Court Opinion

ID: 6236942
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:34:46.789218+00
Date Added: 2024-06-11T08:58:04.690339
License: Public Domain

Mr Justice Teunkey
delivered the opinion of the court,
The Tradesmen’s Industrial Institute invited loans and advances from its members and others, upon terms that no subscription should be binding unless $50,000 were subscribed ; that all sums so advanced in the nature of loans should bo repaid as soon as possible out of the income of the association from all sources, and in addition to refunding the principal sums, the profits for three years should be paid to the persons making the advancements pro rata; and that the loan should consist of fifty shares of the par value of $1,000 each. More was subscribed than was asked. Coleman and some others loaned the amounts they subscribed, but some of -the parties, including Nellis, neglected or refused to make the loan.
The subscription was a mutual agreement to loan money to the corporation, and was so understood and acted upon by all parties. The instant the money was advanced it became a debt of the corporation. "Whether the borrower had the right to pay it, or the lender to demand repayment, immediately, is immaterial in this action. Nor is the question in any way raised, whether a subscriber, who refused to make the loan, became liable for damages to the corporation, or to his co-subscribers. The contract was dated July 16th 1875, and within a year thereafter the company resolved to give its notes to all its creditors, discriminating in favor of those who had paid cash on the guaranty fund by contracting for a higher rate of interest. No subscriber was bound to loan on these terms. As early as March 1876, and before the date of that resolution, Coleman brought suit for the amount he had .loaned, declaring on oath it was a loan, and in due course of procedure recovered judgment. The company failed. After that resolution, and after its failure, the company had not a semblance of right to demand of a subscriber that he advance the money. But aside from the resolution and failure, if by the terms of the subscription it was implied that the loan should be for three years, that time had ended before this suit against Nellis. Under the uncontroverted facts the company could recover nothing on the contract for a loan. Its creditor, by attachment in execution, has no better right.
It is urged that in equity the plaintiff ought to recover against the garnishee. This is not apparent.. There ■ was no *470agreement betweeu the subscribers to pay, or to guarantee the payment of each other’s loans. Coleman did not promise to pay Nellis whatever sum he should loan to the company, nor did Nellis make such promise to Coleman. If this judgment stands Nellis will be compelled to pay another’s debt, although he in no wise became surety for it. Had Nellis made the loan he could have recovered judgment in like manner as Coleman did, and would have as good right to demand payment of Coleman, as Coleman has of him. Conceding the validity of the contract betweeu the corporation and Nellis, specific performaiice would not be decreed in equity, and at law the corporation could recover at most only nominal damages. Where two men agree' that each will loan a third a sum of money, aud one keeps and the other breaks his promise, no legal principle will enable the lender to compel the other promisor, as garnishee in an execution attachment, to pay what he had promised to loan to said third person.
The construction of the contract was for the court, and it was error to submit to the jury to determine whether the amount subscribed was a debt owing to the corporation, or a loan to be made. The learned judge rightly ruled that if it was a loau Nellis did not owe any thing on the contract.
The assignments of error relating to the admission of the subscription paper in evidence cannot be sustained. It is now too late to object that the handwriting oí tbe several subscribers was not proved. At tbe trial tbe objection was, “ incompetent aud irrelevant,” and that was rightly overruled.
Judgment reversed, and venire facias de novo awarded.