Blodgett v. Morrill

The opinion of the court was delivered by Redheld, J. This is an action upon a subscription to build a meeting house. The subscribers seem to have been merely an association, and not a corporation, organized under the statute. There seems to have been a corporation, probably, or an association, existing before this time in the town of Randolph, under the name of the Congregational Society in Randolph. This subscription, however, seems to have been made wholly independent of the society, and not in any sense under the control of the society, except that the house, when rebuilt, or repaired, was to be under the control of that society. [514] 1. The subscribers were to determine, whether a new house should be built, or the old one repaired, and in what manner ; and were also to appoint a committee to superintend the expenditure of the money. The votes were to be upon shares of $25 each. The subscribers were to receive back, inproportion to their subscriptions, whatever the pews should sell for, to the full amount of their subscriptions. We think, then, the fact, that the subscriptions were made payable to the plaintiff, who was described as treasurer of the society, is not to be understood as a promise to the society, but to the plaintiff, as a trustee for the subscribers, — it being necessary to name some one for that purpose, as a mere partnership cannot collect of each other, at law, where the same person would be both plaintiff and defendant. This, in principle, seems to be precisely the case of Smith v. Burton, 3 Vt. 233. We think, then, the action is well brought in the name of the plaintiff. 2. The testimony offered in defence of the action, that the defendant was induced to sign the subscription only upon the assurance of the agent, “that he wanted his signature to influence others to sign,” and that “ he should never be called upon to pay,” is insisted upon in two views. 1. As showing, that the defendant never expected to pay the sum subscribed, and that the defendant was only induced to sign the paper, upon the assurance, that he should not be required to pay. In this view it is directly contradictory to the written stipulation, and could no more be received, than parol evidence of a promise not to collect a promissory note, or to accept a less sum, or payment in some different mode from that specified in the contract. It is a proposition so plain, as to require no illustration, in this view. 2. It is urged, that this contract contemplated a fraud upon the other subscribers, and so cannot be enforced. Contracts of that character are sometimes enforced, and sometimes not; but they are never set aside, either in law, or equity, on account of the party, who was himself consenting to the fraud. He is not deceived. Courts generally so determine suits upon such contracts, as to defeat the contemplated fraud, — whether that can best be done by allowing or denying the remedy. Such contracts are always void, as to those persons whose rights are attempted to be affected by the fraud. Here the alleged fraud consisted in the agreement not to enforce the subscription. This portion of the contract was in [515] bad faith, it is said. Perhaps it is so. But if so, the defendant is equally in fault with the agent; the rest of the association knew nothing of any such secret agreement. The defendant knew the subsequent signers were to be decoyed by his name. Clearly, then, he ought to be held to his contract. And the only sure mode of defeating the contemplated fraud is to compel the defendant to do, as he gave the other members of the association to believe he intended to do; that is, to make him keep his promise to the sense, as he made it to the sound. We think, indeed, that it is very doubtful, whether this device of having nominal subscriptions, even if the agent had given a writing to that effect, is any such fraud as would release the subsequent sbscribers; each subscription being in its nature an independent contract; and one having no legal right to depend upon another. We do not say such a fraud would not release those attempted to be misled by it. But.clearly the defendant was not deceived, but attempted to deceive others. This subject may be illustrated by the case of secret contracts between the creditor and the principal, but kept secret from the surety, or guarantor; — such secret contract will release the surety, but still leaves the principal bound, the same as before. So, too, if A. agree to give B. a certain sum for goods, in advancement of C., any secret agreement between B. and C., that the latter shall pay a farther sum, is void, as a fraud upon A., and B. cannot recover such farther sum. The secret agreement, which is a fraud upon third persons, is held void, and the main contract enforced ; so here, we do the same. Jackson v. Duchaire, 3 T. R. 551. The same rule is applied to secret agreements, by which a debtor, in compounding with his creditors, is induced to give a secret contract to pay some more than others. The secret contract is held void ; but that does not affect the main contract. In mercy, then, to the defendant, to prevent his accomplishing a contemplated fraud, we think he should be compelled to pay this subscription, so far as this part of the de-fence is concerned. 3. The third ground of defence, that the agent made a similar agreement with Dr. Pember, which was a fraud upon the defendant, is nearly answered by what has been already said. 1. If such contract were no defence for Dr ..Pember,'the defendant clearly could [516] not complain, unless the agent actually did release the subscription, —which is not pretended. 2. The secret agreement was one, which could not be enforced, either in law, or equity; and so Dr. Pember regarded it, and actually paid his subscription when required. 3. But if it were actually a binding contract, and had been acted upon, and the subscription discharged, it would not, in my mind, be such a fraud, as would release the defendant. The essence of the fraud consists in representing, expressly, or impliedly, that the subscriptions are all real. Now no such representation is claimed as expressly made, and none certainly is implied from the conversation had with the defendant, — but the contrary. If the defendant were told, that his own subscription was a mere sham, to impose upon others, what right had he to expect, that it was not so with any one or all of the others, which went before ? He might, perhaps, suppose that some were genuine. But why should he be the only decoy used to bait others. He was at least put upon inquiry, and might have asked, if the other subscriptions were all genuine. But the case is decided mainly upon the other ground, that Pember’s subscription was genuine and binding in law. The Middlebury College cases are totally different. In those cases there was a certain sum to be raised,' and then all ’over that sum was to go to reduce the subscriptions made, — so that each subscriber had an interest in all the others. The persons sued, in those cases, were not the decoys, but the persons decoyed, — not the deceivers, but the deceived. The subscriptions, in those cases, were actually discharged by writing; so that no question arose as to controlling a writing by oral testimony. Judgment reversed and case remanded.