61 N.Y.S. 98 | N.Y. App. Div. | 1899
The appellant, who, from tne commencement of this action, has .apparently; been'the; ;party more dire.eM'y interpst^d [than either of ■his co:defendants ,‘in defeating, the plain tiff’shught to recover,, rests .his defense upon four distinct propositions, viz.:
-■ (1) That the plaintiff, never having been duly organized as a corporation in pursuance of the requirements of chapter 611 of the Laws of 1875, has no legal existence, .and 'consequently no capacity to sue;
■ .• (2) That its corporate existence, if any was ever acquired, has- terminated in consequence of the abandonment of the enterprise for which it was created; by the failure of its officers and stockholders to hold meetings ; by the sale of all its tangible property under execution, and by the non-user of its corporate franchises ;
(3) That.'the plaintiff never acquired, any,•rig-fft,title,-or interest in :or to the spring which .is;'the subject-matter of .'this{litigation* nor in or to any lease of -the premises upon which the same is located; and
(4) That,even though the plaintiff may have acquired-such rights as were,i gran ted by the-lease; in,;-questió.n .to tj-ie original. lessees, it did not acquire any right to the mineral water flowing from the well' upon the leased premises which, it seems, has proved to be of considerable value. ,
In order to determine what force, if any, there is in these .various
It appears that in the.,year 1885 the appellant, Stephen Coursey,, was the owner of an undivided interest in .the premisesdn question,, and that on or about the first day of December of that year he executed and delivered a lease of the entire premises, “for the purpose of mining, boring for oil and other minerals, for the term of twenty years or as long as found in paying quantities.”
This lease ran to the lessor, Stephen Coursey, as one of the lessees,, and to A. J. Eshenour and Charles A. Steele, as co-lessees, and it. provided that in case gas should be found in paying quantities, and the lessees should desire to convey the same to villages and towns-for heating and illuminating purposes, they should pay the lessor for each well used for that purpose.
After the execution and delivery of this lease the lessees therein named obtained subscriptions from various persons and in various sums, amounting in the aggregate- to about $2,500, for the purpose of drilling a well upon the leased premises and prospecting for oil oi-gas ; and shortly thereafter a contract was entered into between, one A. D. Branch and the lessees for drilling, a well upon the leased premises, and such well was thereupon drilled and the expense the'reof was paid by the appellant, Stephen Coursey, from moneys received from the several subscribers.
After proceeding to a certain depth a.vein of water was struck which, upon careful analysis, was found to possess valuable medicinal properties, and the parties interested in the well thereupon considered the advisability of suspending their effort to obtain either gas- or oil and utilizing this mineral water as an article of commerce. To this end an, assessment, of twelve per cent upon the amounts subscribed was made and the same was paid by the various' subscribers-to the appellant Coursey, as treasurer of the fund. A meeting of the subscribers ¡was .thereafter■ called and steps were taken to form a corporation -for the -purpose of securing and selling the mineral water obtained from the well, and it was thereupon understood and agreed by the lessees, Eshenour, Steele and Coursey, that in the event such corporation was formed, the lease of the lands and premises from which the mineral water was obtained should belong to-
Immediately upon completing its incorporation the plaintiff took possession of the land and "premises upon'which the well was located and also of the various improvements which had been made thereon,' and proceeded to conduct the business of securing and selling the water obtained from the well and of furnishing facilities for bathing therein; and to that end if érected a bath house and expended 'considerable sums of money in other improvements and in advertising and introducing its water tó' the public, and this business was" thus carried on until the month of December, 1889, the same being conducted mainly by the' appellant1; Ooursey as- treasurer, and Charles A. Steele as president of the corporation.
On the 19th day of December, 1889, the appellant served a written notice upon Steele, requiring him to deliver up possession of the premises in question, and subsequently he took possession thereof and •of all the property and improvements thereon and-assumed absolute •control over the same. Thereafter, and on or about the 3d day of •October, 1892, he executed to one Calvin E. Linch, for the term of twenty-five years, a lease of these same premises in which he reserved to himself the annual rental of $'6,000 and a royalty of one cent for •each gallon of water drawn from the spring and shipped from the village of Geneva and five cents for each bath given therein fin the village of Geneva. The appellant’s wife joined in this lease, and the same was executed and acknowledged without the consent of the plaintiff. Linch went into the immediate possession and occupancy of the lands and premises covered by the lease and disposed •of the waters taken from the well, paying to Coursey and his wife the rents and royalty reserved to them in the lease until on or about the 10th day of January, 1894, when, with the consent of Coursey ¡and his wife, he assigned and transferred such lease to the defendant Edward H. Quantin. _ At about the time of the assignment of the lease by Linch to Quantin, the defendant, The Geneva Mineral Water Company, was incorporated under the laws of this State, the object of such incorporation, as stated in the certificate thereof,
"Immediately upon the executiozz of such lease the Geneva Mineral Water Company entered upon and took possession of all the propefity covered thereby and ever since has been and is now disposing of the watez’s from the well, realizing large profits therefrom, from which the z*ents and royalties reserved in the lease have been paid over to the lessors in accordance with its terms and requirements.
The foregoing stateznent of facts embraces the znain features of." the case, although there are znany other circuznstances revealed by the record vdzich possess more or less significance and to some of these refez-enee will be made later on. We think, lzowevez*, that sufficient already appears to negative the appellant’s first proposition, that the plaintiff never had any coz-pozute existeizce, for the steps taken to accoznplish that result certainly appear to have beezz, l'n strict accord with the requirements of the statute,, and the undisputed evidence tends to show' that not only ten per cent but the éntire amount of the plaintiff’s capital stock was actually paid in. It is true that all but $500 thereof had been received from the subscriptions and expended in developing the well pzior to the filing of the articles of association ; but the plaintiff had the, benefit of such expezidituz-e and would doubtless have used wbatevez1 might have been realized upon a sale of its capital stock for the same puz’pose if the work of developznent had not already been pez-forzned. Bzzt even if it could be said that there had not béezz a stzict compliazzce with all the requirements "of the statute, .we do not see how that fact would be available to the appellant asa defense to this action, for he
For much the same reason we think the appellant has estopped himself from asserting that whatever corporate life the plaintiff once possessed has been lost by the failure to exercise its corporate functions, or by a sale of all of its tangible property. In saying this it may be assumed that the reasons urged by the appellant in support of his contention actually existed; that for a long period of time the plaintiff did omit, for some reason, to make use of its corporate franchise; that from the latter part of 1886 until some time in 1894 no meetings of either directors or stockholders were held ; that no reports were made and no officers elected. Moreover, that in 1887 all the tangible property of the plaintiff was sold upon execution ; and yet either or all of these facts did not necessarily work a dissolution of its corporate existence, for having once been legally created, it cannot cease to exist of its own volition, neither-can its life be destroyed by the acts or omissions of one or all of its officers. Its functions may be suspended,' and so far as accomplishing that for which it was created is concerned, it may become dormant; but in the absence of some express statutory provision its life continues until either its charter period has expired or the court has decreed a dissolution. (Brooklyn Steam T. Co. v. City of Brooklyn, 78 N. Y. 524, 529; People v. Ballard, 134 id. 269; People v. Twaddell, 18 Hun, 427; Ang. & Ames Corp. §§ 138, 771.)
But even were this not the rule, the appellant, as has already been suggested, is in no situation to insist that the plaintiff is no longer a legal entity; for notwithstanding its failure to.elect officers, or make reports, or hold meetings, it was during this long period of inactivity transacting more or less business with the knowledge, consent and privity of the appellant.
In the conduct of its business it advertised the waters obtained
Furthermore, during this entire period of time, the appellant acted as secretary or treasurer of the plaintiff. On the 8th day of November, 1887, as such treasurer, he verified an answer in an action brought against the corporation, which admitted that the defendant therein (this plaintiff) was a domestic corporation. On the sixth' day of October in the same year he united with Steele in a written consent that the corporation might mortgage its real and personal estate to secure himself and Steele for the sum of about $1,600 advanced by them to the corporation, and • thereafter, as treasurer, joined in the execution of such a mortgage; and the evidence tends to show, and is sufficient to support a finding to that effect, that the property of the corporation was sold upon an execution in furtherance of a scheme to which both Steele and Coursey were parties; that in pursuance of this scheme it was purchased by Mrs. Steele, to whom the money was furnished for that purpose by Coursey, and that the business was thereafter carried on in the manner heretofore described, with his knowledge and approval.
There is also some evidence tending to prove that during this same period an assessment was made upon the plaintiff’s stockholders of fifty per cent, and that this assessment was paid by a portion, at least, of the stockholder one or more of whom paid his assessment to the appellant. Thusitwill.be seen that in various ways and at different times the appellant was by his acts and declarations admitting and asserting that the plaintiff was a duly organized and living corporation ; and this being so he ought not now to be permitted to dispute that fact. (Phœnix W. Co. v. Badger, 67 N. Y. 294; Commercial Bank of Keokuk v. Pfeiffer, 108 id. 242.)
It is insisted, however, that, even conceding the validity of' the plaintiff’s incorporation and that its right to exercise its corporate functions had not terminated, the plaintiff ought not to. maintain
In the second place, the transfer or assignment to the plaintiff of whatever rights or interests the lessees mentioned in the lease obtained by virtue of that instrument, although by parol, was fully executed by the plaintiff’s entering into the possession of the demised premises and using them for the purpose and in the manner contemplated by the lease, with the knowledge and consent of the lessor, who, in his dual capacity of lessor and lessee, not only impliedly assented to the transfer, but was also quite ready, apparently,- to-receive any benefit which might result from the assignee’s operas tions and explorations for subterranean products. In these circumstances it is extremely doubtful whether the defense now sought to be interposed would be available had it been pleaded. (Tallman v. Earle, 13 N. Y. Supp. 805, and cases cited; Sherman v. Engel, 18 Misc. Rep. 484.)
But even if it be admitted that the appellant’s contention, that an assignment of the lease could not, within the Statute of Frauds, be effected by parol, is well founded, as to which there is, perhaps, some doubt (Fryer v. Rockefeller, 63 N. Y. 268; Currier v. Howard, 14 Gray, 511), he should not be allowed, under the circumstances of this case, to invoke the statute to aid him in perpetrating a fraud, as certainly would be the case if, after uniting in the effort made to accomplish the plaintiff’s incorporation and then consenting that it might take his place and that of his co-lessees in developing the well, he is permitted to assert that the assignment is invalid. (Wood v. Rabe, 96 N. Y. 414.)
The learned counsel for the appellant has elaborated his fourth proposition with much care and argues at great length that, inasmuch as the water is not a mineral, the right conferred by the lease in question is- simply the right to mine or bore for oil, gas or “ other minerals,” and that .these words should receive a technical and restricted interpretation, and riot one which would include mineral water.' "This contention is amply fortified by authorities and citations which would be entitled to much more serious consideration if the appellant himself had -not given a practical construction to the language of the lease and one which is quite the reverse of that contended for by his counsel.
In the certificate, which was the initial step taken to secure the incorporation of the plaintiff, the object and nature of the business for which such incorporation was sought were stated to be: “ For bottling and selling natural mineral waters, and for the purpose of accumulating, storing, conducting, selling, furnishing and supplying water for mining, domestic, manufacturing, municipal and agricultural purposes, and for the purpose of furnishing water for bathing and for curative purposes, and for drinking as a beverage and for medicine and for all medicinal purposes.”
This certificate was signed by all three of the parties to the lease, and at the time it was so signed and filed in the office of the Secretary of State the well had been drilled, and it had been ascertained by careful experiment and use that the waters thereof possessed valuable curative properties; and without doubt it was to reap such commercial benefit as might accrue from their sale and ■consumption that incorporation was sought. This certainly was tantamount to an understanding and admission upon the part of the appellant that the lease, which, as we have seen, formed the basis of and constituted the Only inducement for the plaintiff’s incorporation, included within its terms mineral water as well as the substances
It is further claimed by the appellant that the learned referee erred in finding that the appellant should account to the plaintiff for five-sixths of t-h.e rents and royalties received by him under his lease to Calvin E. Linch and the Geneva Mineral Water Company, inasmuch as at the time of the execution of the lease which is the subject-matter of this action he was the owner of but eleven-eighteenths of the property embraced therein. It will be seen, however, by reference to that instrument that the appellant assumed to lease all the premises mentioned therein and described as “ Coursey’s mill lot.” What the exact interest of the lessor in those premises was at the time is not stated in the lease ; but it does appear by his own admission that at the time of the trial he was the owner of an undivided five-sixths interest therein, and inasmuch as the demise was without words of restriction as to the lessor’s interest or title, we think that, within well-settled principles, it must be regarded as embracing whatever interest he then had or might thereafter acquire in the demised premises. (Jackson v. Murray, 12 Johns. 201; French v. Spencer, 21 How. [U. S.] 228, 240; Tefft v. Munson, 57 N. Y. 97; Austin v. Ahearne, 61 id. 6; Badger v. Holmes, 6 Gray, 118.)
The counsel upon either side of this case have been unsparing in their criticism of the evidence of the adverse party, and it is impossible to read the evidence contained in the record without reaching the conclusion that such criticism is quite justifiable. Indeed, the case is so'full of contradictions and equivocations that a mere casual examination thereof forces upon the mind the conviction that the principal witnesses were influenced in their testimony more by a desire to advance their individual interests than to adhere to a truthful narration of the facts and circumstances which they assumed to detail. As a consequence the evidence before us is not only conflicting as between parties, but that of- each of the principal witnesses is in direct conflict with evidence relating to the same subject given by himself on some former occasion. The case, therefore, is, at best, a doubtful one and it is, consequently, one in which this court will not assume the place of referee and determine upon eon
We conclude, therefore, that the judgment appealed from should be affirmed.
All. concurred.
Judgment affirmed, with costs.