Ragland v. Doolittle

| Miss. | Oct 15, 1911

Mates, C. J.

delivered the opinion of the court.

Under section 930; Code of • 1906, under the chapter dealing with corporations, it is provided that: “Every corporation organized under this chapter shall, within thirty days after such organization, make report thereof to the secretary of state, who is required to furnish blank forms for that purpose as provided for in the next section. The secretary of state shall enter each .report and index the same in the record to be kept in his office for that purpose. Should such report be not made within the time required, the charter granted shall be null and void, and all persons doing business thereunder shall be deemed and held to be partners in the business and liable as such.” Now the record in this case shows that some time in September, 1909, D. L. Ragland, W. D. Mc~ Raven, and W. A. Brown procured a charter from the slate and undertook to organize a corporation to be called the Newton Lumber & Manufacturing Company. It is beyond doubt that the organizers of this corporation failed to comply with section 930. Soon after procuring this charter, they organized and commenced to do business, but did not make report to the secretary of state, as the above-quoted statute commands. There is some little effort made by the testimony to show that the organization and report was in fact made, though not received by the secretary of state. We hardly think the proof is sufficient to establish this; but, if it did, it would not suffice, since there must be a compliance with the statute, and not an attempt to comply. The incorporators must see that the report is received as required by the statute.

While so engaged in business, and before the filing of' the report, they bought from R. W. Doolittle a quantity of logs, amounting in value to eight hundred eighty-six dollars and eighty-five cents. All of these logs are shown to have been purchased between November 1, 1910; and December 5th of the same year. On the 7th day of December, 1910, and after incurring the above indebtedness, tbe incorporators undertook to comply with the statute, and made the following report to the secretary of state, viz.:

“Newton Lumber & Manufacturing Company. Organization Report. The Newton Lumber & Manufacturing Company, which was incorporated on the 7th day of Sept., 1909', was organized on the 7th day of Dee., 1910, at Newton, in the county of Newton, by the election of D-. L. Ragland, W. D. McRaven, and W. A. Brown as directors, who elected the following officers to serve for one year, to wit: D. L. Ragland, President; W. D. McRaven, Vice President; W. A. Brown, Secy. & Mgr. The postoffice of the president is Newton, Miss. The post-office address <}f the secretary is Newton, Miss. I, D. L. Ragland, was elected president of the Newton Lumber & Mfg. Co., on the 7th day of Dec., 1910', do hereby certify that the foregoing report of the organization of said company is correct and true.

“D. L. Ragland, President.

“W. A. Brown, Secretary.

“Filed December 20th, 1910.

“J. W. Power, Secy, of State.

“State of Mississippi, Office of Secretary of State, Jackson: I, Joseph W. Power, Secretary of the State' of Mississippi, do hereby certify that the above and foregoing is a true and correct copy of the original of the report of organization of Newton Lumber & Mfg. Co., as filed in this office on December 20, 1910', and recorded in Book 1, page 231, of the records of organization of corporations; and I do further certify that said report is the only report of organization of said Newton Lumber & Mfg. Co. filed by me, as shown by the records. "Witness my hand and the great seal of the- state of Mississippi, this February 17, 1911.

“ Joseph W. Power

“[Seal.] Secretary of State.”

When the above report was made, it is seen that the incorporators had organized and had been doing business for many months before the report was made. Under such circumstances the statute declares, not only that the charter previously granted is null and void, but that the persons doing business thereunder shall be held to be partners, and be liable as such. Under the facts of this case,' there is no escape from the liability fixed by the statute on those who organize and undertake to conduct business in violation of its requirements.

The proof offered to show the failure to comply with the statute- is competent, and the only method of proof that appellees could adopt.

It is, however, insisted by counsel for appellant that the creditors are estopped from asserting liability on the part of the organizers as partners, because it is asserted that the creditors dealt with them as a corporation, and cannot now deny it. If such contention could avail, it would nullify the statute. When the purchase of these logs was made, the organizers incurred such liability as to payment as was imposed by law. The statute says, under such circumstances, “the charter granted shall be null and void, and all persons doing business thereunder shall be deemed and held to be partners in the business and liable as such.”

The law is so written, and the facts bring the appellants literally within its terms. Affirmed.