Ex parte South

• Decision Date: 11 November 1920
• Docket Number: 6 Div 100
• Parties: Ex parte SOUTH. v. FIRST NAT. BANK OF FAYETTE. SOUTH
• Court: Alabama Supreme Court

88 So. 221

205 Ala. 31

Ex parte SOUTH.

SOUTH v. FIRST NAT. BANK OF FAYETTE.

6 Div 100

Supreme Court of Alabama

November 11, 1920

Certiorari to Court of Appeals.

Petition of J.F. South for certiorari to Court of Appeals, to review and revise the judgment and decision of said court (88 So 219), rendered on his appeal in an action against him by the First National Bank of Fayette. Writ denied.

W.F Finch, of Jasper, for appellant.

Ray &amp Cooner, of Jasper, and McNeil & Monroe, of Fayette, for appellee.

SOMERVILLE J.

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 So. 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 So. 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 enterprises. 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.

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.C.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 community 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...