Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/90

 § 93.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VI. be said further that the detriment caused B., C, D., etc., in promising to take shares, or in merely signing an agreement, is ample consideration to support the promise of A., irrespective of the question whether the promises of B., C, D., etc., in them- selves considered, are valid promises or not. 1 In other words, where it is expressly stipulated in the agreement, or where, from the tenor of the same, it may appear that the making of the mutual or respective promises contained in the agreement is to constitute the consideration for the agreement, it will not be the fact that the promises when made are enforceable, but the making of them which will constitute the consideration ; though it follows that the promises when made will be binding, because founded on a valid consideration. The question, then, will be, in any given instance, was the consideration of the promise of A. the^nakino- of the promises by B., C, D., etc., or the^gej^ojunjince of their promises by the latter ? In the former case the agreement is as clearly binding as in the latter case it is, in itself considered, worthless ; because, until the promises of B., C, D., etc., have been performed, there is no consideration for the promise of A., which, therefore, until such performance, is in legal contemplation nothing more than an offer, which may be withdrawn at any moment. Through perforinance.Jiowever, on the part of B., C, D., etc., the prom- ise of A. ma»vbecome binding, lor lnstance^the corporation having been formed, and A., not having in the mean time with- drawn from the agreement, if B., C, D., etc., take and pay for their shares as agreed, they (or the corporation, if it shall ap- pear to have been the intention that the corporation should have the right to enforce the promise 2 ) can then force A. to take and pay for his shares as well ; for if relying on A.'s prom- 1 It is, of course, quite possible for an agreement of this kind to be drawn so as to be little more than worthless; e. g., the promise of each might be made conditional on the actual tak- ing of the shares by the others. Here, plainly, there is no binding contract. Such an invalid instrument would be the following: "It is mutually cove- nanted and agreed by and between the parties hereto, that each of the 70 said parties will take five shares in the stock of the X. Co. when organ- ized, in consideration of each of the other parties hereto taking five shares," etc. This form might be binding were it not for the words "in consideration," etc. 2 See Eastern Plank Road Co. v. Vaughan, 14 N. Y. 546.