58 So. 90 | Ala. Ct. App. | 1912
Lead Opinion
By the judgment appealed from the appellants I). R. Peteet and F. S. Stone were held individually liable for a debt to the appellee which was contracted in the name of the Magnolia Shingle Company. By different counts of the complaint, as it was amended, their individual liability for that debt was sought to be shown by averments that at the time the account sued on was made they “were partners in the Magnolia Shingle Company, unincorporated,” and that at that time they “were members of the Magnolia Shingle Company, unincorporated.” The proof was as to a
The evidence furnishes no support for a claim that either of the appellants ever actually agreed or consented to be a member of a partnership conducted under the firm name' of Magnolia. Shingle Company, or that the appellee, in extending credit to the concern doing business under that name, was misled into doing so by conduct or declarations of either of the appellants which amounted to a representation that he was a partner in it. In other words, under the evidence, the apj pellants could not be held liable as partners for the debt sued on upon either of the grounds that they were actually partners in the concern to which the goods were furnished, or that, as to the appellee, they had estopped themselves to deny that they were partners in that business by permitting themselves to be held out as such.—Alexander v. Handley, Reeves & Co., 96 Ala. 220, 11 South. 390. Instead of the evidence disclosing the existence of such a ground of estoppel against the appellants, on the contrary, it shows that the goods for the balance of the price of which the suit was brought were furnished by the appellee-on orders given in the name of the Magnolia Shingle Company which were written on sheets of paper at the top of which were the words, “Magnolia Shingle Company (Incorporated). Capital Stock $10,000.” There was no evidence that, when the appellee extended the credit, it relied on any representation, or had any knowledge or information, as to the party whose orders were filled, except such as was afforded by the description of that party which constituted the heading of each of the written orders that was
There are decisions in other jurisdictions to the effect that the benefit of the rule of estoppel, recognized in the cases just cited, against one who has dealt with a party as an existing corporation, cannot he claimed by one who actively participated in the contracting of the debt sued on in the name of a pretended corporation,, with which he claimed to be related merely as a stockholder, but which he then knew had no real existence as a corporation. We are not of opinion that the facts of this case bring it within' the influence of those decisions. From the argument submitted on this hearing, we infer that the case of Harrill v. Davis, 168 Fed. 187, 94 C. C. A. 47, 22 L. R. A. (N. S.) 1153, was relied on for the exposition of the rules of law which were supposed to have the effect of precluding the appellants from sustaining the claim that the appellee is estopped from proceeding against them individually for the debt contracted in the name of the Magnolia Shingle Company. In that case it appeared that the persons who were held individually liable for debts contracted in the name of the “Coweta Cotton and Milling Company” actively par
The question then arises whether the facts of this case bring it within the influence of such rulings as that in the case of Harrill v. Davis, supra, or show that the appellants by their conduct or declarations have precluded hemselves from claiming the benefit of the estoppel upon the appellee resulting from its dealings Avith the Magnolia Shingle Company as a corporation. The-appellants participated with other persons in proceedings looking to the incorporation of the Magnolia Shingle Company as a private corporation under the general law of this state on that subject. Incorporation papers-were drawn by the appellant Stone, who was a practicing lawyer. These papers were in proper form, were duly executed by all persons participating in the proposed organization, and it is not suggested that there was any failure by them to- do anything required by the' law for the effectual creation of a private corporation,, except a failure at that time to file the certificate of in
On the contrary, the only legitimate inference from the evidence was that the appellee dealt with the Magnolia Shingle Company as a corporation, .that it was not led to do so by any fraud or misconduct on the part of the appellees or either of them, and that it did not suppose that the transaction had the effect of imposing any individual liability upon the appellants or any of them. In fact, exemption from individual liability was an element of the contract actually made.—Snider’s Sons’ Co. v. Troy, 91 Ala. 224, 8 South. 658, 11 L. R. A. 515, 24 Am. St. Rep. 887.
This being true, the result of the perfecting of the corporate organization by the filing of the incorporation papers and the payment of the statutory charges, followed by the formal recognition and ratification of the obligation sued on, gave full legal validity to the only liability which the appellee could have supposed would inure in its favor when it shipped the goods to the Magnolia Shingle Company, and removed all basis for a claim on its part that that liability should be shifted upon the individuals now sought to be charged. Allegations of the complaint to the effect that the contract sued on was made by a partnership of which the defend
From the above expressed views, the conclusion follows that the court below was in error in giving the affirmative charge requested by the plaintiff. It was also in error in ruling out the evidence offered tending to show the ratification by the corporation, after its organization was legally perfected, of the contract made in its name with the appellee, and for a purpose within the' scope of its previously attempted creation.—Davis Bros. v. Montgomery Furnace & Chemical Co., 101 Ala. 127, 8 South. 496. With that evidence admitted as it should have been, the defendants were entitled to the general affirmative charge requested in their behalf.
Reversed and remanded.
Rehearing
In Response to Application for a Rehearing.
It is. insisted by the counsel for the appellee (the plaintiff), in the brief filed in support of the application for a rehearing, that the conclusion announced in the foregoing opinion was unwarranted under the pleadings in the case, because of the failure of the individual defendants to set up by special plea an estoppel upon the plaintiff to deny that it dealt with the Magnolia Shingle Company as a corporation. We cannot concur in this view. While attention was called in the opinion to the fact that, under the evidence in the case, instead of the individual defendants being es-topped to deny that they were liable for the price or value of the goods sold to the Magnolia Shingle Company, the plaintiff was estopped to deny the de facto corporate existence of that company by dealing with it
Application for rehearing overruled.