55 Barb. 45 | N.Y. Sup. Ct. | 1869
If the learned .referee has correctly found the facts in this case, I find myself entirely'unable to sustain his conclusion of law, that the defendant is indebted to the plaintiff in the sum of $2000, with interest from the
The things performed by the parties in order to constitute an organization are matters of fact. Whether the performance of those things does constitute an orgnization, is a question of law. These are not changed by their classification in the findings by the referee. The referee, I think, correctly interprets the meaning and intent of the parties in their agreement, that by the organizing or forming this corporation which they were to create, the contingency would have arrived, or the condition would be performed, upon which .the $2000 would become due.
As the formation of this body was not directly a legislative act, it could only become a (Corporation by a compliance with the provisions of the general act which authorizes their organization. (Laws of 1848, ch. 40.) Under this act and its amendments, three or more persons may make, sign and acknowledge before a proper officer, and file in the office of the clerk of the county in which the business of the company shall be carried on, and a duplicate thereof ■in the office of the Secretary of State, a certificate in writing, in which shall be stated the corporate name of the company, and the objects for which the corporation shall be formed, &c. It is found by the referee as a fact that no certificate was filed in the office of- the clerk of Saratoga county, and po duplicate was ever filed in the office of the
It is very clear from the whole case, and the facts found, that the whole negotiations of the parties and the agreements of liability to each other, were to depend upon the organization, incorporation and success of a stock company for the manufacture of brick and preparation of peat; and that the failure and abandonment by the parties of that enterprise carries with it the basis and consideration upon which the agreements to pay were chiefly made. If this is so, it is unjust that one of the parties should bear all the burthens of the failure. It is true, that under the agreement, the defendant entered into the possession of a largely incumbered farm, and had a few weeks’ possession, and until the incumbrances drove him therefrom, It is also true that he paid the plaintiff $1000 of the consideration,
The authorities cited by the plaintiff to prove that cor- ■ porations, or persons acting and holding themselves out to be such, are estopped from denying their legal incorporation to third persons, and to parties who have been induced to give credit to their representations, are not controverted. The proposition is sound law, but has no application tó this case. Here, there was no holding out .to third persons; no person is here to complain of having given credit to them as a corporation. The whole transactions were confined to themselves, and -among themselves all were equally well informed;, and all and each of them knew that there was no incorporation; nobody was misled; nobody deceived.
What then was the intent of the parties, by their agreement, whose obligations were to become payable and mature, upon the organization of a corporation ? Did. they intend it should be a real, a legal corporation, or a mere bogus or sham organization ? The action of the parties, subsequent to the agreement, shows that they were not ignorant of what the law required. The articles of association, as drawn up, were' under the provisions of the act of 1848, in relation to the formation of corporations for manufacturing, mechanical and chemical purposes, for organizing a brick and peat company. It is clear, then, that in this they gave practical construction to the intent
I think the learned referee is also mistaken as to there being a de facto corporation created. In no one of the cases cited as authority has there been the omission to file certificates- of some kind, and of user on the part of the corporations under it. In such cases, where there has been user, defects in their organization do not relieve them from liability as to third-persons and to others who have given them credit. They are then as to such persons a corporation de facto; but as between themselves, all equally responsible for corporate vitality upon the performance of the act, which alone creates their existence, and without even an act of user, they become neither a corporation de jure nor de facto. It appears to me it is not only without precedent, but little less than absurd, to characterize such acts as sufficient to create a corporation even de facto. All the acts upon which this finding is based transpired three days before the signing of the articles, and must, in contemplation of law, have been understood by the parties as demanding a compliance with the statute, to create a corporation, and not that such acts, of themselves, constituted a -corporation, for the articles were handed over to be filed.
I have thus far treated this case as adopting the real findings of fact by the referee, and upon the assumption that all the rulings on the trial are without objection. If we are right in the views we have expressed, then the various rulings of the referee in admitting in evidence the paper.signed by the parties, as evidence of the incorporation in question, were error. Its admission was objected to on that ground, and the objection overruled and excep- " tion duly taken. The 9th section of the statute under which they proposed to organize, expressly provides what shall be the evidence of an incorporation under that act, and it provides no other, to wit: “ The copy of any eertifi
Bpsexraxs, J., concurred.
Bockes, J., expressed no opinion.
Judgment reversed.
Rosekrans, Potter and Bockes, Justices.]