Case ID: ohio-st_23/html/0622-01.html
Source: Caselaw Access Project
Author: {"author": "Welch, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hanna and Finley v. The International Petroleum Company.
    1. A corporation chartered and organized in a sister state, with power to do business in Ohio as well as in its own state, may be made party defendant to an action of replevin, in place of its agent against whom the action is brought, and recover in said action the value of the property replevied, although it has done no business in the state of its creation.
    2. Where the owner of personal property, in a proper case, and where it can he done without injury to the rights of the adversary party, is by order of court substituted as defendant in an action of replevin, in place of the owner’s agent against whom the action was brought, the sureties in the replevin bond or undertaking are not thereby released, but stand bound for the indemnity of the new party, equally as if he had been the original and only defendant.
    Error. Reserved in the District Court of Morgan county.
    The defendant in error was incorporated by a legislative .act of the State of Pennsylvania, empowering the company to carry on the business of mining in Pennsylvania and in other states. The company duly organized in Pennsylvania, in 1865, but it had not, at the time the proceedings now brought in review were pending, done any business in that state, except to- keep up its organization. In 1866, the company was prosecuting its mining business in Ohio, and John H. Edson was its agent there. As such agent, Edson had in his possession certain articles of personal property belonging to the company, for the recovery of which property Antonio Pelletier brought an action of replevin against Edson; and the plaintiffs in. error, Hanna and Finley, became Pelletier’s sureties in a replevin bond or undertaking, executed in conformity to the statute, and conditioned that Pelletier should duly prosecute his action aforesaid, and pay all costs and damages which might be awarded against him. Pending the action, and after the replevin of the property, and the execution of the undertaking, on motion of said International Petroleum Company, and by consent of the parties in the cause, the company was made party defendant in lieu of Edson; and such proceedings were thereafter had that the company recovered a judgment against Pelletier for $1,297 damages, and $32.83 costs — which judgment remaining, in part, unpaid, for want of property whereon to levy, the company brought its action against Hanna and Finley upon their undertaking, to recover the amount of the judgment remaining unpaid. The cause was submitted to the court upon demurrer to the answer — the petition and answer setting forth substantially the facts above recited. Thereupon the court sustained the demurrer, and rendered a judgment in favor of the company.
    To reverse this judgment a petition in error was filed in the District Court, and reserved for decision here.
    The grounds of error insisted upon are: 1. The International Petroleum Company could not own property, or be a party to a suit in Ohio; 2. By the substitution of the company in place of Edson, the sureties were released from the obligation of their undertaking.
    
      Hanna & Kennedy, for plaintiff in error:
    1. The International Petroleum Company had no valid existence as a corporation, and could not sue in Ohio. 13 Peters, 588; 14 Ib. 126; Hill v. Beach, 1 Beasley (N. J.), 31; Merrick v. Maynard, 38 Barb. (N. Y.) 574; Angell & Ames on Corp. (8 ed.), sec. 104; 23 U. S. Dig. 123, par. 47-50; 22 Ib. 139, par. 56, 57, 58; 1 Black (U. S.), 286; Whitford v. Panama R. R. Co., 23 New York, 465; Miller v. Ever, 27 Maine, 509; Ward v. Poole, 2 Kernan, 495; 12 U. S. Dig. 131, par. 3; Land Grant R. R. Co. v. Coffee County, 6 Kan. 245.
    2. The substitution of the company for Edson, in the replevin suit, discharged the sureties in the undertaking in replevin. The undertaking was to Edson only, and by its-terms was not negotiable. 17 Ohio, 565; McGovney v. The State, 20 Ohio, 93; State v. Cutting, 2 Ohio St. 1.
    
      F. B. Pond, for the defendant in error:
    1. The Pennsylvania act, by its operation, created the corporation. Angell & Ames on Corp. 562, sec. 2; People v. Horton, 6 Hill, 501; Brouwer v. Appleby, 1 Sandford, 158.
    2. No one can assert that the design of the corporation was an illegal one but the party injured by the unlawful design. People v. Saratoga, 15 Wend. 113.
    3. The corporation could sue in Ohio. Ohio, ex rel. v. Sherman, 22 Ohio St. 434; Angell & Ames on Corp. 121—124, and notes; 2 Kent, 285, and note; Am. B. Soc. v. Marshall, 15 Ohio St. 541; Lewis v. Bank of Kentucky, 146; National Bank v. Lovell, 2 Sup. Ct. Rep. 397.
    4. The cases in 1 Beasley and 6 Kansas apply only where one state attempts to create a corporation for the exclusive-purpose of doing-business in another state.
    5. The substitution in the replevin suit is directly authorized, and indeed required, by the civil code, secs. 34, 35, 40-44 (S. & C. 958), in such a case. The undertaking took the place of the property and became the means of reimbursing the real party in interest. See also Jennings v. Johnson, 17 Ohio, 155.
   Welch, J.

That a foreign corporation, under the present laws of Ohio, can hold property in the state, and sue and be sued in her courts, is well settled, and is perhaps not intended to be denied. The argument seems to be, that this company was not a corporation, either because it was empowered by its charter to do business outside the state of its creation, as well as inside the state, or else, because-at the time these proceedings were had, the company had^ done no business, beyond its mere organization, in the State of Pennsylvania. We are unable to see why the incorporation should be invalidated on either or both of these-, grounds. The question is simply, whether a corporation,, authorized by its charter to do business both at home and. abroad, and which, after due organization at home, commences its foreign business first, has a legal existence as a, corporation. We answer that it has. The life of a corporation dates from its organization, and not from the time-it begins to do business; and the insertion in its charter of a power to act outside the state of its creation does not invalidate the charter. The company was a legal corporation-in Pennsylvania as soon as organized there, and without commencing business there. Being such, it surely had the right to sue for and recover its property wherever found,, provided the laws of the place did not deny it the right:

We are likewise unable to agree with counsel in their second ground of objection to these proceedings. We-think that the substitution of the company as defendant, in place of its agent Edson, did not release the sureties in the-undertaking. By the terms of that instrument the sureties undertook that the plaintiff should duly prosecute his-“action aforesaid,” and pay “all costs and damages” awarded against him. The costs and damages here sought to be recovered were awarded “ against him,” and they were awarded against him in the same “ action.” It was a proper case for the change of parties; the change worked no prejudice to the rights of Pelletier; and it was made in pursuance of provisions of law which were in force-at the date of the undertaking. This undertaking is in the statutory form. Its language is broad enough, to cover a case like the present; and we suppose it was the intention of the legislature that it should cover such a case.

Judgment affirmed.