South v. First Nat. Bank , 205 Ala. 31 ( 1920 )

SOMERVILLE, J.

[1-4] Although the complaint refers to the instrument sued on as a promissory note, and the instrument itself refers to the money agreed to be paid as a donation, it is clear from its terms that it is simply a subscription to procure the construction of a designated public road — a “state highway road leading from Fayette to Bluff to Guin, Ala.” Being payable conditionally upon the completion of such a highway, it is not technically a promissory note (Louisville Banking Co. v. Gray, 123 Ala. 254, 26 South. 205, 82 Am. St. Rep. 120); and, while there may have been a technical variance between the allegations and proof in that regard as to count 1 and count B (Cairus v. Daniel, 16 Ala. App. 218, 77 South. 56), .there was no prejudicial'error in the trial judge’s refusal to give the affirmative charge for defendant on those counts, since count A set out the instrument in totidem verbis, and the question of variance as to «other counts could have had no bearing upon the result of the trial, which was had upon this obligation only.

“Subscription contracts are favored in law as calculated to foster public and quasi public entez-prises. As a matter of public policy the courts are desirous that subscribers should not evade their deliberate promises of contribution, and their tendency therefore is to adopt such a rule as will sustain the subscriptions - as a legal obligation.” 25 R. C. L. 1398, 1399, § 4, citing Merchants’, etc., Co. v. Chicago, etc., Co., 210 Ill. 26, 71 N. E. 22, 102 Am. St. Rep. 145; Illiopolis M. E. Church v. Garvey, 53 Ill. 401, 5 Am. Rep. 51; Brokaw v. McElroy, 162 Iowa, 288, 143 N. W. 1087, 50 L. R. A. (N. S.) 835; note, 48 L. R. A. (N. S.) 784.

[5] A consideration is of course necessary to make a subscription a binding obligation. But it need not exist at the time of its making, and may be supplied by the subsequent .conduct of the payee or beneficiary.

“In other words, the mutuality of the promise is tested by the situation existing at the time it is sought to enforce the subscription, not by that existing at the time of the signing of the instrument.” 25 R. C. L. 1401, 1402, § 8; Owenby v. Ga. Baptist Assembly, 137 Ga. 698, 74 S. E. 56, Ann. Cas. 1913B, 238.

And, “when the party or institution for whose benefit a subscription is made acts thereon and incurs legal liabilities and expense on the faith thereof, the promise ripens into an enforceable contract.” 25 R. G. L. 1402, citing a long list of authorities.

From the face of the instrument evidencing this subscription, and the circumstances of its making, it is clear that the plaintiff bank was made the agent of the comm\unity for the reception and disbursement of the funds contributed; and, the funds being required for use before the maturity of the numerous subscription notes, it is equally clear that the bank was authorized and expected to furnish the funds in advance of their payment by subscribers for the reimbursement of the bank.

It is without dispute that the bank did thus advance for the construction of this highway the amount promised by this defendant. Thereby what was before but a nudum pactum became a binding, enforceable obligation, subject of course to the condition expressed upon its face; none the less so by reason of the fact that the payee bank took the precaution of taking notes from a selected few, of known responsibility, as a guaranty of the final payment promised by original subscribers. .

[6] Some of the cases treat the obligation of the subscriber from the standpoint of estoppiel (see 37 Gyc. 492); but whether that theory is or is not correct, the action being upon the primary obligation, and the pleas setting up a want of consideration, a replication by the plaintiff is not necessary to let in proof that the consideration has been supplied by the subsequent action of the payee in advancing the amount of the subscription. So there is no question as to the pleading ,of an estoppel, as insisted upon by petitioner, since the act which estops, viz. the promise to pay, has already been declared upon in the complaint.

[7-10] It was clearly proper for the payee bank to show that Roberts, who induced defendant to execute the' subscription agreement, was not the agent of the bank; for, if not, no parol understanding between defendant and Roberts could be fastened upon the bank, in derogation of the promise or in enlargement of the condition. And, moreover, “in accordance with the general rules of evidence, when a subscription agreement is in writing, parol evidence is not admissible to contradict the writing or to add conditions thereto which are not expressed.” 25 R. O. L. 1407, § 13. The rule which admits parol evidence to show the real consideration for a written contract does not allow the use of such evidence to ingraft new and different conditions upon the promise. The promise to pay if there was a completion of the ro.ad as a “state highway” must be taken at its face value; that is, the payee bank was assured of reimbursement if a road was constructed between the designated points answering to that description in general terms, as the phrase “state highway” was then commonly used and applied. Parol specifications as to what kind of a state highway was in the mind and purpose of defendant when he signed the instrument cannot be shown. This view of the law justifies the rulings of the trial court in sustaining demurrers to the special pleas, and in excluding testimony, and refusing charges, relating to such specifications.

[11] The testimony of defendant that he was not benefited by the highway in question was but a legal conclusion. If, that were a material issue — which it was not, in view of other conclusive evidence of a valid consideration — he should have stated the facts and left the conclusion to be drawn by the jury.

[12,13] It is always competent for a party to show that an opposing witness, whoso testimony is adverse to him, has an interest in the result in line with such testimony. Hence defendant could properly show on the cross-examination of plaintiff’s witness Roberts that the witness was contingently liable for the payment of the tunount of defendant’s note if it was not collected out of defendant. What defendant offered to show was that the witness had agreed to pay the bank $5,000 “whether these notes were paid or not.” This did'not show any interest in the result of the suit, and could not support the inference of bias. Moreover, the two notes covering that obligation, signed by the witness and a number of others, were introduced in evidence later on, and the witness’ relation thereto was fully understood by the jury.

Upon a very careful survey of the record we cannot see that any error has been committed by the Court of Appeals, and the writ of certiorari will be denied.

Writ denied.

ANDERSON, O. X, and McCLELLAN and THOMAS, JX, concur.