61 Pa. Super. 301 | Pa. Super. Ct. | 1915
Opinion by
1. Objection is nrgecl that the corporation for which the plaintiff as receiver brings this suit had failed to record its charter as provided by law and that at the times the transactions involved in this suit took place the corporation was not legally chartered and therefore incapable of maintaining this action. It is true the Act of April 29, 1874, P. L. 73 (76), provides for the recording of the certificate of incorporation in the recorder’s office of the county where the chief operations of the company are to be carried on and “from thenceforth the subscribers thereto and their associates and successors, shall be a corporation, for the purposes and upon the terms named in the said charter.” When this condition precedent is not complied with the subscribers conducting the business are liable as partners: Tonge v. Item Pub. Co., 244 Pa. 417. It has however been determined beyond question in this State that the existence of a corporation or its right to exercise its corporate franchises cannot be inquired into or attacked collaterally: Commonwealth v. Monongahela Bridge Co., 216 Pa. 108; Monongahela Bridge Co. v. Traction Co., 196 Pa. 25; P. & L. Dig. Vol. III, 4860. The things necessary to the existence of a de facto corporation are present in this case, (1) a law under which it is alleged to have been created; (2) an attempt to organize under the law; and (3) assumption and exercise of corporate powers under such attempted organization: Gibbs’ Est., 157 Pa. 59. Moreover an appointment of a receiver to wind up the affairs of a corporation is conclusive of all prior matters involved in such appointment: Capital City Fire Ins. Co., to use, v. Boggs, 172 Pa. 91; French v. Harding, 235 Pa. 79.
2. Coleman was secretary and treasurer of the InterState Lumber Co. During the time of its operations he borrowed the sum of $5,000 from the Potter Title and Trust Co., the defendant, and with his wife gave a mortgage on his wife’s property to secure the loan. After-wards Coleman gave some ten checks drawn on the Beal
The evidence discloses the absence of inquiry on the part of the Potter Title and Trust Co. as to .the authority of Coleman to issue the checks. Under the authorities above quoted we think the transaction bore upon its face the presumption of illegality; that having exercised no such caution in the matter as is required by law, the money received from the checks cannot be retained by it. There is one check which Coleman gave to his own order and endorsed to the Potter Title and Trust Company, which check upon its face has the words, “account sal
3. The defendant sought to prove that Coleman, the treasurer, had individual claims against the corporation. This was held to be incompetent and we think rightly so. The reason for the avoidance of the checks given by Coleman is found in his lack of authority to issue them. The directors of the company are the persons entrusted with the funds of the corporation. If the treasurer desired to have any claims of his against the company adjusted, such adjustment should have been made through the proper officers. When the treasurer of a corporation is sued.for moneys in his hands, he may not set off a debt or independent claim: Eastman’s Private Corporations in Pennsylvania, 2d Ed., Section 163. “There is fairly to be implied from the relation he sustains an understanding not to plead set-off but to account and pay over whatever money came to his hands in that character.” Russell v.
4. There was some evidence sought to be introduced that Coleman had deposited some of his own funds in the same account in which the company funds had been kept and thus mingled his funds with those of the corporation. The money deposited being in the name of the company, every presumption was that it belonged to the company and the lower court very properly held that there was no evidence that definitely showed that at the times the checks were given any of Coleman’s money was included in the bank against which the checks were drawn and further there was no evidence that any of the officers of the company, barring Coleman himself, knew of the methods Coleman was employing in regard to the funds, or of any mingling of Coleman’s funds with those of the corporation.
5. The appellant urges that there was an abandonment by the officers of the corporation to Coleman of the entire management of the company and thus they are es-topped from denial of liability for his acts: Hartzell v. Ebbvale Mining Co., 239 Pa. 602; Chestnut St. Trust, Etc., Co. v. Record Pub. Co., 227 Pa. 240; First Nat. Bank v. Colonial Hotel Co., 226 Pa. 292. This question was not submitted to the jury. In the very nature of things, the operations of the corporation were not very extensive, its business being the purchase of lumber by its members through the central office at wholesale prices. It nowhere appears in this case as it does in the cases above cited that the entire control and management of the corporation was abandoned to Coleman, or that the directors had knowledge of his unlawful acts, or that the corporation derived any benefit from his acts, or that any one was misled through the negligence of the corporate officers. The corporation it is true latterly ceased to do much business but a cessation of business does not imply an abandonment of corporate control. We think the
We think the above covers all the assignments of error. All the assignments of error are overruled and the judgment is affirmed.