This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Consideration for subscriptions is sometimes sought in the mutual promises of the subscribers. By the great weight of authority, the promise of a subscriber is sufficient consideration for the promise of the other subscribers if such promises were in fact made each upon the consideration of the promise of the other subscribers.1 In jurisdictions in which the consideration may move from a third person, the mutual promises of the subscribers, if actually intended by them as considerations, should be held to be sufficient considerations for the promise to pay such subscriptions to the charitable organization, if such organization, or the representative thereof, is a party to such contract.2 The great weight of authority is to the effect that if the contract is made between the subscriber and the beneficiary, so that the beneficiary is a party to the contract, the beneficiary may maintain an action upon such contract in all jurisdictions in which the consideration need not move from the promisee. The objection to this theory as a basis of decision, is that it is invoked in cases in which the subscribers did not really intend that the promises of other subscribers should be the consideration for such subscription; and a fiction is resorted to, in order to enforce a promise if made for a charitable or religious purpose. In jurisdictions in which the consideration must move from the promisee, the beneficiary, who is a party to such contract, can not maintain an action thereon, since the consideration did not move from the promisee.3 In fact, such a consideration does not move from the promisee and does not inure to the benefit of the promisor.4 If such contract is made between the subscribers and the beneficiary is not a party thereto, the beneficiary may sue upon such contract in jurisdictions in which the beneficiary under a contract, who is not a party thereto, may sue upon such contract; while in jurisdictions in which the beneficiary may not sue if he is not a party to the contract, the beneficiary can not maintain an action upon such contract against the subscribers. The promise of the trustees of the beneficiary to attempt to add a certain amount to a given subscription is a consideration for a subscription.5
22 Presbyterian Board of Foreign Missions v. Smith, 200 Pa. St. 361, 58 Atl. 689.
23 St. Paul's Episcopal Church v. Fields, 81 Conn. 670, 72 Atl. 145.
24Brokaw v. McElroy, 162 la. 288, 50 L. It. A. (N.S.) 835, 143 N. W. 1087.
25Brokaw v. McElroy, 162 Ia. 288, 50 L. R. A. (N.S.) 835, 143 N. W. 1087.
26 Augustine v. Methodist Episcopal Society, 79 111. App. 452.
27 Johnson v. Otterbein, 41 O. S. 527.
28 Trustees v. Garvey, 53 111. 401, 5 Am. Rep. 51.
29 See Sec. 522.
1 Arisona. Hurley v. Young Men's Christian Association, 16 Ariz. 26, 52 L. R. A. (N.S.) 220, 140 Pac. 816.
Connecticut. Berkeley Divinity School v. Jarvis, 32 Conn. 412.
Georgia. Owenby v. Georgia Baptist Assembly, 137 Ga. 698, 74 S. E. 56.
Indiana. Petty v. Church, 95 Ind. 278.
Iowa. Brokaw v. McElroy, 162 la. 288, 50 L. R. A. (N.S.) 835, 143 N. W. 1087.
Kentucky. Curry v. Kentucky Western Ry. Co. (Ky.), 78 S. W. 435.
Massachusetts. Trustees v. Stetson, 22 Mass. (5 Pick) 506. (The doctrine of these Massachusetts cases was not followed in Cottage Street M. E. Church v. Kendall, 121 Mass. 528, 23 Am. Rep. 286.) Watkins v. Eames, 63 Mass. (9 Cush.) 537.
Michigan. Allen v. Duffie, 43 Mich. 1, 38 Am. Rep. 159, 4 N. W. 427.
Nebraska. Armann v. Buel, 40 Neb. 803, 59 N. W. 515.
New Hampshire. Congregational Society v. Perry, 6 N. H. 164, 25 Am. Dec. 455 [since overruled, Curry v. Rogers, 21 N. H. 247.
South Carolina. Bates v. Taylor, 28 S. Car. 476, 6 S. E. 327. If the liability of one subscriber is fixed, as by the location of a college, his promise to pay his subscription can not be a consideration for a subsequent subscription. Schuler v. Mynton, 48 Kan. 282, 29 Pac. 163.
2 See Sec. 531 et seq.
3 Cottage Street M. E. Church v. Kendall, 121 Mass. 928; Hamilton College v. Stewart, 1 N. Y. 581; First Presbyterian Church v. Cooper, 112 N. Y. 517, 8 Am. St. Rep. 767, 3 L. R. A 468, 20 N. E. 352.