Court Opinion

ID: 5231847
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:58:15.086467+00
Date Added: 2024-06-11T08:27:40.548424
License: Public Domain

Kruse, P. J.:
The evidence warranted no other inference than that plaintiff’s assignors rebuilt the insulator plant in the expectation of receiving the subscriptions made by these defendants and others, and to some extent at least in reliance thereon. The purpose for which the subscriptions were made, whichever may have been the true form of the subscription paper, was, primarily at least, to secure the reconstruction of the insulator plant. If it was in the form which' plaintiff asserts, without. other limitation, then plaintiff, as- the assignee of the right therein of the parties who actually rebuilt the plant, was entitled to collect the subscription. The purpose of such a subscription agreement is to induce the parties who are or may become rightfully in the project of rebuilding to proceed with the enterprise. If acted upon by such parties, then the subscription agreement becomes ah enforcible contract for their benefit. It is then no longer a naked promise to give or contribute a sum of money; but is, when thus acted upon, supported by a consideration sufficient to establish the agreement as a valid contract to pay the sum subscribed. (Keuka College v. Ray, 167 N. Y. 96.)
The learned trial judge, in his charge to the jury, submitted for their determination the question whether the subscription agreement was in the form as claimed by the plaintiff, or that asserted by defendants; further instructing them that if they found it to • have been as claimed by the former, plaintiff was entitled to a verdict; but if they should find that defendants’ version was correct, then they should further determine whether ;a company, within.-the meaning of. that ..tórm-.as'- used therein,' had-been, organized' for the. ,pur- • pose, .of building and'.'equipping the--plant'.as '.thereto' expressed. *47It was conceded that no corporation had been formed for that purpose. But there was evidence that plaintiff’s assignors had, while the reconstruction of the plant was proceeding, formed a partnership and were acting as partners in that business under the name of M. IP. Locke Manufacturing Company. The jury was in effect further instructed that the words “ company to be organized ” as used in the subscription agreement, if found to be in the form claimed by defendants, were ambiguous; and might mean either a corporation or a partnership to be organized, dependent upon the understanding and intention of the parties as to the meaning of the words; and then left it to the jury to determine what the parties understood that expression to mean. If they should find that it was understood and intended that a corporation was to be organized for that purpose, then, as the court charged, plaintiff was not entitled to recover; but if the partnership as formed met the understood requirements of the contract, then plaintiff was entitled to a verdict. Under the instructions of the court, to which no exceptions on the part of the defendants appear hi the record, the verdict of the jury in plaintiff’s favor seems to be supported by the evidence. Uor was the verdict disturbed by the trial court as being against the weight of the evidence. The single ground of reversal indicated in the opinion of the court was the exclusion of evidence offered by defendants to the effect that their subscription to the agreement as made was not to become effective and a 'valid subscription until • another subscription by designated parties in an amount equal to defendants’ subscription had been obtained. The exclusion of this evidence was considered by the trial judge as presenting error sufficient to require setting aside the verdict. It is to be observed that there is no suggestion that any such condition attached to defendants’ subscription appeared either in the paper itself or in connection with defendants’ signature thereto; nor is there any claim that either plaintiff or his assignors at any time down to the time the action was brought had any intimation of such a claim, or even that the fact that defendants’ claim that their subscription was a conditional one only had been called to the attention of any other subscriber to the paper. When the subscription was made by defend*48ants without any condition appearing on the paper, or being in any way communicated to the parties for whose benefit it was ostensibly made, ‘it became in effect an offer to pay the sum subscribed on compliance by those parties with the terms of the agreement. Acceptance of the contract on their part and their reliance thereon is shown by the fact that they thereafter continued the work of reconstruction of the plant with knowledge of the fact of defendants’ subscription and its purpose.
Under the circumstances defendants are estopped from now claiming that their subscription was to become effective as an actual subscription only in the event the condition, which it was sought by the' excluded evidence to prove, was fulfilled. Such an, oral, secret collateral agreement is at variance with the terms of the writing and ineffectual. (Phœnix Warehousing Co. v. Badger, 6 Hun, 293; Yonkers Gazette Co. v. Jones, 30 App. Div. 316; Lyell Avenue Lumber Co. v. Lighthouse, 137 id. 422; 151 id. 902; affd., 208 N. Y. 628.) It follows that this evidence was properly excluded.
It is also urged that it was error to exclude the evidence as to defendant Mnucane’s understanding of what was meant by the word “company” as used in the subscription paper which he testifies he signed. While the meaning of that word as used in the subscription agreement was properly submitted to the jury as a question of fact for their determination in the event they should find defendants’ version of the contract to he the true one, yet the witness’ understanding of its meaning when he signed was not material or competent on that question, there being no allegation or claim that the signature was obtained'by fraud or was made by reason of misconception or mistake.
The order should be reversed, with costs, and defendants’ motion for- a new trial denied, with ten dollars costs, the verdict of the jury reinstated and judgment thereon entered for the plaintiff.
All concurred; Bobson, J., not sitting.
Order reversed, with costs, and verdict of jury reinstated.