132 Ala. 253 | Ala. | 1901
— “A corporation de facto exists, when from irregularity or defect in the organization or constitution, or from some omission to comply with the conditions precedent, a corporation de jure is npt created, but there has been a colorable compliance with the requirements of some law under which an association might be lawfully incorporated for the purposes and powers assumed, and a user of the rights claimed to be conferred by the law — -when there is an organization with color or law, and the exercise of corporate franchises.”—Snider v. Troy, 91 Ala. 224; Cen. Agr. & Mech. Asso. v. Ala. Gold Life Ins. Co., 70 Ala. 120.
“Corporations may exist either de jure or de facto. If of the latter class, they are under the protection of the same law, and governed by the same legal principles as those of the former, so long as the State acquiesces in their existence and exercise of corporate functions. A private citizen, whose rights are not invaded, who has no cause of complaint, has no right to inquire collaterally into the legality of its existence. This can only be done by a direct proceeding on the part of the State, from whom is derived the right to exist as a corporation, and whose authority is usurped.”— Ib.; Lehman v. Warner, 61 Ala. 455.
It is also well settled, as a corollary to the foregoing principles, that when one contracts with' a corporation, which is in the exercise of corporate functions, but which is a de facto corporation merely, he will not, in a suit by the corporation on a contract made by him with it in its corporate name, he allowed to deny and disprove the rightful ness of its existence.— 4 Am. & Eng. Ency. Law, 198; Smartwood v. Mich. A. L. R. Co., 24 Mich. 390. In the case last cited, Cooley, J., declares, that “it
The facts in this case, Avitliout conflict, shoAV that the defendants and a number of other persons, pursuing closely the provisions of the statute for the purpose (Code, Art. XI, p. 425), associated themselves together for the purpose of incorporating the Farmers’ Implement Company. They filed their declaration in the office of .the probate judge of Lauderdale county, in accordance Avith the provisions of section 1252 of the Code. This declaration AAras indorsed “Farmers’ Implement Co. Declaration.” “I hereby certify that the Avithin conA7eyance was filed in the office for record on the 5th
On tbe same day tbe declaration was filed, tbe judge, of probate issued to two of tbe proposed incorporators, a commission to open books of subscription to tbe capital stock of tbe corporation, as per section 1253 of tbe Code. Afterwards, tbe commissioners, acting under this commission, opened books of subscription, and more than 50 per cent of tbe capital stock was duly subscribed by parties deemed solvent, a list of whom was returned to tbe court, as a part of tbe report of the commissioners, and payments in money were made by each of the subscribers of at least 20 per cent, of tbe stock subscribed by them, respectively. Tbe subscribers met and organized the corporation by the election of a board of directors, a president, a secretary and general manager, and a treasurer, all of which was duly certified and returned in writing to tbe judge of probate, as provided by section 1255 of tbe Code. Tbe only missing links for tbe perfection of a corporation de jure under the statute, as appears, were, that these papers, so returned and filed with tbe probate judge, were never recorded in his office, and no certificate of incorporation was issued by said judge, declaring said corporation fully organized, as provided by said section 1255 of the Code. It is too plain for controversy, that a corporation do facto was thus created, there being no allegation or evidence of fraud on tbe part of defendants and associates
The evidence of plaintiff tended to show, that it had no actual notice of the incorporation of said company as a dc facto organization, even. Its secretary and treasurer, W. A. Steele, testified by deposition, that no member of the Farmers’ Implement Company ever informed the plaintiff that said Implement Company was a corporation; that plaintiff never heard'that it was such an organization, and that he thought that J. M. Lassiter, deceased, who was the secretary and managing agent of said Implement Company, informed the plaintiff by letter that defendants were members of a co-partnership by that name, though he could not find or produce said letter. The evidence does not show, however,even if
In the absence of an agreement to become partners in the company, defendants cannot be held liable as such, unless they hold themselves out as partners. Holding one’s self out, or permitting himself to be held out as a partner in a firm, will make him liable as such, to third persons AAdio have been misled by, or AAdio have acted upon such holding out; and in such case, the one so held out Avould be estopped, as to them to deny that he was a partner.—17 Am. & Eng. Ency. Law, 879; George on Part. p. 80; Marble v. Sypes, 82 Ala. 322; Ala. F. Co. v. Reynolds, 85 Ala. 19. As we have said, there is an entire absence of evidence tending to shoAV that defendants ever knowingly or intentionally entered into a partnership relation Avith their associates, or ever held themselves out as co-partners Avith them, or permitted any other person to do so.
The evidence sIioavs, furthermore, beyond conflict, that at the time the plaintiff’s contract with the Farmers’ Implement Company Aims entered into,—on the 2d July, 1898,—the papers above referred to, for the incorporation of said company, were on file in the office of the probate judge, having been filed therein, on the 5th of February, preceding, and remained there on file, until the 28th of October following, AAdien the judge of probate allowed J. M. Lassiter to take them away,—for what purpose is not shoAvn. The judge took the receipt of Lassiter for the papers, AAdiich receipt the judge himself wrote or dictated, reciting what papers they were,
The plaintiff, at the time it contracted with said association had thus, constructive notice of what was done towards the incorporation of the company, and that it had, at least, a de facto existence, which status was unaffected by the action of said Lassiter, in taking said papers from the probate office.
The fact that the Farmers’ Implement Company had not, at the time it purchased the goods from plaintiff, paid the state and county license to do business, could not affect the status of the de facto corporation differently from Avhat it would have affected a de jure corporation. The only possible effect such failure could have, would have been to render the company liable to the penalty prescribed by statute in such cases.
It is contended, again, that the failure to pay the fee prescribed by section 1287 of the Code, rendered the effort at incorporation abortive, and that the company, in consequence, did not have a de facto existence, even. In the Christian & Craft Grocery Co. v. Fruitdale L. Co., 121 Ala. 340, Ave held, that if a commission is issued to a corporation organized under the statutes, the fact that the required fee Avas not paid, Avould not, of itself, prevent the corporation from having a de facto existence; but its contract as stated, Avould be void. The statute under AA’hich that decision aauis made (Acts, 1894-95, p. 1024), proAdded that all contracts by any corporation Avhich had not first complied Avith the requirement for the payment of this fee, should be wholly void. That provision Avas not carried into the Code of 1896, but Avas omitted therefrom—section 1287. Without reference to that fact, however, the failure to pay the fee, would not, as stated, of itself have prevented the formation of a de facto corporation. If they never intended, and did not agree to become partners, but desired in good faith to organize under the statute a corporation, which they failed to fully perfect ,but did organize one de facto, under color of law, which came into the exercise of corporate functions, the stockholders of such
Under the pleadings, and the legal evidence as developed on the trial, the court, in trying the case without a jury, very properly, as we think, found in favor of the defendants, and rendered judgment accordingly.
Affirmed.