established rule of law, hold that a naked promise to pay money for a public object can not be enforced for the want of a consideration, they have also decided with great unanimity, that if the promise itself, or any other promise, upon which it is founded, contains a request, or that which by any fair construction can be construed as a request to the trustees, or others representing the institution for whose benefit the promise is made, to do any act, or incur any expense, or to undergo any inconvenience, and such institution does the act, or incurs the expense, or submits to the inconvenience, this request and performance on the behalf of the institution is a sufficient consideration to support the promise.” 1 § 1207. Illustrations of this Principle. Applying this princi ple, where the subscriber gave his note for his subscription to endow a college, and the payee, upon the faith of it, had incurred expense, it was held that it was enforcible.2 It has been held that a sub scription by citizens in pursuance of an act of the legislature, to a fund for the building of a state house, is not void for want of consideration, but may be supported on the theory that the State, through the act of the legislature, has undertaken to apply the funds for that purpose. 3 The defendant subscribed toward the payment of a debt due for the building of a church edifice. The trustees of the church, in their corporate capacity, but on the faith of the subscription list, borrowed money with which to pay the church debt. It was held that the subscriber was bound; since "the lender of the money may have relied for his payment, not merely on the credit of the trustees in their corporate capacity, but on the subscription list in their hands." 4 § 1208. Contrary View that Money not Deemed Expended on the Faith of the Subscription: Formation of Corporation not Authorized Thereby. It has been reasoned upon this subject that the consideration which is necessary to support a subscription, and indeed any other contract, with the exception of negotiable paper, must be a consideration derived by one party from another party to the 1 Philomath College v. Hartless, 6 Ore. 158; s. c. 25 Am. Rep. 510, 511; opinion by Watson, J.; citing Barnes v. Perine, 12 N. Y. 18; Trustees v. Garvey, 53 II. 401; s. c. 5 Am. Rep. 51; McAuley v. Billenger, 20 Johns. (N. Y.) 89; Thompson v. Mercer Co., 40 Ill. 379. 2 Philomath College v. Hartless, 6 Ore. 158; s. c. 25 Am. Rep. 510. 3 State Treasurer v. Cross, 9 Vt. 289; s. c. 31 Am. Dec. 626. Compare University v. Buell, 2 Vt. 48, and Carpenter v. Mason, 3 Scam. (Ill.) 376. 4 Trustees v. Garvey, 53 Ill. 401; s. c. 5 Am. Rep. 51. action. When, therefore, a subscription is made, but the subscription paper does not authorize the formation of a corporation to carry out its purposes, and nevertheless some of the subscribers thereafter undertake to form a corporation for that purpose, the corporation cannot maintain, on the contract of subscription, an action against a subscriber who does not assent to its formation. Nor can such an action be maintained on the theory that the corporation, by expending money on the faith of the subscription, has raised a consideration such as makes it binding. "There is no proof," said Shepley C. J., speaking of such a case, of an expenditure of money by the corporation at the request of the defendant, express or implied, or for a purpose from which he could derive any benefit. The corporation does not appear to have expended money except for property or purposes of its own, in which the defendant had no interest." 1 66 § 1209. Consideration where the Corporation is in Existence. Where the corporation is in existence at the time when the subscription is made, no room is left for these speculations; since there is a mutuality of promise on the part of each of the parties that must be performed. But even here the courts have frequently discovered the consideration in additional circumstances. Thus, where the corporation had been chartered, and a subscription to its stock was in the following terms, which were the terms prescribed by its charter, it was held to embody a good contract: "We, whose names are hereunto subscribed, do, for ourselves and our legal representatives, promise to pay to the president, directors and company of the Union Turnpike Road, the sum of $25, for every share of stock in such company, set opposite to our respective names, in such manner and proportion, and at such time and place, as shall be determined by the said president, directors and company." "That form," said the court," contains an absolute promise to pay the money to the president, directors and company. On the one side the interest of the company selling the shares, and the public advantage to be derived from the success of the institution, and on the other, the expected profits to accrue from the stock, were sufficient consideration to uphold the promise." 3 1 Machias Hotel Co. v. Coyle, 35 Me. 405; s. c. 58 Am. Dec. 712. 2 Selma &c. R. Co. v. Tipton, 5 Ala. 787; s. c. 39 Am. Dec. 344, 352. 3 Union Turnpike Co. v. Jenkins, 1 Caines (N. Y.) 381, 390. § 1210. Effect of the Words "Value Received."— The words "value received" in a subscription paper have been held to import prima facie a consideration, and to render the subscriber liable, irrespective of the question whether he actually became a member of the corporation. This will appear from a case where the defendant subscribed an instrument, promising, for value received, to pay the amount of certain shares to two persons, for the purpose of building a plank road designated, and authorizing those persons to transfer the subscriptions to a company to be formed; and the company was organized for this purpose. It was held, in an action by the company to enforce the contract, that, though the defendant never signed articles of association, nor accepted stock, and could not be considered a member of the company, he was liable on his promise for the amount of his subscription; that the words "value received" were prima facie evidence of consideration for his promise; and that no consideration need be shown for the transfer by said persons to the company, other than that arising on the facts stated.1 § 1211. Subscription a Good Consideration for Other Undertakings. — A subscription for stock of a company, being a legal obligation, which can be enforced by action, and by forfeiture for non-payment, is therefore a good consideration for a mortgage to secure the payment of the amount subscribed. On a principle already considered, such a subscription is a good consideration for a promise on the part of other persons to pay money towards the undertaking. § 1212. Subsequent Failure of Consideration. · Where payment for the shares has been secured by a mortgage, as stated in the preceding section, the neglect or omission of the company to issue to the mortgagor scrip for his shares before payment, will not amount to a failure of the consideration,especially where it appears that, by so doing, they will make 1 Eastern Plank Road Co. v. Vaughan, 14 N. Y. 546; affirming s. c. 20 Barb. (N. Y.) 155. • Buttershall v. Davis, 81 Barb. (N. Y.) 323. 3 Ante, § 1206. ✦ Ashuelot Boot &c. Co. v. Hoit, 50 N. H. 548. themselves personally liable to the creditors of the company.1 Moreover, as we shall hereafter see more fully,2 such a consideration does not fail in the theory of the law, because of the failure of the corporation, at the time when the action is brought, to enforce the contract to construct their works in accordance with the declarations of the promoters of the corporation, on the faith of which the promise of the subscriber was made; since the very object of the subscription is to assist in affording the means to construct their works. The agreement to construct remains a sufficient consideration for the subscription.3 § 1213. No Consideration where the Company, and not the Subscriber, Gets the Shares. One court has rendered a decision which is tantamount to holding that where a subscriber gets no direct personal benefit from his subscription — more briefly where he does not get the shares, - there is no consideration for the promise, - as where the subscription contract, not under seal, of a mining company, was conditioned that two thousand of the capital shares should be paid to trustees, to be by them held for the benefit of and subject to the direction of the company. Here it was held that, the trustees being, pro hac vice, the servants of the company, and their possession, its possession, the consideration was too shadowy to support a contract. But it has already been sufficiently shown that a direct benefit to the promisor is not at all necessary to support the contract. It may consist in detriment to others, or in the fact of others acting on the faith of it.5 ARTICLE III. THEORIES AS TO THE NECESSITY OF PAYING THE STAT UTORY DEPOSIT. SECTION 1216. View that payment of cash deposit is necessary to the validity of the subscrip tion. 1217. Reasons given in support of this view. 1218. Rule that payment of deposit must be made in specie or its equivalent. 1219. Statute not complied with by giving a note. 1220. A contrary view. 1221. Whether payment by bank check sufficient. 1222. Simulated payments by giving checks which are not collected. 1223. Further as to the manner of payment. SECTION 1224. View that the payment of such a deposit is not necessary. 1225. A similar view in England. 1226. Subscription valid though payment at a subsequent time. 1227. Invalidity of secret agreement that the check shall not be paid. 1228. Subscription void for non-payment of deposit made good by estoppel. 1229. Where subscription made after the organization. 1230. What if the question arises un- 1231. Illustration in case of surrender § 1216. View that Payment of Cash Deposit is Necessary to the Validity of the Subscription. Where the charter or governing statute requires the payment in cash of a certain percentage of the amount subscribed, at the time of making the subscription, there is a division of judicial opinion upon the question whether this payment is necessary to give binding force to the contract. Many of the courts hold that it is necessary where the subscription is made before organization.1 1 Fiser v. Mississippi &c. R. Co., 32 Miss. 359; State Ins. Co. v. Redmond, 1 McCrary (U. S.), 308; Perry v. Hoadley, 19 Abb. N. Cas. (N. Y.) 76; People v. Chambers, 42 Cal. 201; Charlotte &c. R. Co. v. Blakely, 3 Strobh. (S. C.) 245; Wood v. Coosa &c. R. Co. 32 Ga. 273; Jenkins v. Union Turnp. Co., 1 Caines Cas. (N. Y.) 86, 94 (recognized in Goshen Turnp. Co. v. Hurtin, 9 Johns. (N. Y.) 217; s. c. 6 Am. Dec. 273); Highland Turnp. Co. v. McKean, 11 Johns. (N. Y.) 98; Dutchess Cotton Manufactory v. Davis, 14 Johns. (N. Y.) 238; s. c. 7 Am. Dec. 459. These three last decisions state that this was the ground on which the case of Jenkins v. Union Turnp. Co., supra, was finally determined in the Court of Errors. But as hereafter seen, they no longer express the law of New York on the subject, Post, §1224. The same view was taken of the necessity of |