S. B. Strong, J,
These actions were instituted upon certain agreements, subscribed by the defendants severally, where? by they promised to take, and pay for, the number of shares set opposite to their names respectively, in the plaintiffs’ compa? ny, at such times and places as the directors might order. The agreements were signed before the organization of the company. After such organization the directors called upon the defendants to take the stock, and to pay for it by installments at certain times, which they refused to do. The judge who tried the causes gave judgment for the plaintiff in the first above entitled suit, and for the defendants in the other two.
The principal distinction between the first and the other two [465]*465suits, and what led to the different conclusions, was that in the agreement signed by Griffin there was an express authorization to extend the contemplated plank road to “ Clinton Corners ;” while that signed by Allen and Clapp did not confer the same privilege, (as it is called,) in express terms. As, however, the latter was dated on the 16th of March, 1853, and recited that the association was to be formed in pursuance of public notice, and as a notice explicitly stating that the road was to be constructed to run from Poughkeepsie to Salt Point, with the privilege of extending it to Clinton Corners, had been published on the 5th of the same month, it seems to me that in effect there was no substantial difference between the two. What was stated in the notice may be considered as substantially incorporated in the agreement referring to it. Possibly the defendants, when they subscribed the agreement, had not seen the notice; but if a party subscribing any paper neglects to inform himself of its provisions, or those to which there is a direct reference, he is nevertheless (in the absence of fraud) - bound by them.
Another position upon which the defendant Griffin relies, and which is inapplicable to the other defendants, is that it was represented to him, when he signed the agreemént, that the proposed road would be constructed on a different route from that which was eventually adopted, and that he agreed to take the stock expressly upon the condition that the designated line should be pursued. The witness who procured his subscription testified that Griffin did not say that if the road did not take the east route he would have nothing to do with it. His two brothers, who were present at the time, testified that he did say that he would not subscribe if the road was to take the west route, (which was eventually adopted,) or words to that effect. The difference in the recollection of these witnesses shows the expediency of the rule that parties who execute any instrument should be confined to its terms, as indicative of their intentions, and not be permitted to resort to simultaneous declarations, or (except in cases of reference) extraneous ’evidence. The counsel for Griffin supposes that the evidence was admis[466]*466sible to prove fraud. But it did not go far enough to establish that charge. Declarations indicating a fraudulent design must refer to the past or the present. Possibly the assertion of an intent which does not exist, or which is contrary to one that does, might (if it could be proved) be deemed an indication of fraud; but there is nothing in this case to lead to the inference that there was any intentional misrepresentation. If there had been an assurance, at the time, that a particular route would be adopted, and that was not incorporated in the agreement, the compact as it reads would not be rendered inoperative by a subsequent change. Besides, as the judge has not found that any representation was made at the time, it may be that he reposed more confidence in the testimony of the plaintiffs’ witness, as to the declarations, than in the recollection of the two brothers of the defendant.
It seems to me that the only important question, in all these cases, is whether as the agreements were executed before the organization of the plaintiffs’ company, and the defendants never signed the articles of association, such agreements were operative and binding. The act providing for the incorporation of plank road companies (Laws of 1847, p. 216, § 1) expressly requires a subscription to the extent of five hundred dollars for each mile, in good faith, and a payment of five per cent upon the amount as preliminaries to the election of the directors and the adoption of the articles of association, and the subsequent proceedings in order to perfect the incorporation. By making the primary subscription a basis for future operations it was certainly designed to make it obligatory to some extent; otherwise it would be illusory—worse than an idle ceremony. It could not, it is true, become at once a perfect contract, for the want of the necessary parties. But it is a proposition for a contract in transition, until accepted by the party to whom it is tendered. It is to some extent like a proposal for a contract in a letter, which becomes consummate and obligatory when accepted, and in effect dates from that time. In such cases the competency of the profferee has reference to the time of acceptance. It is enough if he has then the appropriate and necessary qual[467]*467ification. In this case the proposal was made with a view that it should become an effective contract when the company should be organized. Its acceptance then might be presumed from, its beneficial nature; and, if not from that alone, from its having been the necessary preliminary to subsequent official action. The case of Stanton v. Wilson, (2 Hill, 153,) is a strong accordant authority. There the defendant subscribed tó the stock of a proposed bank, on the 18th of October, 1838. The association became perfected on the first of January, 1839. The court held that the defendant was bound by his subscription. Judge Cowen said, “It is true the company did not come into existence as a corporation till several months after the defendant’s subscription purports to have been made, and the power of the president to sue did not arise till that time. The contract, though dated before, must be considered as taking effect only from the 1st of January. In legal effect, then, the contract of the defendant was made on the 1st of January, and was then to pay the corporation the amount subscribed, in such installments as the subscription provided for.” This decision is mentioned with approbation, and the same rule is laid down in The Hamilton and Deansville Pl. R. Co. v. Rice, (7 Barb. 157.) In that case the defendant had subscribed for the stock at the opening of the books, but had not signed the articles of association. It was nevertheless held that he was liable. The court say, “ we think, too, that the fact that the corporation was not in esse when the agreement was signed is not of itself a sound objection to the right of maintaining an action upon it.” The case of the Trustees of Farmington Academy v. Allen, (14 Mass. Rep. 172,) is to the same effect. The decision in The Troy and Boston R. R. Co. v. Tibbits, (18 Barb. 297,) is the other way, upon the facts, although not upon the principle there enunciated. In that case the court say, (p. 305,) “ that the preliminary” (subscription) “ paper on which this action is sought to be sustained was not an essential and indispensable part of the machinery devised by the legislature for bringing the corporation into legal existence, nor does its vitality depend in any measure upon it.” I doubt that, even in the case then [468]
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S. B. Strong, J,
These actions were instituted upon certain agreements, subscribed by the defendants severally, where? by they promised to take, and pay for, the number of shares set opposite to their names respectively, in the plaintiffs’ compa? ny, at such times and places as the directors might order. The agreements were signed before the organization of the company. After such organization the directors called upon the defendants to take the stock, and to pay for it by installments at certain times, which they refused to do. The judge who tried the causes gave judgment for the plaintiff in the first above entitled suit, and for the defendants in the other two.
The principal distinction between the first and the other two [465]*465suits, and what led to the different conclusions, was that in the agreement signed by Griffin there was an express authorization to extend the contemplated plank road to “ Clinton Corners ;” while that signed by Allen and Clapp did not confer the same privilege, (as it is called,) in express terms. As, however, the latter was dated on the 16th of March, 1853, and recited that the association was to be formed in pursuance of public notice, and as a notice explicitly stating that the road was to be constructed to run from Poughkeepsie to Salt Point, with the privilege of extending it to Clinton Corners, had been published on the 5th of the same month, it seems to me that in effect there was no substantial difference between the two. What was stated in the notice may be considered as substantially incorporated in the agreement referring to it. Possibly the defendants, when they subscribed the agreement, had not seen the notice; but if a party subscribing any paper neglects to inform himself of its provisions, or those to which there is a direct reference, he is nevertheless (in the absence of fraud) - bound by them.
Another position upon which the defendant Griffin relies, and which is inapplicable to the other defendants, is that it was represented to him, when he signed the agreemént, that the proposed road would be constructed on a different route from that which was eventually adopted, and that he agreed to take the stock expressly upon the condition that the designated line should be pursued. The witness who procured his subscription testified that Griffin did not say that if the road did not take the east route he would have nothing to do with it. His two brothers, who were present at the time, testified that he did say that he would not subscribe if the road was to take the west route, (which was eventually adopted,) or words to that effect. The difference in the recollection of these witnesses shows the expediency of the rule that parties who execute any instrument should be confined to its terms, as indicative of their intentions, and not be permitted to resort to simultaneous declarations, or (except in cases of reference) extraneous ’evidence. The counsel for Griffin supposes that the evidence was admis[466]*466sible to prove fraud. But it did not go far enough to establish that charge. Declarations indicating a fraudulent design must refer to the past or the present. Possibly the assertion of an intent which does not exist, or which is contrary to one that does, might (if it could be proved) be deemed an indication of fraud; but there is nothing in this case to lead to the inference that there was any intentional misrepresentation. If there had been an assurance, at the time, that a particular route would be adopted, and that was not incorporated in the agreement, the compact as it reads would not be rendered inoperative by a subsequent change. Besides, as the judge has not found that any representation was made at the time, it may be that he reposed more confidence in the testimony of the plaintiffs’ witness, as to the declarations, than in the recollection of the two brothers of the defendant.
It seems to me that the only important question, in all these cases, is whether as the agreements were executed before the organization of the plaintiffs’ company, and the defendants never signed the articles of association, such agreements were operative and binding. The act providing for the incorporation of plank road companies (Laws of 1847, p. 216, § 1) expressly requires a subscription to the extent of five hundred dollars for each mile, in good faith, and a payment of five per cent upon the amount as preliminaries to the election of the directors and the adoption of the articles of association, and the subsequent proceedings in order to perfect the incorporation. By making the primary subscription a basis for future operations it was certainly designed to make it obligatory to some extent; otherwise it would be illusory—worse than an idle ceremony. It could not, it is true, become at once a perfect contract, for the want of the necessary parties. But it is a proposition for a contract in transition, until accepted by the party to whom it is tendered. It is to some extent like a proposal for a contract in a letter, which becomes consummate and obligatory when accepted, and in effect dates from that time. In such cases the competency of the profferee has reference to the time of acceptance. It is enough if he has then the appropriate and necessary qual[467]*467ification. In this case the proposal was made with a view that it should become an effective contract when the company should be organized. Its acceptance then might be presumed from, its beneficial nature; and, if not from that alone, from its having been the necessary preliminary to subsequent official action. The case of Stanton v. Wilson, (2 Hill, 153,) is a strong accordant authority. There the defendant subscribed tó the stock of a proposed bank, on the 18th of October, 1838. The association became perfected on the first of January, 1839. The court held that the defendant was bound by his subscription. Judge Cowen said, “It is true the company did not come into existence as a corporation till several months after the defendant’s subscription purports to have been made, and the power of the president to sue did not arise till that time. The contract, though dated before, must be considered as taking effect only from the 1st of January. In legal effect, then, the contract of the defendant was made on the 1st of January, and was then to pay the corporation the amount subscribed, in such installments as the subscription provided for.” This decision is mentioned with approbation, and the same rule is laid down in The Hamilton and Deansville Pl. R. Co. v. Rice, (7 Barb. 157.) In that case the defendant had subscribed for the stock at the opening of the books, but had not signed the articles of association. It was nevertheless held that he was liable. The court say, “ we think, too, that the fact that the corporation was not in esse when the agreement was signed is not of itself a sound objection to the right of maintaining an action upon it.” The case of the Trustees of Farmington Academy v. Allen, (14 Mass. Rep. 172,) is to the same effect. The decision in The Troy and Boston R. R. Co. v. Tibbits, (18 Barb. 297,) is the other way, upon the facts, although not upon the principle there enunciated. In that case the court say, (p. 305,) “ that the preliminary” (subscription) “ paper on which this action is sought to be sustained was not an essential and indispensable part of the machinery devised by the legislature for bringing the corporation into legal existence, nor does its vitality depend in any measure upon it.” I doubt that, even in the case then [468]*468before the court; it is certainly inapplicable to the plank road act, for that provides that when the stock shall be subscribed, and the per centage thereon paid as therein required, then the subscribers may, upon due "and proper notice, elect the directors, and thereupon they shall subscribe the articles of association, and adopt the other requisite subsequent proceedings to constitute them a corporation. Now, with all deference, it seems to me that the preliminary subscription is a necessary and indispensable part of the machinery for the construction of the corporation, without which it can assume neither form nor vitality. I am - satisfied that it is something substantial, and that upon the adoption of the subsequent measures it becomes a legal entity.
It is said that there is a want of the requisite consideration to render the agreement valid. If by that it is meant that there is not a certain instantaneous advantage to the subscriber, it is so far true; but if that should be a fatal objection no contract based upon a future consideration could be enforced, as there can be no certainty as to any thing depending upon human agency. It is enough, however, to support an executory contract, that upon the contingency of its performance the requisite consideration must necessarily arise. Now in this, case the subscription money could not be raised, or its payment exacted, without the investiture of corporate rights. Future necessarily resulting advantages from the performance of an agreement constitute an adequate consideration. Besides, a party who subscribes the preliminary paper by that act acquires certain rights. The subscribers elect the directors, and have the privilege, which cannot be denied to them, to form and subscribe the articles of association; and thus they have, by themselves or their agents, the formation and control of the company. Surely all these advantages are sufficient to bind their engagement.
The act of March 28, 1854, (Laws of that year, p. 164,) merely extends the time for completing the road, and authorizes the company, until it shall be completed, to receive certain tolls. That act was passed upon the application of the com[469]*469pany, and was beneficial to it. Besides, the legislature had the right to modify the original act, and could exercise it so long as there should be no substantial invasion of the rights originally conferred. I am satisfied that the subscribers were not released from their engagements by the additional privileges conferred upon the company.
[Dutchess General Term,
April 8, 1856.
The judgment in the suit against Griffin should be affirmed. In the suits against. Allen and Clapp the judgments should be reversed, and new trials had; costs to abide the event.
Rockwell, J., concurred.
Brown, J., dissented.
Judgment accordingly.
Brown, S. B. Strong and Rockwell, Justices.]