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.
Language which shows an intention on the part of each promisor to assume only a part of the entire liability imports a several contract.1 Thus such language as ."we promise each to pay" a certain proportion of the debt, as a pro rata share of the purchase price;2 or of the expenses of litigation in which the same question is presented, involving the separate interests of the promisors;3 or "we promise to pay the amount set opposite our respective names," as in contracts for subscriptions;4 or "we, the undersigned, promise to pay the following subscriptions," with an amount opposite the name of each subscriber,5 imports a several contract. Hence, one subscriber can not use as a defense the fact that some of the other subscribers are minors or insolvent, since such fact does not increase his liability.6
Tennessee. Jarnagin v. Stratton, 95 Tenn. 619, 30 L. R. A. 495, 32 8. W. 625.
See also, Forst v. Leonard, 112 Ala. 296, 20 So. 587.
20Bell v. Adams, 150 Cal. 772, 90 Pac. 118; Rutherford v. Holbert, 42 Okla. 735, L. R. A. 1915B, 221, 142 Pac. 1099.
21 Groves v. Rentell, 153 U. S. 465,
38 L. ed. 785.
1Moss v. Wilson, 40 Cal. 159; Mc-Arthur v. Board, 119 la. 562, 93 N. W. 580; Strong v. Schaffer, 39 S. D. 250, L. R. A. 1918F, 648, 163 N. W. 1035; Colt v. Learned, 118 Mass. 380; Davis & Rankin Building & Manufacturing Co. v. Cupp, 89 Wis. 673.
39 S. D. 250, L. R. A. 1918F, 648, 163 N. W. 1035.
2McArtbur v. Board, 119 la. 562, 93 N. W. 580; Fuselier v. Lacour, 3 La.
Ann. 162; Larkin v. Butterfield, 29 Mich. 254.
3 Adriatic Fire Ins. Co. v. Treadwell, 108 U. S. 361, 27 L. ed. 754.
4 California. Moss v. Wilson, 40 Cal. 159; O'Connor v. Hooper. 102 Cal. 528, 36 Pac. 939.
Illinois. Robertson v. March, 4 111. 198.
Michigan. Davis, etc., Co. v. Murray, 102 Mich. 217. 60 N. W. 437.
Nebraska. Davis v. Creamery Co., 48 Neb. 471, 67 N. W. 436.
Texas. Darnall v. Lyon (Tex. Civ. App.), 19 S. W. 506.
Vermont. Connecticut, etc., Ry. v. Bailey, 24 Vt. 465, 58 Am. Dec. 181.
Wisconsin. Davis, etc., Co. v. Cupp, 89 Wis. 673, 62 N. W. 520; Hodges v. Nalty, 104 Wis. 464, 80 N. W. 726.
5Landwerlen v. Wheeler, 106 Ind 523, 5 N. E. 888; Bank v. Smith. 44 Utah 284, 140 Pac. 122.
6 Chicago, etc., Co. v. Higginbotham (Miss.), 29 So. 79.
The presumption in contracts of subscription is that a several liability is intended.7 Hence, a promise "to pay the above amount"8 has been held to import a several liability. Subscription contracts in which the subscribers promise a gross sum to the adversary party, of which each subscriber is, by the terms of the contract, to pay a definite amount, are ordinarily held to be several with reference to the liability of the subscribers.9 A promise by A to sell property for three thousand dollars, to a number of subscribers, who agree to pay one hundred dollars for each share, the total number of shares to be thirty, imposes a several liability upon the subscribers.10 A written contract between A, a contractor, and B, C and D, and a number of other subscribers, which provides that "we, the said subscribers, hereto agree to pay the above amount ($3,750) for such butter factory when completed," and which also provides that when such amount was subscribed, the subscribers were to incorporate and the stock of such corporation was to be divided in shares which were to be issued to the subscribers in proportion to their paid-up interests, is held to be a several contract; and if the contractor completes the factory, he can recover from each subscriber only the amount which appeared opposite his name. If any subscriptions prove to be invalid, the contractor can not recover the deficit from the remaining subscribers, nor can he enforce a lien upon the building.11 However, it is held that a contract by which a number of subscribers to a proposed telephone system agree to pay their pro rata share of the cost of installing the system, creates a joint liability as between the subscribers and one who deals with them as a voluntary association.12
If the language used shows a clear intent to incur a joint liability there is nothing in the nature of a contract of subscription that makes this impossible. Thus the words "we, the subscribers, agree to pay" a gross sum.13 are held to impose a joint liability.
7Hall v. Thayer, 53 Mass. (12 Met.) 130; Davis v. Belford, 70 Mich. 120, 37 N. W. 919; Davis & Rankin Building & Manufacturing Co. v. Cupp, 89 Wis. 673, 62 N. W. 520.
8 Davis v. Belford, 70 Mich. 120, 37 N. W. 919.
9 McArthur v. Board, 119 la. 562, 93 N. W. 580; Waddy Bluegrass Creamery Co. v. Davis-Rankin Building & Mfg. Co., 103 Ky. 579, 45 S. W. 895; Davis & Rankin Building & Mfg. Co. v. Murray, 102 Mich. 217, 60 N. W. 437.
Contra, Clements v. Miller, 13 N. D. 176, 100 N. W. 239.
l0 McArthur v. Board, 119 la. 562, 03 N. W. 580.
11 Davis & Rankin Building & Manufacturing Co. v. Cupp, 89 Wis. 673, 62 N. W. 520.
12 Clements v. Miller. 13 N. D. 176, 100 N. W. 239.
13 Davis v. Shafer, 50 Fed. 764.
A contract of subscription to carry out certain purposes whereby the subscribers undertake each to pay a certain sum is several as to such payments, but is joint as to the covenants to devote the fund thus raised to certain specified purposes.14 Hence, a repudiation by a part only of the subscribers does not end the contract. The adversary party may perform and recover the several subscriptions from the subscribers.15 Hence, though no joint recovery can be had on the subscriptions, the subscribers should be joined as defendants in an action involving the common fund.16
A contract by which a number of promisors agree to pay a gross sum in certain proportions, is generally held to create a several liability.17 In some jurisdictions, however, such liability has been held to be joint and several. A contract by which A, B and C, as subscribers, agree to pay a certain sum to X for value, which is followed by the names of A, B and C, with a certain sum of money opposite each name, is said to create a joint obligation, but one which X may at his election treat as a several obligation as against each subscriber.18