
    Irwin, Admr. v. Lombard University.
    
      Promissory note — Execrded to college — For purposes of the incorporation — •Sufficiency of consideration.
    
    The consideration for a promissory note executed to an incorporated college is the accomplishment of the purposes for which it is incorporated and in whose aid the note is executed; and such consideration is sufficient.
    (Decided February 2, 1897.)
    Error- to the Circuit Court of Hamilton county.
    The defendant in error brought suit in the common pleas court to recover the amount of a promissory note executed by Gilpin in his lifetime in aid of the endowment of Lombard University, the petition being in substance as follows :
    “The plaintiff says that the Lombard University, at Galesburg, 111., is a corporation duly organized under the laws of Illinois, for the purpose of conducting an institution of learning, and is authorized by the terms of its charter to receive and accept-donations and contributions for the purpose of' carrying on said institution of learning, establishing professorships, and generally to promote the interests of said institution, and that plaintiff is the duly elected treasurer of said Lombard University, and is now acting’ as such.
    Plaintiff further says that one Thomas Gilpin, since deceased, for the purpose of endowing said institution and to enable it to create certain professorships and to generally enhance the interests of said institution, executed and delivered to the treasurer of said Lombard University, at Gales-burg, 111., a certain promissory note, of which the following is a copy, with all endorsements thereon, to-wit:
    “$1,000. Cincinnati, Feb. 1, 1867..
    “Two years after date, for value received, I promise to pay to the order of the treasurer of Lombard University, at? Galesburg, 111., one thousand dollars, for the endowment of said institution, with interest at six per cent., payable annually.
    “Thomas Gilpin.”
    Plaintiff further says that the Lombard University secured from many persons at or about the time the said Thomas Gilpin executed and delivered said note, a large number of subscriptions,' some of which were paid in cash and others ’were evidenced by promissory notes, lor the purpose of creating a professorship in said institution, and relying upon the faith of such subscriptions, the said Lombard University has created said professorship at a large additional expense, and in many other ways caused large expenditures to be made on the faith of said subscriptions and relied upon the same to discharge the obligations thus entered into in that respect by said Lombard University; that the said Lombard University has in all respects performed all the conditions and obligations in respect to the creation of said professorship and in respect to other matters pertaining to the educational facilities of said college, and has ever since the said time relied upon said donations, subscriptions and promissory notes, including that given by said Thomas Gilpin, to sustain the additional expense thus created upon the faith of such subscriptions.
    The petition also alleges that Gilpin paid the interest which accrued upon said note to February' 11, 1887; that he died in 1890; that his administrator rejected the claim of the University upon said note and refused to allow it as valid claim against the estate, that the sum of $1,000.00 with interest from February 1, 1887, remained due thereon, and prayed judgment therefor.
    In his amended answer, the administrator admitted the execution of the note by Gilpin, the payment of interest by him as alleged in the petition, his death, and the rejection of the claim by his administrator. The answer also alleged “that the note sued on in plaintiff’s petition was executed by said Thomas Gilpin, deceased, during his life-time, as evidence of a subscription, and a voluntary gift, which said Gilpin at that time wished to make to said Lombard University, and that there was no consideration therefor; and further answering defendant denies each and every allegation in plaintiff’s amended petition contained except such as are herein specifically admitted.”
    The reply denied that the note was made without consideration, and alleged “that the said Thomas Gilpin in his lifetime with many other people living in the city of Cincinnati, and elsewhere in the state of Ohio, desiring to aid said Lombard University, an institution of learning in the city of Galesburg in the state of Illinois, and with a view of increasing its usefulness, agreed with each other and the Lombard University that they would each pay the sum of one thousand dollars for the purpose aforesaid; that the number so subscribing in the state of Ohio exceeded one hundred people, many of whom paid their subscriptions in cash, and others by giving their promissory notes; among the latter was the said Thomas Gilpin, who made, executed and delivered the promissory note set forth in the petition, in pursuance of said subscription and agreement as aforesaid; that in pursuance of said subscription and agreement by said Gilpin and others, residents of Ohio, a professorship was established in said university and named at the request of said donor in honor of the late I. D. Williamson, D. D., of Cincinnati, an eminent divine of the religious faith of said Thomas Gilpin and. others subscribing as aforesaid.
    Plaintiff for further reply says, that relying upon, the good faith of said Thomas Gilpin in making and delivering said promissory note, said university made and caused to be made large expenditures of money, and that the other persons subscribing in aid of said university have largely paid the amounts subscribed by them and acknowledged their obligations to pay the remainder whenever called upon by the authorities of said university.
    On the trial-in the court of common pleas, a jury was waived, and the cause was submitted to the judge upon the evidence and arguments of counsel. The judgment was in favor of the Univérsity, and a motion for a new trial being overruled, a bill of exceptions was taken containing all the evidence, and the cause was presented to the circuit court on error, where the judgment of the common pleas was affirmed. The petition in error in the circuit court invoked its judgment as to the sufficiency of the evidence to sustain the judgment.
    The evidence, without contradiction established the following facts:
    By act of the general assembly of the state of Illinois, Alfred Knowles and others and their successors were constituted a body corporate and vested with the powers usually conferred upon institutions designed to promote higher education, including power to contract and be contracted with, to sue and be sued, to acquire property by gift, grant, bequest, devise, or otherwise and to hold and convey the same, whether real, personal or mixed, to adopt á seal, to make by-laws for the government of the corporation, to receive and hold funds for the endowment of the university or of departments or professorships therein, to elect a president and such professors, tutors, instructors and other officers as they might deem for the interest of the university, to establish such departments of literature, science, law, medicine and theology as they may deem necessary to fix courses of study and to confer such academic, honorary or other degrees as are usually conferred by such institutions.
    At the time of the execution of Gilpin’s note, Ohio, Illinois and other states were canvassed for subscriptions or an endowment fund for the university, and more than one hundred thousand dollars was subscribed, and the subscriptions were collected as far as possible in cash and interest bearing notes. The income of the fund was to be used in payment of the salaries of professors and other current expenses.
    After the amount subscribed in Ohio was ascertained, a professorship of the Greek language and literature was established in the university, and in accordance with the wishes of the friends of the university in Ohio, it was called the “ Williamson Professorship.” A theological department was added, other teachers were employed, and further expense was incurred in improving and increasing apparatus.
    
      Irwin <& Murry, for plaintiff in error.
    This case presents not only the ordinary phases of a subscription to an educational institution, but also several other points growing out of the nature of the transaction, all or any of which we regard as being fatal to the claim of defendant in error.
    1. This was a gratuitous subscription wholly unsupported by a consideration1.
    2. Granting that the making of improvements and the incurring of expenses, relying upon the promise gives rise to a consideration, this being an endowment fund, the defendant in error could only rely upon the income arising from fund i. e. the interest, and this has been paid.
    
      3. Supposing a ease of consideration ' be made out by the proof of the incurring of obligations on the faith of the promise (which we submit is the only claim defendant in error' canhope to maintain) this consideration cannot retroact and give validity to a note void when given.
    4. The real promise was merely for the payment of interest and nothing more, save at the option of Gilpin himself.
    An agreement on the part of the institution to receive and invest the money when paid and apply the interest to the payment of officers’salaries is no consideration. Stewart v. College, 2 Denio (N. Y.) 403 ; Church v. Kendall, 121 Mass., 528; Trustees of Hamilton College v. Steioart, 1 Comstock (N. Y.) 581; Presbyterian Church of Albany v. -Cooper et al., 112 N. Y., 517; Baptist Church v. Cornell et al., 117 N. Y., 601; The Trustees, etc., v. Davis, 11 Mass., 113 ; Bridgewater Academy v. Gillbert, 2 Pick., 578; Ohio Wesleyan Female College v. Love's Fxr., 16 Ohio St., 28; Johnson v. Otterbein University, 41 Ohio St., 531.
    The alleged consideration of naming a chair at the request of Ohio subscribers is too illusory and unsubstantial to merit .more than passing notice. Furthermore it is not shown that Gilpin either requested or knew of the creation of the professorship. So this claim must also fail.
    The only serious ground of contention of the University is the incurring of obligations at the special instance and request of the promisor and upon the faith of his promise.
    There is certainly no request, as the note reads, either express or implied, either to do any act or to incur any liability upon the faith of the gratuitous promise therein contained.
    
      There is nothing in the evidence to show either directly or indirectly or by fair implication that Gilpin ever requested the doing of anything or the incurring- of any obligation.
    In the absence of testimony such request can not be inferred, and such proof is absolutely necessary to enable defendant in error to maintain this action.
    Nor are authorities wanting on the proposition that the mere handling of a fund (for that is our case, as no obligation could have been incurred, relying upon the principal) is not a sufficient consideration to support a promise.
    We confess a total inability to see any difference in principle between the creation of a fund to pay previously incurred indebtedness and one to pay expenses to be incurred in the future.
    The liability on the part of Gilpin (if any) only arose after the note was given, upon the doing of the work, etc. Up to that time a suit upon the note must have failed. The enforceable contract then cannot be predicated upon the note as a note, but should be on the promise, made enforceable by the doing of work, etc., after the note was given.
    Paxton, Warrington dc Boutet, for defendant in error.
    By admitting the execution and delivery of the note as stated in the petition, the burden is upon the defendant to show that there was no consideration therefor. He has adduced no testimony whatever, but relies solely upon the testimony offered by plaintiff, to establish his defense. By the state of the pleadings, it was not necessary for plaintiff, in our opinion, to offer any evidence whatsoever until the defendant had adduced some testimony at least to establish his defense. But we did offer evidence, however, in chief, which proved substantiaily the allegations of the amended petition. We maintain, therefore, that the facts stated in the amended petition being sufficient in law to warrant a recovery, 'Ohio Wesleyan Female College v. Love's Exr, 16 Ohio St., 20; then the evidence adduced by us must alsowarranta recovery.
    It is the policy of our state to encourage institutions of this kind, and all statutory enactments in their behalf should be liberally construed. Hooker, Admr., v. Wittenberq College, 2 Cin’ti Sup. .Ct. Rep., 353.
    It is contended, however, by defendant, that it is not shown by the testimony that anything was ever done by Lombard University upon the faith of the execution and delivei-y of this promissory note by Gilpin.
    The depositions of the two witnesses, Isaac A. Parker, professor of Greek language in Lombard University, and T. Judson Hale, secretary of the Lombard University, called by plaintiff, establish beyond peradventure that upon the faith of the endowment fund of one hundred thousand dollars, ■which was subscribed and paid for in cash and by notes, of which the note sued upon is a part, the Lombard University created additional professorships for said college, and expended other sums of. money for the improvement and advancement of said college. With this testimony, how is it possible to claim that if the payment of the note is enforced it will be giving the consideration a retroactive effect. The facts established bring the ease clearly within the rule that “where such subscription is made and accepted, and liabilities incurred on the faith of it, its collection cannot be defeated on the ground of the supposed want of valuable or legal consideration.” Ohio Wesleyan Female Colleger. Love’s Ex’rs., 16 Ohio St., 20; Cottage St. Meth. Fpis. Church v. Kendall, 121 Mass., 528; Simpson College r.Bryan, 50 la., 293; Sirnpson College v. Tuttle, 71 la., 596.
    We will concede for argument’s sake that if it were shown in this ease that the Lombard University did nothing whatever upon the faith of the subscriptions to the endowment fund, or in case said subscription was made to pay an existing indebtedness of the University, it would be a good defense to the payment of this note. Ilamor v. Moore’s Admr., 8 Ohio St., 239 ; Stctrrv. StarBs Exr, 9 Ohio St., 74. d
    The ground of the decision in the case of John» son v.Otterbein University, 41 Ohio St., 527, war that the subscription was made to pay an existing-'' indebtedness of the college, and there was no pre tense that any expenditures had been made by the institution on the faith of such subscription.
   Shauck, J.

It does not appear that anything of value passed from the university to Gilpin as a consideration. for the note, nor that he requested it to. expend money on the faith of his promise; nor that he requested others to contribute to the endowment and support of the university, except as such requests are to be inferred from the circumstances of himself and others when they made donations and executed obligations of this character, and from the nature of the enterprise which he and other donors and obligors were alike desirous of promoting, and from the character and objects of the obligee. It does, however, appear that Gilpin and many others were interested in maintaining Lombard University as an institution of learning, and that, a charter having been obtained from the legislature of Illinois, they undertook to contribute the funds necessary to the accomplishment of their purpose, some making donations in cash, others executing obligations of the character of that executed by Gilpin. It also appears that these donations and obligations were sufficient in amount and character to encourage the corporation to expend money and incur obligations in carrying out the purposes of its creation. The enterprise to which Gilpin and others contributed and subscribed did not fail, but went forward.

In view of these facts, counsel for the plaintiff n error contend that the note is a mere gratuity, oid for want of consideration; and they in voke the general rule that a consideration is necessary to support.a promise, relying especially upon Johnson v. University, 41 Ohio St., 527; Church v. Cooper, 112 N. Y., 517; and Church v. Kendall, 121 Mass., 528, as applying that rule to contracts of the character of this.

That a promise which does not secure a benefit to him who makes it, or loss or detriment to him to whom it is made or in any manner influence the conduct of others is not enforceable, is a recognized general rule of the law. According to familiar definition, a consideration is a benefit to the promisor or a loss or detriment to the promisee; and this definition is sufficiently comprehensive to determine the validity of the . promises which are usually the foundations of actions. But the cases are not infrequent in which, to avoid arbitrary exceptions, it has been found necessary to define more accurately and comprehensively. In the case of Currie v. Misa, L. R. 10 Exch., 153, it is said: “A valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility, given, suffered or undertaken by the other.” In Addison on Contracts (page 2) the author adopts the definition of the Indian Act: “When, at the desire of the promisor, the promisee, or any other person, has done, or abstained from doing’, or does or abstains from doing or promises to do or abstain from doing something, such act or abstinence or promise is called a consideration for the promise.” Certainty of adjudication is promoted by the nearest possible approach to scientific accuracy. The comprehensiveness of the definition lastly given is required by well considered cases in .which contracts have been enforced, especially the class of contracts commonly .called subscriptions. It would not aid the present inquiry to show that decisions of unquestionable authority have affirmed the validity of contracts resting upon considerations not embraced in any of the foregoing definitions. Por present purposes it is sufficient that all th'e alternatives embraced in the definitions quoted are required by the adjudications.

Tested by either of the comprehensive definitions quoted, the contract under consideration is valid and enforceable. By the desire of Gilpin, many other persons made donations in money and executed obligations to the university of like character with his, and his promise was an inducement to their donations and promises. It is true that this doctrine is rejected by the supreme court of Massachusetts in Church v. Kendall. But in that state, one for whose benefit a contract is made by others, cannot maintain an action on it for want of privity. 'While in this state it has long been established that one for whose benefit others contract, upon a consideration sufficient as between themselves, may maintain an action for its enforcement. Crumbaugh v.Kugler, 3 Ohio St., 544; Thompson v. Thompson, 4 Ohio St., 333; Emmitt v. Brophy, 42 Ohio St., 82.

It is equally apparent that, prompted by the promises and gifts of Gilpin and others, “responsibility has been undertaken” by the university. It did not abandon the educational enterprise which these donors and promisors were desirous of promoting. Whether the object of the promisors was to secure the opportunity of educating their own children under such influences as they desired, or, more generally to contribute to the 'public welfare by increasing the facilities for higher education, it has been accomplished. It has been accomplished by the expenditure of money and the incurring of obligations, in reliance upon their .promises and similar promises from others.

Institutions of this character are incorporated by public authority for defined purposes. Money recovered by them on promises of this character, cannot be used for the personal and private ends of an individual, but must be used for the purposes defined. To this use the university is restricted not only by the law of its being but as well by the obligations arising from its acceptance of the promise. A promise to give money to one to be used by him according to his inclination and for his personal ends is prompted only by motive. But a promise to pay money to such an institution to be used for such defined and public purposes rests upon consideration.

The general course of decisions is favorable to the binding obligation of such promises. They have been influenced, not only by such reasons as those already - stated, but in some cases, at least by state policy as indicated by constitutional and statutory provisions. The policy of this state, as so indicated, is promotive of education, religion and philanthropy. In addition to the declarations of the constitution upon the subject, the policy of the state is indicated by numerous legislative enactments providing for the incorporation of colleges, churches and other institutions of philanthrophy, which are intended to be perpetual, and which not only for their establishment, but for their perpetual maintenance, are authorized to receive contributions from those who are in sympathy with' their purposes and methods — the only source from which, in view of their nature, their support can be derived. Looking to the plainly declared purpose of the law making department, promises made with a view to discharging the debts of such institutions, to providing the means for the employment of teachers, to establish endowment funds to give them greater stability and efficiency, and whatever may be necessary or helpful to accomplish their purposes or secure their permanency must be held valid. A view which omits considerations of this character is too narrow to be technically correct.

It is not contemplated by the parties, nor is it required by the law, that in eases of this character the institution shall have done a particular thing in reliance upon a particular promise. • Not only do the law and the parties contemplate the permanency of the institution, but all promisors understand that the proceeds of their promises will be mingled with prior and subsequent donations and tog-ether constitute the financial support of the enterprise. The cases must be rare indeed in which such contributions or promises would be made if others had not been made before, and rarer still, in which they would be made but for the belief that others will be made afterwards.

The requirements of the law are satisfied, the objects of the parties secured, and the perpetra-' tion of frauds prevented by the conclusion that the consideration for the promise in question is the accomplishment, through the university, of the the . purposes for which it was incorporated and in whose aid the promise was made. The defense properly failed because there was neither allegation nor proof of abandonment of those purposes.

From the very numerous cases in which these views are sustained by adjudications in other states, the following are selected: Academy v. Nelson, 24 Vt., 189; Institute v. Haskell, 73 Me., 140; College v. Bryan, 50 Iowa, 293; Collier v. Educational Society, 8 B. Mon., 68; Garrigus v. Missionary Society, 28 N. E. R., 1009; Barnett v. College, 37 N. E. R., 427 ; Amherst Academy v. Cowls, 6 Pick., 427; Roche v. Seminary, 56 Ind., 198; also Beach on Contracts, section 179, note 2.

In this state the reported eases, with but one -exception, are consistent with these views. Indeed, the validity of such promises is supported by all the cases in which it has been held that subscriptions for public purposes of such a nature are enforceable. For the law, regarding the substance rather than the form, permits nodistinetion because of the promises being in one instrument or several instruments. And the mutuality of the interests of the several promisors is not to be determined as a matter of time from the dates of their promises but from the continuity and perpetuity of the object to be accomplished. In Commissioners v. Perry, 5 Ohio, 56, this court established the validity of subscriptions to the accomplishment of a material purpose. The case of College v. Love's Exr., 16 Ohio St., 20, shows that the purposes of philanthropy are entitled to the same regard and that the .character of the obligation as a subscription is not affected by the fact that it is a separate paper. It also establishes the enforceable character of an instrument differing in no leg’al sense from that before us.

An examination of the digest of the decisions of the various courts of the state will show that there has been a uniform adherence to these views until the case of Johnson v. University, 41 Ohio St., 527, was decided by the commission. A majority of the court are of the opinion that there is not such identity of facts in that case and this that we are required here to overrule it.

Judgment affirmed.  