Miller v. Hanover Junction & Susquehanna Railroad

Mr. Justice (Jordon delivered the opinion of the court, By the paper, which we have before us, it appears that the stock to which the defendant subscribed, was designed for a special purpose ; that is to say, for the “ building and equipping of the extension of the Hanover Junction & Susquehanna Railroad, according [98] to the survey made by the Philadelphia & Reading Railroad Company.” When, therefore, the defendant signed this paper, he was thoroughly informed of the intended route of the proposed road, and of the fact that his subscription, with the others made and to be made, was to be appropriated to the building of the branch designated, and to no other purpose. Again, the contract contained the further stipulation, that the money, thus subscribed, should be paid only when the subscriptions reached the sum of §100,000. It also appears, from the paper itself, that these subscriptions were made by the “ citizens of Marietta and its vicinity,” which means, as we take it, by persons who were interested, not so much in the stock as an article marketable and valuable, as in the proposed improvement as something that would promote their individual welfare. We have, then, some ninety-nine or one hundred persons, of the indicated vicinage, agreeing together, under certain conditions, proposed to them by the railroad company, to join in the promotion of a common enterprise intended, mediately if not immediately, for their mutual benefit, and, in effect, one says to another: for this purpose, here plainly set out in writing, I will give so much if you will give so much more, and so on until the requisite amount is made up. Under these circumstances, on the trial of this case, the defendant offered to prove that the subscription-book was brought to him by three persons, who, as it appears from his evidence, were officers of „ the company, and who induced him to subscribe by representing ; that the road should be built, not as stated in that book, but past - the defendant’s house and up the east side of the river, and, further, that he would not be obliged to pay until the road was so built. The court below overruled this offer; and what we have now to consider is whether this ruling was right or wrong. Were we to view the matter from the stand-point of the company’s interest’alone, we might pronounce against the conclusion adopted by the court. For that this company was in a position to make a binding conditional contract is conclusively settled by the case of this same company against Haldeman, 1 Norris 36. So, that a corporation must consent to abide by the contracts of its agents if it would profit by them, is in like manner ruled in Caley v. The Railroad Co., 30 P. F. Smith 363. So, it matters not whether the condition were in writing or parol, or if parol, that it contradicted the writing, if, but for such condition, the defendant would not have subscribed. So late as the case of Lippincott v. Whitman, 2 Norris 244, this court held (per Paxson, J.), that wherever equity would reform or set aside a written instrument, on the ground of fraud, accident or mistake, parol evidence is admissible to contradict or deny the terms thereof. Now, as this doctrine has been iterated and reiterated, in every variety of phrase, and in almost every volume of our reports [99] from 1 Binney to the present time, it may be taken as tolerably well settled. The reason of this rule is found in the desire of our courts to reach justice, however much the way thereto may be obstructed by mere technicalities. If one exhibits a written contract with his neighbor and it turns out, for any reason, that it does not contain the terms of the agreement, but rather the contrary, and if, through the interposition of some arbitrary rule, the truth of the matter cannot be shown, it is clear that injustice has been done, a result not tolerable in a well-arranged judicial system. But, while this is so, we must take heed that the rule is not used as a means of fraud or wrongdoing. If, however, we permit the defendant to make that use of this rule which he desires, the deprecated result must follow. Had he expressed in writing, on the subscription-book, the condition proposed to be proved, it would have been fair notice, to his fellow-subscribers, that his subscription amounted to nothing; was, in fact, a mere sham, since the condition, opposed, as it was, not only to the expressed action of the company but to the condition involved in every other subscription, could not possibly be enforced. Now, as we have already shown, this subscription was specially designed to carry out a common adventure, in which the company was but a means used for its accomplishment, and the interests of which were but secondary; hence it follows, that if Miller succeeded in avoiding his obligation, he does so at the expense of his co-subscribers and in fraud of thoir rights. Every one who signed after' him did so on the faith of his signature, as he did upon-the faith of the signatures of those who preceded him, and to permit him now to set up a secret parol arrangement, by which he may be released whilst his fellows continue to be bound, would be anything but just. As was said in the case of Graff v. The Railroad Co., 7 Casey 489 (per Woodward, J.), “a subscription to a joint stock is not only-an undertaking to the company, but with all other subscribers. Such contracts are trilateral, and even if fraudulent as between two of the parties, they are to be enforced for the benefit of the third.” This quotation expresses a principle applicable to the case in hand, and aptly illustrates the reason why the defendant should be estopped from setting up the secret parol agreement between himself and the agents of the company. Judgment affirmed.