Court Opinion

ID: 6474132
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:33:29.670251+00
Date Added: 2024-06-11T15:53:54.633043
License: Public Domain

CUNNINGHAM, J.
The defendant admits the execution and the delivery of the written instrument sued upon, and *31admits that the subscription contracts procured aggregated $60,000, admits that the corporation for whose benefit and use the subscription contracts were solicited, procured, executed and delivered was organized, and it acquired the building site and erected the contemplated building thereon, and the building thereon has been appropriated to the purposes of the Young Men’s Christian Association of Phoenix. Defendant admits: That he has not paid the sums mentioned in and by the terms of the contract he undertook to pay, and admits that demand for payment has been made, and that he has refused payment. Defendant in his answer has thereby confessed the cause of action, and seeks to avoid liability, for the reasons other conditions than expressed in the written contract were agieed to between himself and the person soliciting his contract, and such other conditions were falsely made for the purpose of inducing defendant to enter into the contract, and such conditions were not kept on the part of the plaintiff, nor were they, when máde, intended to be kept. That such conditions largely influenced the defendant to make and deliver the contract sued upon, because he believed such other conditions would be faithfully kept and performed as agreed; therefore defendant was induced to and did execute and deliver said contract.
Do the matters set forth in defendant’s answer constitute a defense? Are they sufficient to avoid the written undertaking? Can a party to a written contract defend upon the grounds that he was induced to execute the contract by reason of verbal conditions agreed upon, but not expressed in the instrument when executed and delivered by him?
The general rule is that: “If the execution of a contract to give a subscription is induced by a fraudulent representation of fact, it is not binding upon the subscriber; the fraud affords a defense. It is essential, however, that the fraud should relate to the subject matter of the contract.” 37 Cyc. 493.
Defendant’s undertaking was that he would pay the specified sum of money upon the performance by the other party of a single condition named in the contract, viz., provided that at least $60,000 be subscribed by others for the purpose mentioned. By the terms of the written instrument, the performance of that condition is made the sole consideration for his *32promise to pay the money. In his answer defendant does not complain that that condition has not been performed. That particular condition is the subject matter of the contract. The alleged false and fraudulent representations complained of in the answer relate to matters quite distinct from the condition expressed in their contract, made the subject matter of this action, with reference to which false and fraudulent representations and conditions the parties made no contract whatever.
“A false or fraudulent representation, to afford grounds of relief against a contract which the parties have entered into, must relate to the subject matter of that contract.” Blair v. Buttolph, 72 Iowa, 31, 33 N. W. 349, citing Noel v. Horton, 50 Iowa, 687.
It appears from the answer that defendant made some other agreements with the persons soliciting his subscription, by which agreements he undertook to promise to pay a like sum in consideration of the performance of certain conditions, and those conditions have not been performed. Under such circumstances the consideration for such contract and promise has failed, through the failure to perform the conditions agreed upon. That is not this case; defendant admits or does not deny that the condition expressed in the written contract as the consideration of his undertaking has been performed as agreed. Such is the contract here involved, and all other contracts, so far as this action is concerned, are wholly immaterial.
Another reason exists why the matters pleaded cannot be of avail to defendant as a defense to the action: By the terms of the written instrument the performance of the condition to procure the subscription of at least $60,000 from others, for the purpose of providing a building and site for the use and benefit of the Young Men’s Christian Association of Phoenix, was made the sole condition and consideration of defendant’s promise to pay the money. In his answer in question he alleges that he was induced in part to enter into the agreement by another promise or other representations entirely different and distinct from the condition appearing in the contract made and delivered, and that that promise or condition has been broken.
*33This presents the identical question considered by the court in Blair v. Buttolph, 72 Iowa, 31, 33 N. W. 349. In that case the court says: “ . . . Defendant alleges that part of the consideration of the contract in suit was the verbal promise and agreement of the corporation to which it was given that it would construct and complete its line of railroad from Iowa Palls to Forest City . . . within one year after the date fixed in the contract for the completion of the road to Iowa Palls; and that said company had not only failed to perform its undertaking in that respect, but had entirely abandoned the project of building the road between those points. We think it very clear that, under familiar and well-settled rules of law, the defendant cannot avail himself of the matters thus pleaded as a defense. His undertaking was that he would pay the specified sum of money upon the performance by the other party of a single condition named in the contract. By the terms of the written instrument, the performance of that condition is made the sole consideration for his promise to pay the money. In the paragraphs of the answer in question he alleges that he was induced in part to enter into the agreement by another promise, entirely different and distinct from that, and that that promise has been broken. But when the parties, by their writing, made the completion of the railroad to Iowa Palls within the specified time the condition upon which his liability to pay the money should accrue, they definitely fixed that as the condition of the contract, and the conclusive presumption is that all other conditions were excluded. When, by the express terms of the written agreement, a particular condition is made the consideration for the undertaking, it is no more competent to contradict or vary its terms by parol evidence, as to the consideration by which it is supported, than as to its other conditions. Gelpcke v. Blake, 19 Iowa, 263; Courtwright v. Strickler, 37 Iowa, 382.” Blair v. Buttolph, 72 Iowa, 31, 33 N. W. 349.
“It is the general rule that parol evidence is not admissible to show that a subscription was not to be payable except on other conditions than those embodied in the written contract.” 37 Cyc. 504, citing Blair v. Buttolph, supra; Farmington First Free-Will Baptist Parish v. Perham, 84 Me. 563, 24 Atl. 958; Gerner v. Church, 43 Neb. 690, 62 N. W. 51; Blodgett v. *34Morill, 20 Vt. 509. See, also, Thompkins v. Dinnie, 21 N. D. 309, 130 N. W. 935.
It' follows as a consequence that the court should properly have instructed the jury to return a verdict for plaintiff, as the defendant would have no right to recover under the pleadings and evidence produced. The rulings of the court, if erroneous as abstract propositions of law, could not prejudice the appellant, no issue of fact existed for trial, and the questions raised on the trial were at most questions the discussion of which could in no manner affect the rights of the parties.
We find no reversible error in the record, and the judgment must be affirmed.
FRANKLIN, C. J., and ROSS, J., concur.
NOTE.—As to the -validity and enforceability of subscriptions for charity, see note in 48 L. R. A. (N. S.) 783. .
On the validity of a subscription induced by false statements that certain other persons were to invest in the enterprise, see note in 29 L. R. A. (N. 6.) 477.