Court Opinion

ID: 6631641
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:37:49.043343+00
Date Added: 2024-06-11T15:58:57.695376
License: Public Domain

. Ey the Court,
Martin, J.
The only defence interposed by Fisher to the plaintiffs’ recovery in this action, is based upon the fact, that in the subeription paper which contained his original promise, and in satisfaction of which the note in question was given, the plaintiffs, on their part, undertook, among other things, to convey to the suberibers of one hundred dollars, stock in the Institution to an equal amount.
*524This undertaking, the defendant contends, is impossible to be performed, and is not binding upon the plaintiffs ; and he also contends that it is illegal, and that, upon both of these grounds, this action may be successfully defended.
The plaintiffs were an incorporated body at the time this subscription was made, and from the facts found by the Court below it appears, amongst other things, that, upon the strength of this and other subscriptions, they erected buildings, established a Female Collegiate Institute, employed teachers, and otherwise expended money, and incurred great expenses according to their undertakings in and for the purposes designed by the parties to the subscription paper, and, for aught that appears to the contrary, fully fulfilled every obligation assumed therein, and that all or most of this was done after the subscription, and before the giving of the note in question. Under such circumstances, no impeachment of the consideration, short of illegality or fraud, could be permitted consistently with good faith and sound morality, in an action founded upon the subscription itself. Any other rule would work gross injustice upon the plaintiffs, who have incurred expenses and assumed obligations on the faith of it, which require its fulfillment. But, when the defendant has gone a step further, and has satisfied his subscription by superadding his note, and has received the certificate agreed to be given by the plaintiffs, as well as induced those expenditures, by a much stronger reason should we hold, that unless fraud or illegality tainted the original consideration, he is estopped from denying the obligation arising from his own deliberate recognition of the validity of his primary undertaking, and we should not hesitate thus to hold, were we without authority upon this point. But this' is not a new question. In Amherst Academy vs. Cowles (6 Pick., 427), which is, in many respects, strikingly analogous to the present case, this precise principle was established. It is to be observed, however, that in that case the note in express terms *525referred to the subscription, in addition to the words, “ value received” for the consideration; but we apprehend the reasoning of that case is equally applicable to this, in which the defendant asserts his subscription to be the consideration for his note. In pronouncing the judgment of the Court in that case, Parker, C. J., says : “Was there a consideration for this note ? In one sense there was not; that is, the promissor had received nothing at the time from the payees, -which was of any pecuniary value. But it. is quite sufficient to create a consideration that the other party, the payee, should have 'assumed an obligation in consequence of having received the note, which he was compellable either at law or in equity to perform, unless the promissor should be able to show, when sued, that the payee had refused, or was unable, or had unreasonably neglected to perform the engagement on his part, in which case a defence might be raised, on the ground of a failure of consideration. The defence is not put upon that ground, and so it must be presumed that the .corporate body to whom the promise is made, has applied its funds to the purposes for which they were raised, or is ready and willing to do it whenever the different contributors to it shall have performed their engagements. In a Court of Equity of general jurisdiction, they could be compelled to discharge their duty. * * *
“It certainly, then, would seem that every contributor to the funds of a Corporation authorized by law to receive moneys to apply them to improvement, in most essential points, of the community to which he belongs, had his recompense in his share of, the public good resulting from them ; and, if by means of his contribution, or his solemn promise to pay, the body to whom he has pledged his word should encounter expenses, become under legal obligations, or otherwise pursue the intent of the Legislature in granting them the charter, this a sufficient legal consideration for the promise. In this respect, the principle of common honesty cannot be at vari*526anee with the law of the land.” After a review of the various adjudications bearing upon the question, that Court concludes, that where there are proper parties to the contract, and the promisee is capable in law of carrying into effect the purpose for which the promise is made, and is, in fact, amenable to law for neglect or abuse of his trust, such a contract is a legal basis fora subsequent promise, and that the execution of or beginning to execute the trust for which the fund is raised, forms a sufficient consideration for such subsequent promise. See also Cong. Soc’y of Troy vs. Goddard, 7 N. H., 430.
It is not contended by the defendant in this case but that a portion of the consideration for the original subscription is good and valuable, but it is said the promise of stock is invalid. There is no rule of law better established than this: if an entire consideration for a promise be void, the promise is not binding; but, if the consideration be severable, and ' if one or more of several considerations, which are the ground of a promise, be only.frivolous and insufficient, but not illegal, and others are good and sufficient, then the consideration may be severed, and those which ■ are void disregarded, while those which are valid will sustain the promise. (See 1 Parsons on Gont., 379.) Now, in this case, if the consideration be severable, the valid considerations are abundant, aside from the promise of stock, to sustain the promise. The general object of the enterprise, which commends itself to the favorable regard of every good citizen ; the obligations assumed by the promisees; and, above all, the perpetual scholarship secured to the defendant, which, by reason of the amount subscribed, is made transferable (in this respect unlike the scholarship secured to the subscriber of a less sum), were adequate to sustain such original promise, and much more, after the expenditure of money, and other performance of their obligations by the plaintiffs, adequate to sustain this superadded one. But we do not regard this *527promise of stock as illegal, nor the certificate for it altogether valueless. The promise is not to do a thing prohibited by law, or malum in se, or prohibited in the plaintiffs’ charter. Now, the word stoelc, as employed in the subscription paper, and in the certificate issued to the defendant upon the execution of this note, was evidently employed in a special sense, to denote an interest or membership in the Corporation, entirely different from a moneyed interest, upon which the defendant might be liable to assessments, or entitled to dividends. It was not the intention of the plaintiffs, nor do we think it was the expectation of the defendant, that this Institution should issue stock, such as is understood by the ordinary use of the word, which could be the subject of purchase and sale in market, and entitle the purchaser to the benefits usually anticipated from the stock in moneyed and other like Corporations. The nature and objects of this Institution would forbid any other conclusion. A large amount of money was sought to be raised for the purposes of the Seminary. This money, except such as might be required for the erection of buildings, the payment of existing indebtedness, and the trifle which might be expended in procuring the fund, was to be funded, and the interest to be employed exclusively and wholly for the uses of the Institution. As an inducement to liberal subscriptions, the promise was given that the subscribers of one hundred dollara should acquire an assignable scholarship, as before suggested, and such an interest in the general fund as might enable him to insist upon its preservation; to secure its appropriation according to the original design (thus, to some extent, investing him with visitatorial powers), and as should entitle him to a return of his money in case of a diversion of the fund, or upon the dissolution of the Corporation. Thus, his one hundred dollars would not only secure to him a perpetual scholarship of much greater value than if not transferable, but would secure to him rights in, and give him a control *528over the Institution, which might well be an inducement for its donation.
Subscribing for these purposes, and with these expectations, the defendant afterwards deliberately reiterated his promise by the execution of the note in question, and received therefor the promised certificate of stock and scholarship, and has received, for aught that appears to the contrary, all that be expected or bargained for, so far as he has sought it. There is no pretence that any representations were made, or inducements held out to him, besides those contained in the subscription paper, which influenced him in making his subscription or in giving his note. We think, therefore, that every object sought by him has been attained or secured to him by the certificate he accepted, and that the consideration for the note is adequate.
Let it be certified to the Circuit Court for the County of Wayne, as the opinion of this Court, that the plaintiffs are entitled to recover.
Present, Martin, Green, Willson, Bacon, Douglass and Johnson, J. J.