Court Opinion

ID: 8851854
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:16:47.445777+00
Date Added: 2024-06-11T17:05:31.557607
License: Public Domain

THAYER, Circuit Judge,
after stating the case as above, delivered the opinion of the court.
The only question arising in this case that we have found it necessary to consider is whether the contract on which the suit was founded imposed a joint or a several liability, so far as the parties of the second part were concerned. If it is a several contract, — that is to say, if the various subscribers only bound themselves to pay for the erection of the butter and cheese factory in question the sums set opposite their respective names, — then the circuit court of the United States had no jurisdiction of the case, the amount in controversy being less than $2,000, and the action should have been dismissed for that reason. Tills contract, or one nearly identical with it in form, has been before the courts for construction on several previous occasions, and the question whether the subscribers thereby bound themselves jointly to pay-the full contract price, or severally to pay the sums by them respectively subscribed, has been considered at length, and often decided. In the following cases it was held that the contract simply required each subscriber to pay the amount of his individual, subscription: Davis *126v. Belford, 70 Mich. 120, 37 N. W. 919; Manufacturing Co. v. Barber, 51 Fed. 148; Gibbons v. Grinsel (Wis.) 48 N. W. 255; Davis & Rankin Co. v. Hillsboro Co. (Ind. App.) 37 N. E. 549; Manufacturing Co. v. Booth, Id. 818; Manufacturing Co. v. McKinney (Ind. App.) 38 N. E. 1093; Frost v. Williams (S. D.) 50 N. W. 964,—while in the following case the contrary view was taken, and the contract was held to impose a joint liability: Davis v. Shafer, 50 Fed. 764. It is worthy of notice, however, that in the case last cited (Davis v. Shafer) the conclusion reached, that the contract imposed a joint liability, was influenced to some extent by the view entertained by the court of the effect of a local statute of the state of Missouri, where the contract was executed. Rev. St. Mo. § 2384. We have felt constrained to concur in the views taken in those cases, above cited, which hold that the liability imposed by the contract is several, and not joint. Without repeating in detail the reasons that have been given to sustain this view, it is sufficient to say that, as the contract was made in a rural community, and the amount promised to be paid for constructing the plant was quite large, it is not probable that the several subscribers when they signed the paper; which was in the form of a subscription list, supposed that each was binding himself to pay the entire cost of the plant, to wit, the sum of $4,350, or the sum. of $4,950, if the subscriptions reached the later amount. The very form of tin* paper which was circulated for signatures was well calculated to create the impression that each person would only be held bound to pay the sum set opposite his name, and the clause inserted in the agreement, “that each stockholder shall be liable only for the amount subscribed by him,” was also well calculated to confirm that impression. We think it highly probable that each subscriber understood that the liability incurred by signing the agreement was limited to the amount of his individual subscription. Men of limited means do not usually bind themselves jointly with others to pay as large a sum as $4,500 without knowing who are to be bound with them; and yet, in view of the manner in which the signatures to this contract were obtained, these defendants were guilty of that folly, if we presume that each one of them, when he signed the subscription list, understood that he was thereby binding himself individually to pay the whole cost of the factory. It is a noteworthy fact, that, before the contract in suit was executed, two of the cases above cited, holding that it imposed a several liability, had been decided. Davis v. Belford and Manufacturing Co. v. Barber, supra. It had been decided, on the other hand, by the circuit court of the United States for the Western district of Missouri, that it imposed a joint liability. Davis v. Shafer, supra. These conflicting decisions were presumably well known to the plaintiff company, but were unknown to the defendants. Under these circumstances, it was the duty of the plaintiff to alter the form of its contract then in use so as to avoid the question whether it imposed a joint or a several liability which had theretofore given rise to conflicting decisions. Hot having done so, the plaintiff cannot complain if the courts adopt a construction of the contract *127which is most favorable to the defendants. The judgment of the circuit court, is reversed at the cost of the plaintiff in error, and the cause is remanded to the circuit court, with directions to dismiss the suit for want of jurisdiction, and at the plaintiff’s cost.