Russell v. South Britain Society

Bissell, J.

No question has been raised upon either of the special pleas filed in this case : of course, they may be laid out of consideration.

The principal question, which has been made and discussed, is, whether upon a sound construction of the articles of subscription, in connection with the facts admitted and found in the case, an action of law can be sustained ?

It is admitted, that a large portion of the fund, originally subscribed, was lost, by the failure of the Eagle Bank; and that the loss has never been made good, by the society.

It has not been found,, nor has it been contended, that this *526]oss js to be attributed to any fault, or want of prudence, on the part of the society. On the contrary, it is admitted, that the ]oss fiappened through the unexpected failure of an institution, in the stability of which, the public, generally, reposed the highest confidence.

On these facts, it is contended, that this action will not lie, In determining this question, we are brought to consider the articles of subscription : and in putting a construction upon this instrument, we are not at liberty to enquire whether it was expedient for the society£ to accept a subscription, guarded in the manner this is; or whether in accepting it, they have made a provident, or improvident contract. They have accepted it, and in so doing, have obligated themselves to comply with all its requirements. What, then, is the contract, and what are the obligations which it imposes on these defendants ? In ascertaining this, we are to regard the intention of the parties, as that intention is expressed upon the face of the instrument.

It is impossible to look over this subscription, and not to perceive, that it was a leading object with the subscribers, to secure the perpetuity of the fund : and not only so, but to preserve it entire : to make it the interest, as well as the duty of the society, in case of a loss, “ in any manner whatever” to supply the loss, and to restore the fund to its original state, within the period limited.

Accordingly, the first article provides, that the principal of the fund shall be forever kept on interest, with good and sufficient security, by the society, “ at its own charge and risk." The intention of the donors is here made manifest; and llie obligations of the society are hardly less so.

But if there could exist a doubt, with regard to the import of the terms here used, that doubt would seem to be entirely removed, by a consideration of the fourth article. It would seem that the language of that article is so plain and explicit as to preclude all doubt, and all question of construction. It, indeed, hardly admits of construction.

But it has been contended, that the general expression, that “ in case any part of the fund shall be lost, wasted or diminished, in any manner whatever,” is to be taken in connection with, and qualified by, the preceding part of the sentence, which makes the society accountable to the subscribers (or the prudent management of the fund; and that taking the *527whole tosrether.it binds the society to the use of ordinary dil- , , . only ; and that the forfeiture does not attach, in case of a loss through negligence. This construction I do not feel at liberty to adopt. It is, indeed, not construing, but doing violence to the contract. Instead of giving effect to every part of it, it is, literally, tearing away a part. True it is, the society are made accountable to the subscribers for the prudent management of the fund. But how accountable?— The succeeding article shows. They were to cause the in-strurnent, and vote of the society accepting the subscription, to be recorded in the records of the society ; they were, annually, to make a full and correct statement of the situation of the whole fund ; of the interest that had accrued ; how much had been collected; and how the same had been applied. This statement was to be recorded ; — was to be accessible to every subscriber; and copies of it were to be furnished them, when required. They had given their money to secure an object, which they deemed important. They were members of the society, and as such, in common with the other members, had an interest in this fund. It was not extraordinary, then, that they should have claimed a kind of visitatorial power in regard to it; that they should have insisted upon the right of seeing that it was so managed, as best to secure the objects which they had in view.

But they meant not only to secure the prudent management of the fund; they intended also to guard against the loss of any part of it. They intended to make the society insurers against a loss, in any event; and they have done so, by providing, that, in case any part of the fund shall be lost, wasted or diminished, in any manner whatever, and not replaced within a year, the entire sum subscribed shall be forfeited.

These two clauses, then, are not inconsistent. The one is not dependent upon, or qualified by, the other. The one is intended to guard against mismanagement, the other against a loss. Effect may be given to each. But upon tin; construction contended for, the emphatic words “ in any manner whatever,” must be expunged from the contract. I see not, bv what authority, that may be done.

Besides, it should be remarked, that a loss (if not replaced) of any part of the principal, and the misapplication of the interest, are both placed on the same ground ; and the one, as well as the other, induces a forfeiture of the entire sum ori*528ginally subscribed. Now, it can hardly be contended, that should this fund be diverted from its proper objects, and the interest applied to others, not contemplated, the donors would not have a right to demand and recover their original subscriptions.

This view of the case goes very far to dispose of the remaining objection, growing out of the contract.

It is contended, that, by the terms of the instrument, nothing more is forfeited than the fund, in its actual condition ; which is to be distributed pro rata, among the subscribers ; that in order to this, an account must be taken, which can be done only in chancery; and that, therefore, the present action cannot be sustained. This objection is grounded upon that clause in the fourth article, which provides, that in case of a forfeiture, each and every subscriber may sue for, and recover his share, according to the sum originally subscribed.

It should be recollected, that in case any part of the interest shall be applied to any objects other than those specified in the articles, then not only the sum originally subscribed is to be forfeited, but also a sum, which shall be equal to the interest misapplied; and then follows the clause on which the objection is founded. Now, the word “ share,” as here used, obviously applies, not only to the sum originally subscribed, but also to the sum which may be forfeited, by a misapplication of the interest. And however the case might be, were such misapplication the breach complained of; there clearly is, in this case, no foundation whatever for the objection.--The plaintiff claims to recover, on the ground that a part of the fund has been lost. And here the contract is explicit, that: the forfeiture shall be of the sum originally subscribed. Therej is no account to be taken ; no necessity for resorting to a court of chancery. The plaintiff’s claim is merely for damages, resulting from a breach of contract ⅜ and those damages liquidated, by the contract itself. The remedy at law is not only adequate, but it is the appropriate remedy.

A question has been made, whether Johnson Wheeler's subscription has been lost, by the negligence of the society : and that question depends upon the legal effect of an order of tb court of probate for the district of Woodbury. On that poit 1 it is not my purpose to express any opinion ; it being rende ’ ed unnecessary, by the view which I have taken of the ca

*529Bat it has been further insisted, that although there has been a breach of the contract, and a consequent forfeiture of the fund, yet there has been a waiver of the breach, on the part of the plaintiff; and therefore, he cannot recover.

To this, it may be sufficient to answer, that there is no fact found in the case, which affords the slightest foundation for the objection. No act has been done, or acquiesced in, from which a waiver can be presumed. The plaintiff has, merely, forbore to sue, for nearly six years after his right of action had accrued ; and if this be in law a waiver, the statute of limitations would seem to be useless.

Again; it has been urged, the action, in its present form, cannot be maintained, inasmuch as the contract, which is to be deduced from the articles of subscription, and the acceptance of them by the society, is not correctly declared on, in either of the special counts.

I am satisfied, that this objection must prevail.

On the subject of variance, the rule is too well settled to admit of a doubt, or demand illustration. It is sufficient to observe, that in an action on a contract, the contract given in evidence, must agree, in substance and in terms, with that stated in the declaration; and that the entire consideration must be clearly and correctly stated. Curley v, Dean, 4 Conn. Rep. 239.

It has hardly been contended, that the contract offered in evidence corresponds with that stated in the second count, in either of these particulars.

In the first place, the import of the plaintiff’s subscription is entirely mistaken. It is averred to be, that he promised, thereby, to pay to the treasurer of the society, the sum of one hundred dollars, in thirty days after notice of the society’s accepting said fund. The proof is, of a promise in the alternative ; that is, either to pay that sum in thirty days, or to give a note payable in three years, with the annual interest.

Again; the consideration for the defendants’ undertaking is not correctly stated. It is alleged to be the delivering up of the fund and subscription paper into the hands and con-roul of the society.

This may have formed a part; but it surely does not con-jjtute the whole consideration of the defendants’ promise.— nd in stating the promise? itself, the pleader has hardly been *530more fortunate. But it is unnecessasy to pursue the objec-tionSj as this count was virtually abandoned, in the argument.

The same objections apply to the third count. The pleader has, indeed, here set forth the contract. But, this does not relieve the difficulty; as the contract set forth, does not sustain the previous averments. Willoughby v. Raymond, 4 Conn. Rep. 130.

But the count is liable to this further objection. It professes to set forth, not only the articles of subscription, but the names of the subscribers. And in regard to them, it is averred, that they were all original subscribers. The proof is, that five of them, viz. Truman Pearce, Bethuel Ward, Wait Downs, Obadiah Hawley and Burton Canfield were not original subscribers; but that they became subscribers after the subscription had been accepted, and under a vote of the society to enlarge the fund. The variance is fatal.

It has, however, been contended, that the action may be sustained, on the general count for money had and received. I think otherwise. There is no pretence that the contract, which is the foundation of this action, has been rescinded, by the defendants. It is an open, still-subsisting contract. And I suppose the rule to be well settled, that where there is a special contract, which is still open and in force, the action must be special; and that no recovery can be had on the common counts. Hull v. Heightman, 2 East 145. Weston v. Downes, Doug. 23. Tuttle v. Mayo, 7 Johns. Rep. 123.

The advice to be given to the superior court, in my opinion, ⅛, that an action at law well lies ; but that the evidence does not support either of the special counts, and that no recovery can be haá on the first count.

The other Judges were of the same opinion.

Judgment for defendants.