Marysville Electric Light & Power Co. v. Johnson

De Haven, J. This is an action brought by the plaintiff against the defendant upon the following agreement, alleged to have been signed by him and others: “ For the purpose of forming a corporation to have for its object the furnishing of the incandescent system of electric lighting to those who may desire the same, and to provide the funds for the purchase of the necessary plant, we, the undersigned, hereby subscribe for stock to the amount set opposite to our respective names. Amounts to be due and payable upon the formation of the company and the issuance of the stock.”

The complaint alleges that the agreement was made and signed in contemplation of incorporating the plaintiff for the purpose of carrying on the business therein stated, and that thereafter it was duly incorporated under the laws of this state, by the defendant and the other persons signing said agreement. It is further alleged “ that said corporation, this plaintiff, succeeded to and acquired all the rights of said subscribers, and each of them, to the amounts so subscribed ” under the said agreement, and that plaintiff has issued its stock to the subscribers, and tendered to the defendant the amount of stock subscribed for by him, and that he has refused to pay for the same. It is also alleged that plaintiff “ duly made,” at different times, calls for fifteen, sixty, and twenty-five per cent of the amounts so subscribed by the defendant and others. The court below sustained a demurrer to the complaint, upon the ground that the facts therein stated are not sufficient to constitute a cause of action. This ruling of the court presents the only question to be considered by us at this time.

1. The agreement above set out is certainly valid; the corresponding promises of the other signers, and the common object sought to be accomplished by all the parties to it, constitute a sufficient consideration for the promise of defendant; and upon the formation of the plaintiff corporation by the persons signing the agreement, and plaintiff’s acceptance of the agreement, the defendant became bound to take and pay for the number [547]of shares subscribed for by him. (Athol Music Hall Co. v. Carey, 116 Mass. 471; Red Wing Hotel Co. v. Frederick, 26 Minn. 112; Hughes v. Antietam Mfg. Co., 34 Md. 316; International Fair and Exposition Ass’n v. Walker, 83 Mich. 386.) And it is not material to the right of the plaintiff to maintain this action that it is not expressly named in such agreement as the promisee. The agreement is to be construed according to the evident intention of the parties to it. It just as clearly appears that it was the intention of all the parties that the promise of each should inure to the benefit of the corporation when formed as if such intention were expressly declared; and therefore, in legal effect, the promise of defendant was to pay to the plaintiff corporation when organized. The corporation really represents the parties to the agreement; it was brought into existence by them as an agent to carry on the business named in the agreement, and through which they were to secure the benefits to arise from their mutual and corresponding promises.