: Suit brought. An agreement to pay within one year from the happening of an uncertain event ought not to bear interest, in the absence of any express promise to pay interest, until after demand, or where no demand was made* until suit brought.
Heard January 12.
Decided April 11.
Error to Montcalm Circuit.
M. G. Palmer and Lemuel Glute, for plaintiff in error, argued that the declaration averred a promise based on an executed consideration, and that to support a promise grounded on a past consideration it must appear that the consideration moved at the recpiest of the promisor:
Comstock v. Smith, 7 Johns., 87; Parker v. Crane, 6 Wend., 647; and a mere voluntary courtesy to the defendant will not. support an after-made promise: 1 Smith’s L. C., 265-7.
Notwithstanding the words “value received,” it was. competent to show there was in fact no consideration: Osgood v. Bringolf, 32 Iowa, 265; Jerome v. Whitney, 7 Johns., 321; Colbath v. Jones, 28 Mich., 280; People v. Howell, 4 Johns., 226; Fink v. Cox, 18 Johns., 145.
While a promise to pay a railroad company a specified sum of money on condition of its building a certain road in a specified time, may in some cases, on performance of the condition, be clothed with a valid consideration which related back to. the promise and thereby became a valid and binding contract, it must be made to appear not only that the offer made by the promise was accepted by performance, but also that the performance was in reliance upon the promise; and the acceptance and performance must bo by the promisee.
If the contract be treated as a subscription, it must be shown the road was constructed by the promisee in reliance on the promise: People v. Taylor, 2 Mich., 253; Underwood v. Waldron, 12 Mich., 73; and the declaration should have averred the promise to be to give so much to build the road, and that the oiler was accepted, and the road built relying on the offer: Utica, etc., R. R. Co. v. Brinckerhoff, 21 Wend., 141.
George A. Smith and Blanchard & Bell, for defendant in error.

Opinion:
Marston, J:
Plaintiff in error executed and delivered an instrument in writing, of which the following is a copy:
"$321 00. Stanton, Mich., July 8, 1872.
"For value received, I promise to pay to the order of H. H. Smith, Esq., three hundred and twenty-one dollars, one year from the time when the railroad proposed to be built on some point on Detroit, Lansing and Lake Michigan Railroad, not more than five miles from the station of that company in Ionia, north to Stanton, shall be open, and trains shall pass over it to and from Stanton to said point of junction; the said road, under present or future to bo formed organization, to be called The Ionia, Stanton and Northern Railroad;' provided work bo commenced on said • road within forty days, and that said trains are run. thereon by the first of May, A. D. 1873.
"William H. Stevens."
This agreement was afterwards properly assigned to the defendant in' error, who commenced an action in March, 1875, to recover the amount claimed to be duo thereon.
The court found that II. II. Smith in July, 1872, was superintending the D., L. & L. M. R. R. Co.,, and was the active business man in building the Ionia, Stanton & Northern Railroad, and was president of both roads; that all the terms and conditions of the agreement, as to the time, manner, etc., of building the road, had been fulfilled, and that trains were running regularly over it to and from Stanton to the junction and Ionia station about the 28th of April, 1873. Judgment was rendered in favor of Corbitt for the principal, with interest thereon from Ajnil 28, 1873.
A question was raised as to the form and effect of the written assignment made by Smith; also, whether it could be said that trains were running regularly over the road while the engine had to back one way for want of a turn .table at Stanton. We do not, however, find any error in the ruling of the court upon these, or some other questions that wore raised, and we do not consider them of sufficient general importance to discuss them at present.
It was insisted that the organization of the company and building the road did not affect this agreement; that in order to entitle the plaintiff to recover, it must appear either .that there was some promise or agreement to build the road, made to Stevens as a consideration for his promise, or that the company went on and built the road in reliance upon Stevens' promise to pay, and it is insisted that there was no evidence given tending to bring the case within either of these propositions.
Where a party promises to contribute in aid of such' an improvement, in the absence of express conditions, it would be implied as a condition, that the road should be constructed and operated, and upon this being done within a reasonable time, where no time was fixed, the promise would then become operative and binding, and the party making the promise would not thereafter be at liberty to repudiate it. The fact that a company was organized'to build the road at the time the promise Avas made> or that even in the absence of such a promise the road would haye been built, would not be sufficient to defeat it. The mere fact that a company is organized to build a road does not necessarily insure the work being done, or so make it the duty of the company to commence work, or complete the road, that a promise to assist by voluntary contributions would necessarily be without consideration' and Aroid,
Many private enterprises, of a quasi public nature, already commenced, or in contemplation, are largely dependent upon private, voluntary subscriptions to carry on and complete the work. Where such a promise is made to some one necessarily connected with, or interested in the work being done, for the benefit of the company about to, or which may have undertaken the work, then, upon completion of the same, or upon the performance of the conditions upon which the promise Avas made, the liability of the promisor becomes complete. There are also cases Avhere expense is incurred, or an obligation created under the promise, where a like liability Avould follow.
In all such cases the fair inference is, that the work Avas done, or the expense or liability incurred, in reliance upon the subscription or promise, and the person making the same Avould not be permitted thereafter to withdraw his offer. "In such case'the question is not properly whether there is any consideration for the agreement, but whether there is any agreement at all." — Underwood v. Waldron, 12 Mich., 90; Comstock v. Howd, 15 Mich., 242. This question is fully discussed in Underwood v. Waldron.
The court allowed interest from the time the road was completed, viz.: April 28, 1873. There is no express promise to pay interest, and according to the express terms of the contract the principal does not become due until one year from the time the road proposed should be open and trains pass over it. This, under the finding of the court, would make the principal become due April 28, 1874. If Stevens was liable to pay interest at all, it could only be computed from this latter date.
It may be questionable whether under the facts in this case interest could be allowed except from the time a demand was made; and if none was made, then from the time of the commencement of the suit. In Beardslee v. Horton, 8 Mich., 564, it was said, "when credit is given for a specified or indefinite time, interest is not allowable in the absence of a special agreement to pay interest; but after the expiration of the time in the one instance, and a demand in the other, interest is allowed." At the time this agreement was given, the time when it would become due, if at all, was indefinite. True, there was a time fixed within which, if trains were not running, it never should become due, but within the limit there fixed the time was indefinite; it depended upon the happening of an event which might not occur at all, and if it did, was so uncertain that we think a demand should have been made, or Stevens, in some way, notified that the conditions had been performed, and that his obligation had become due and payable.
The plaintiff in the court below was, under the finding, entitled to recover the amount of the note, with interest thereon from the date of the commencement of suit. As to all over this amount, the judgment must be reversed, and affirmed as to the residue, the plaintiff in error to recover his' costs in this court.
The other Justices concurred.