133 Mo. App. 482 | Mo. Ct. App. | 1908
The plaintiff as a corporation brought this suit against defendants A. P. Nelson, J. D. Thatcher, George Brant and Wm. P. Cole, copartners doing business under the firm name and style of The Brant Independent Mining Company. The plaintiff is engaged in the business of publishing a newspaper in Kansas City, Missouri. The claim against the defendants is for $299.46 charged for inserting in the plaintiff’s paper the prospectus of The Brant Independent Mining-Company. This prospectus purports to have been signed by defendant W. P. Cole, fiscal agent.
A trial was had in the justice’s court which resulted in a judgment for the plaintiff for the full amount of the claim. Before the trial in the circuit court the appealing defendants filed an affidavit purporting to deny that they were partners, but as it was afterwards admitted by both plaintiff and defendant that The Brant Independent Mining Company was a mining corporation organized under the laws of Arizona, but not authorized to do business in this State, the necessity for such affidavit was dispensed with.
There was no question as to the correctness of plaintiff’s demand, and the only question for us to decide is whether the defendants were liable as partners being members of the corporation. The capital stock of said corporation was five million dollars, of the par value of one dollar per share. Of this amount only about $500 had been paid although the prospectus stated that all had been paid. The defendant Cole was the promoter of the company and was selling the stock, and the other defendants were holding themselves out as officers of the company. From the prospectus, we
It is the contention of plaintiff that the defendants are liable as partners under section 1025, Revised Statutes 1899, as amended by laws of 1903, pages 122-3, as follows: “Provided further, that the Secretary of State shall not license any foreign corporation to do business in Missouri when it shall appear that such corporation was organized under the laws of a foreign State by citizens and residents of Missouri for the purpose of avoiding the laws of this State, as it would be a fraud upon the laAVS of both States, and its pretended incorporators would be held as partners, and as such become liable for the debts of the alleged corporation.” It will be observed that the corporation does not come within the description referred to in the section, as its pretended purpose was not to do business in the State of Missouri, but in the State of Colorado. However, if the law of Colorado is the same as that of Missouri, the corporation was a fraud upon the laws of both that State and the State of Arizona, This presents a different case from that of Cleaton v. Emery, 49 Mo. App. 345, wherein it is held that the corporation was a fraud upon the laws of the State of Kansas where it was chartered and upon the State of Missouri wherein its business was carried on. This case therefore does not depend upon a construction of the Missouri statute, supra. We, therefore, agree with the contention of the defendants as to that Anew of the case.
Under the circumstances, we are constrained to
In Hyatt v. Van Riper, 105 Mo. App. 644, we approved the law as found in Beach on Private Corporations, “Individuals composing an incorporated company may render themselves personally liable to its creditors by their acts, defaults and representations, such for example as representing the company to be solvent when they have knowledge to the contrary, permitting their assets to be wasted, or using their corporate existence as a cloak for the prosecution of an illegal business.’” Or, as stated by Story, “And where the conduct of the parties operates as a fraud or deceit upon third parties,
The judgment of the court is affirmed.