118 Ky. 791 | Ky. Ct. App. | 1904
Opinion op the court by
Reversing.
On August 5, 1902, the Commonwealth filed this petition ordinary in the Campbell circuit court against the Licking Valley Building Association No. 3, to recover of it the organization tax of one-tenth of 1 per cent, on each $100 of the capital stock of the company, alleging that the association is a corporation created under the laws of this State; that its principal place of business is in the city of Newport, Campbell county; that it has an authorized capital stock of $1,000,000, divided into 1,500 shares of $500 each, and 1,000 half shares of $250 each; that it has failed and refused to pay into the State treasury one-tenth of 1 per cent, of the amount of the capital stock which it was authorized to have; and that this was due to the State upon the filing-of its articles of incorporation on April 19, 1897. Judgment was prayed against the defendant for $1,000, and also for a penalty of 20 per cent, thereon, and costs. The defendant demurred' to the petition, and its demurrer was overruled. It thereupon filed
The original articles of incorporation and the amended articles were filed with the pleading. By the original articles the association was formed with a capital stock not to exceed $1,000,000, or 2,000 shares of the par value of $500 each. The association commenced business on May 3, 1886, and endured for twenty-five years, terminating on May 3, 1911. It could not incur an indebtedness exceeding $25,000. By the amended articles of incorporation it is stipulated that the Licking Valley Building Association No. 3, of Newport, Campbell county, Ky., a corporation created by and
The plaintiff demurred to the answer. The court overruled the demurrer, and, the plaintiff declining to plead further, its petition was dismissed.
The suit was filed under section 4225, Kentucky Statutes,
Section 542, Kentucky Statutes, 1903, regulating private corporations, is as follows: “When the articles are filed and recorded as provided, and the license tax imposed is paid to the State, the corporation shall be deemed to be organized for the purpose of transacting, promoting or carrying on the business or purpose for which it was created; and shall thereupon become a body corporate, and be known by its corporate name, and as such may adopt and use a corporate seal, and shall have power to sue and be sued, to contract and be contracted with, to pledge or mortgage its property, real or personal, to secure the fulfillment of its contracts, appoint, remove and elect officers, define their .duties, and require from any of them a bond for the faithful discharge of their duties, to prescribe by its board of directors by-laws for the government of the corporation not inconsistent with law, and to exercise, subject to law, such powers as may be necessary to conduct the business or promote and carry on the objects and purposes for which it was organized.”
It is insisted for *he appellee that a pleading must be taken most strorigly against the pleader, and that appellant has wholly failed to make a sufficient legal showing that appel
In this connection • section 554, Kentucky Statutes, 1903, Is relied on. That section is as follows: “Any corporation •created by, and existing under the laws of this State, may •organize under the provisions of this chapter by executing and recording, as provided, articles of incorporation; and when the requirements of this chapter, and other laws relating to ity are complied with, it may commence business, and become a corporation under this chapter, and thereupon all business effects, assets and property, real and personal, of such corporation shall be vested in, and become, without deed or transfer, the property of the new corporation, subject to all liabilities existing against the corporation, its officers or stockholders, at the time of reorganization.”
Section 5G6, Kentucky Statutes, 1903, is as follows: “No corporation organized under this chapter shall be permitted -to set up or rely upon the want of legal organization as a
It is alleged in the plaintiff’s petition that the association Is a corporation created under the laws of this State, and that it filed its articles of incorporation on May 19, 1897. The corporation is not permitted to set up the want of legal organization, and therefore it was unnecessary to allege in the petition facts showing that it had complied with the requirements of the statute. The simple allegation that it is a corporation created under the laws of this State is, under the statute above referred to, sufficient. It is true the act is not retroactive, but it applies to .all corporations formed after it took effect, and section 4225, Kentucky Statutes, has been in force since November 11, 1892. Although the corporation could not legally do business until it paid its organization tax it is none the less liable for the organization tax when it proceeds without paying, because it is not allowed to set up, in defense of the suit against it, its own failure to comply with the statute. The original and amended articles of incorporation were filed with the amended answer of the defendant, and, while an exhibit will not make a bad pleading good, an exhibit will be considered by the court against the pleader when it is filed by him. We must therefore construe these articles of incorporation in determining whether the demurrer to the amended answer should have been sustained.
The amended articles of incorporation did more than conform to the new statute. They created a new corporation. The old corporation would have expired on May 19, 1911. The new corporation runs for twenty-five years from April 19, 1897, and may then be renewed for a like term from time
By section 4225, Kentucky Statutes, 1903, every corporation which may be incorporated under the laws of the State, having a capital stock divided into shares, must pay into the State treasury one-tenth of 1 per cent, upon the amount of the capital stock which the corporation is authorized to have. The fact that the building and loan association does not sell its stock, as other corporations, is immaterial. By the express terms of the statute it must pay the tax upon the stock which it is authorized to have. The purpose of the statute is not only to raise revenue, but to prevent stocks being watered, or fictitious stocks being issued or put on the market; and we are not at liberty to make an exception to the statute where it makes none.
Judgment reversed, and cause remanded, with directions to the circuit court to sustain the plaintiff’s demurrer to the answer of the defendant, and for further proceedings consistent herewith.