Hall v. Sims

HARALSON, J. — A condition to a subscription for stock in a public or private corporation, must be performed before a subscriber can be compelled to pay his subscription. Reasonable performance is all that is required. — 1 Cook on Stocks & Stockholders, § 86; 2 Beach on Private Corp., § 540. The complaint alleges performance of the conditions found in the note offered in evidence. ÍS¡jThe note reads as follows : “I promise to pay to the Alabama Midland Railway Company, as now chartered under the general railroad law of the State, or any amendments that may be hereafter made, either by general law or by act of the legislature, its order or assigns, five hundred dollars at the banking house of Farmers’' and Merchants’ Bank, Troy, Ala., to be paid in cash, on demand, at the maturity of the note, the amount being the total amount of my subscription to the capital stock of the Alabama Midland Railway Co. It is agreed, that the saidamoimt, to-ivit,five hundred dollars, mature and become due and payable whenever the Board of Directors of said Railway Company shall decide that the railroad has been finished to a point within one mile from the centre of the'city of Troy, Ala., from one or the other of its terminal points ; and that said road is of standard gauge, laid with steel rails, publication of said decision of said Board of Directors to be made in one of the daily papers of the city of Montgomery, Alabama, shall be final and conclusive notice to me of the same. It is hereby agreed and made part of the condition of this contract, that if the said Alabama Midland Railway Company-shall fail to complete the-wqrk necessary to make this__óbligatión ’ binding' by'October 1, 1890,, "* [565] then this instrument is null and void,” &c. The note bore date April 7th, 1887. An examination of this instrument shows, that it is an absolute promise to pay $500 on the completion of said road from one terminal point to the other, running within a mile from the centre of the city of Troy, if completed by the 1st day of October, 1890, of standard gauge laid with steel rails. These are the essential conditions imposed for the payment of said note. If completed by the 1st of October 1890, in the manner and on the conditions specified, it-became absolutely payable on that date; but if not completed by that date, if not of standard gague, laid in steel rails, or if not run within a mile of the centre of Troy, the note was to be null and void. But it is evident the parties understood, that the road might-be completed at an earlier date than the 1st of October, 1890 ; alnd that it was'their design to mature the note earlier than that date, if, and when, the road should be earlier completed. The fact appears, that it was completed earlier, and the declaration of the directors to that effect was made on the 3d of March, 1890. For that reason, the clause italicized — it is fair to assume — was inserted. The defendant, it may be presumed, was interested in having the road built. He was willing to subscribe $500 to its stock, in order to procure its building, and to pay that sum whenever it was completed according to contract, if done by a fixed period of time within which the company was given to accomplish the undertaking. It would not be a fair construction of that clause to hold it to mean, that the defendant was bound absolutely by the declaration of the directors, that the work was completed according to contract, without reference to the correctness of their declaration. It was the reasonable, bona fide completion of the work, according to the terms of the subscription, and not the declaration of the directors, that bound defendant to pay his note. If they had made a false declaration, defendant would not have been bound thereby to pay. The object of the declaration, as we have stated, evidently was, that the work having in fact been completed according to contract, the directors might give notice of the fact by publication, which notice'should be taken as “final and conclusive” to defendant of its completion, at which time he agreed to pay on demand. It is not provided that the note [566] should be void, if this declaration was not made within any limited time, nor was it provided that the declaration should be final and conclusive on defendant. It was the notice by publication of the completion of the road that was provided to be conclusive. The declaration might have been made, after October 1, 1890, — the time by which the road was completed, — provided it was in fact finished by that date, as well as at any time before, on the completion of the road. j^Now, the declaration of the directors, when made, on the 3d of March, 1890, omitted to state, “that the road has^beenpinished to |a point within one mile from the centre of the city of Troy, Ala./’ but it did declare, that said road “is now built and finished to a point within one mile of the city of Troy in Pike county, Ala.” Because of this omission, the déclaration as evidence was, on motion of defendant, excluded ; and the plaintiffs were not allowed to prove that the road was finished prior to the 6th of March, 1890, — the date of the published notice of that fact, — to a point within one mile from the centre of the city of Troy from its eastern terminal point; that'it was of standard gauge, and laid with steel rails. In this the court erred. It is entirely consistent with the declaration of the directors as made, that the road had in fact been built within one mile of the centre of the city of Troy. If built within a mile from the centre, it was necessarily within a mile of the city. though the converse of the proposition may not be true, viz., that if the road was within a mile of the city, it was not necessarily within a mile of its centre. The declaration of the directors does not negative the fact, that the road was within a mile of the centre of Troy ; and if it was a fact, it ought to have been allowed to be shown, — as was proposed to be done, — just as well as if the directors had made a false statement, as touching this matter, that fact might have been shown by the defendant. It was the truth of the fact declared, and not the mere declaration of it, that was important and controlling. We have confined ourselves to the single question which counsel have presented and argued in their briefs. Reversed and remanded. Brickell, C. J., not sitting.