244 Pa. 417 | Pa. | 1914
Opinion by
From the history of this case it appears that in October, 1906, Henry Tonge and Rae Tonge, his wife, brought suit against “The Item Publishing Company” for damages previously sustained, by reason of injuries to the wife through the negligence of the driver of a wagon, who whs engaged in delivering the newspaper known as “The Philadelphia Item.” The suit resulted in verdicts for plaintiffs. Judgments were entered, theroh and no appeal was taken therefrom. Execution issued against the corporate property of the. Item Publishing Company was returned “nulla bona.” The present bill in equity was filed by the-judgment creditors against certain subscribers and against the legal representatives of certain subscribers to the capital stock of a corporation which it was proposed to organize in the year 1903 to be known as “The Item Publishing Company,” and payment of the stock subscriptions then made was sought to be enforced. It appeared, however, that no organization of the proposed corporation was ever actually, effected
In 1 Morawetz on Private Corporations (2d Ed. 1886), section 67, it is said: “Every subscription by implication refers to and incorporates the terms of the charter or general law under which the corporation is to be formed; and every subscriber agrees to become associated with the others only upon condition that the formalities prescribed by the charter shall be observed in making the mutual contract. Thus, if certain preliminaries, such as the filing of a certificate, are required to be performed after the articles of association have been subscribed, but before the corporation shall be in existence, the contract of membership does not go into effect until these formalities are complied with; and a subscriber to the articles cannot until then be made to contribute the amount of his subscription.”
The trial judge however reached the conclusion that “The defendants are estopped from denying the corporate existence of The Item Publishing Company.” He evidently based this conclusion on two findings of fact. First, that from 1903 until 1908 the Item newspaper contained a notice that all communications should be addressed ,to The Item Publishing Company. Secondly, that upon the various trials of the suit at law for damages, the company appeared, was represented by counsel, and made defense to the claims of plaintiffs. Reference to the first finding of fact, shows that in the published notice, there is no statement that The Item Publishing Company is a corporation. The mere fact that it is called á company, is not conclusive, as it was quite possible for a partnership to do business under the name company. Then in his twelfth finding of fact, the trial" judge uses this expression: “Led by the above quoted announcement to believe that the publishers of the paper and owners of the wagon were incorporated.” The announcement to which reference is made, however, contains no mention of the existence of a corporation, and we are at a loss to see how any one could havé been led by it to believe that The Item Publishing Company was necessarily a corporation. Referring to the evidence, it appears that at the time of the trials, Hildebrand Fitzgerald was dead. Harrington Fitzgerald was present at the trials, and apparently was active in the defense. He testified that no such corporation as was in question, was in existence, and he cannot now therefore be held to be estopped by anything which he said in this respect at the trials; the result of those
It is argued on behalf of the appellant, Frances L. Fitzgerald, executrix, that defendants were' estopped not from denying liability on their stock subscriptions, but from denying liability as executors, or individuals, and partners. This argument seems to be based on the assumption that plaintiffs were “misled into the belief” that defendants were incorporated. No testimony is pointed out which indicates that they were so misled, and we do not find any such evidence in the record,' unless it be in the fact, which is conceded, that the defendants printed in their newspaper a notice that all communications should be addressed to The Item Publishing Company: but as we have said, there was no statement in this notice that the company was a corporation, and the notice was not in itself inconsistent, with the fact that the concern was conducted as a partnership. The plain requirement of the Act of 1874 is, that the certificate of incorporation shall be recorded in the recorder’s office in the county where the business is to be carried on. If the record in that office had been examined in behalf of plaintiffs before commencing suit it would have readily appeared whether or not such a corporation as “The Item Publishing Company” was in existence. Such an examination would have shown that an essential statutory requisite to the existence of such a corporation had been omitted, in that no certificate of its incorporation had been recorded, and it would follow, that the subscribers to the stock were not liable on their subscriptions. If they were carrying on the business as a corporation de facto, they would be liable as partners: Guckert v. Hacke, 159 Pa. 303; but they were not sued as such, and no service of process was made upon them individually. In Hill v. Epley, 31 Pa.
Reference is made by counsel to “a judgment recovered against several in a common name.” We do not, however, find any such judgment in the damage suit. The judgment which was recovered by plaintiffs was against the corporation. No individuals were named as defendants and none were served with process. We find nothing in the record to justify the statement that the judgment obtained was “against several in a common name.” A suit against a partnership in the firm name only, without naming the individual partners, will support a verdict, and judgment, and execution against partnership property: Seitz v. Buffum, 14 Pa. 69; McDonald v. Simcox, 98 Pa. 619; Moore v. Moore, 153 Pa. 495. But such a judgment will not bind individually a partner not served with process in the action against the firm, nor can execution be issued against him. See 2 Troubat & Haly’s Practice, section 2145, and cases there cited. In 30 Cyc. L. & Pr. 560, the rule is thus stated: “Except where it is otherwise provided by statute, a suit cannot be brought by or against a partnership in the firm name alone, but it is necessary that the name of each member of the firm should be set forth.” And in 1 Black on Judgments (2d Ed. 1902) section 237, the same rule appears. It is there said: “At the common law, where a partnership is sued, each member of the firm must be brought within the jurisdiction of the court by due citation. Hence, where an action is instituted against several persons constituting a partnership, and one partner is not served with process, and judgment is rendered against them all, such judgment will be voidable so far as concerns the partner who was not served.”
Another suggestion which does credit to the sense of fairness of counsel for appellant, Frances L. Fitzgerald, executrix, is, that a liberal right of amendment might enable plaintiffs to convert their creditors’ bill into a
Tbe decree of tbe court below is reversed, and tbe bill is dismissed. Tbe costs of this appeal to be borne by appellants. .