24 Barb. 395 | N.Y. Sup. Ct. | 1855
The demurrer is only to the first cause or ground of action alleged in the complaint, which is, that the Utica Insurance Company never became a valid corporation for any of the purposes of the organization, by reason of an omission on the part of the associates to comply with the precedent requirements of the statute; also by reason of an alleged fraud practiced upon the persons appointed by the comptroller to examine and ascertain whether the company was in possession of the engagements for insurance, to the full extent required by the act under which the company assumed to organize; and also by reason of an alleged defect and insufficiency in the certificate required to be given by the examiners, preliminary to the commencement of business by the corporation. The relief asked upon this branch of the case is that it be adjudged that the association was never organized as a mutual insurance company, and that the premium notes given upon insurance effected with the company are therefore void. I assume, as it is assumed by the defendant in terms by his demurrer, and by the argument of his counsel, that the plaintiffs did insure with the Utica Insurance Company after the commencement of its business upon the plan of mutual insurance, and gave their notes for
It may be assumed that whatever the alleged corporation wmuld have to prove, in an action brought by it, upon the issue of mil tiel corporation, may be controverted in an action brought against the corporation for relief based upon the corresponding allegation that no such corporation ever existed, and I am of opinion that beyond this the party contesting the corporate existence of the company cannot go. 'All that the corporation is called upon to prove, to establish its existence, in a litigation with individuals dealing with it, is its charter and user under it. (McFarlan v. The Triton Ins. Co. 4 Denio, 392. Utica Ins. Co. v. Tilman, 1 Wend. 555.)' In The Fire Department of N. Y. v. Kip, 10 Wend. 266,) Savage, Oh. J., says: “ That the plaintiffs are a corporation, was proved by the production of the statute declaring them to be so. This case, in that respect, is different from those corporations created by statute, and to become entitled to corporate powers by something to be done in futuro. In such cases we have held that at least proof of user under the charter shall be produced.” (See also U. S. Bank v. Stearns, 12 Wend. 314; Williams v. Bank of Michigan, 7 Wend. 539.) There is a class of cases reported in actions brought against corporators upon subscriptions to the capital stock of the company, or agreements entered into preparatory and preliminary to the perfect incorporation or organization of the association, and which are therefore necessarily conditional, depending for their validity, upon the completion of the organization according to the terms of the statute incorporating or authorizing the incorporation of the company. This condition is implied, in the undertaking, and is as much a part of it as if expressed in terms. Such are the cases of
It is said that fraud vitiates every, even the most solemn acts, and this is true as well of judicial and legislative acts, as acts inter partes. But it does not follow that every individual may assert fraud with a view to impeach the validity of every public act. So far as the fraud alleged affects the validity and legal existence of the supposed corporation, it concerns the public interests, as it relates to and affects the validity of the contract between the public and the associates, or the power which the latter claim to have acquired under the laws ; and the people, or some one having by law authority to represent them, can alone investigate the fraud, and ask that the charter may be annulled or adjudged never to have had an existence. So far as the fraud alleged has wrought an injury to individuals, beyond that which has been sustained by the public at large, to that extent they may have relief. If parties have been induced to enter into contracts of insurance upon a fraudulent representation of the agents and officers of the company in regard to its capital or pecuniary resources and ability, or any other matter which righfully influenced them in the negotiation, they may be relieved against their contracts ; but as it is not necessary for their protection to go beyond that and declare the non-existence, for any purpose, of the. corporation, it should not be done. Perhaps the facts will warrant an amendment of the complaint, so as to entitle the plaintiffs to this relief. (See per Bronson, Ch. J., 4 Denio, 397.)
The only remaining question is whether the plaintiffs have shown the Utica Insurance Company acting under a charter or an authority apparently valid, and really so, unless impeached by something outside of the record evidence of the corporate existence, and depending upon proof aliunde. If they have, and have thus furnished prima facie evidence of the incorporation, they cannot go behind that evidence to show that it was got up in fraud or mistake, or irregularly brought into existence. The decision of this question depends upon the true construction of the act under which the company undertook
The plaintiffs are not entitled to the relief asked upon' the first cause of action, on the facts alleged, and the demurrer must be allowed, with leave to the plaintiffs to amend, on payment of costs.
W. F. Allen, Justice.]