Case ID: iowa_64/html/0220-01.html
Source: Caselaw Access Project
Author: {"author": "Servers, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Lewis v. Tilton et al.
    1. Unincorporated Organization: persons contracting for personally liable. An unincorporated organization cannot be a party to a contract, nor to an action at law; and persons contracting in the name of such an organization are themselves personally liable, either as being themselves in fact principals, or as holding themselves out as agents for a principal which has in law no existence. And held further, arguendo, that all members of such a body, who assent to an undertaking whereby a debt is incurred, or who subsequently ratify it, are liable for the payment of the debt. See authorities cited in opinion.
    
      Appeal from, Wapello Cvreuit Court.
    
    Saturday, June 14.
    The petition, as amended, states that the defendants and others formed a benevolent society for the prevention and suppression of intemperance, known and designated as the Ottumwa Temperance Reform Club, and that they were chosen to represent such society as its executive committee; that in March, 1878, the defendants entered into a written contract of lease with plaintiff, by the terms of which said Ottumwa Temperance Reform Club was to and did occupy the premises described in said lease, at the yearly rental of fifteen hundred dollars; (a copy of said lease is attached to the petition;) that by virtue of said lease the defendants, and the society of which they were members, occupied said premises from March 1, 1878, to July 1, 1879, and enjoyed all the benefits resulting from such occupancy; that these defendants verbally contracted with the Ottumwa Gas Light Company to furnish said Ottumwa Temperance Reform Club the gas required to light said opera house and rooms thereunder; that by virtue of said verbal understanding the gas company did from time to time, and as required, furnish said club a large amount of gas; that said club was not incorporated at the time the above contracts were made, and is not now; and that said ■ account for gas has been assigned to plaintiff.
    
      Upon the grounds above stated, the plaintiff sought to make the defendants individually liable. To the petition there was a demurrer, which was sustained, and the plaintiff filed an amended petition, stating various acts and things done, and reaffirming all the allegations of the petition; and thereupon asked judgment against the defendants individually. To the amended petition the defendants demurred. The demurrer was sustained, and the plaintiff excepted, and, electing to stand thereon, appealed.
    Williams, Jaques <& Adler, for appellant.
    
      Chambers dk McElroy, for appellees.
   Servers, J.

I. As we understand the petition, the verbal contract entered into with the gas company is an original undertaking on the part of the defendants. At their request the gas was furnished the club, and, of course, it seems to us, the defendants are bound to pay for the gas so furnished. It matters not to whom it was furnished. The gas company had the right to expect that the defendants would pay for whatever was furnished at their request. There is no allegation that credit was extended to the club; and the only presumption which can be indulged in is that the credit was extended to the defendants. As they contracted, they must pay.

II. The more serious question is whether the defendants are individually liable under the lease, which, on its face, shows that it was entered into between the plaintiff, as party of the first part, and the Ottumwa Temperance Reform Olub, party of the second part, and is signed by the plaintiff, and by the defendants as follows:

' “ R. L. Tilton, S. B. Thrall, David Eaton, J oseph Sloan.”

“Executive committee of the Ottumwa Temperance Reform Club.”

It is insisted that the lease shows that credit was extended to the club, and that the contract was made with it; that the principal was named, and therefore the defendants cannot be made individually liable. This line of argument possibly would be conclusive if there was a principal. But there is none. The club is a myth. It has no legal existence, and never had. It cannot sue or be sued. The defendants contracted in the name of a supposed principal; that is, they claimed there was a principal for whom they were acting, but it now appears that there was no principal known to the law. But, under the allegations of the amended petition, it should be assumed, we think, that there was, as a matter of fact, a body of men associated together for a benevolent purpose, who had assumed the name above stated, for the avowed purj>ose, by their united efforts, of suppressing intemperance. There is, however, some doubt in our minds whether it can be said that the plaintiff extended credit to an organization that had no legal existence. As the law does not recognize such an organization, we are at a loss to know how or why it can be said as a matter of law that the plaintiff contracted with and extended credit to a mere myth. In legal parlance, the organization cannot be named. It has no habitation or place of abode.

It is also insisted that a fund was provided for the payment of debts, and hence it must be presumed that the plaintiff contracted in reliance upon such fund, and therefore the defendants cannot be made individually liable. What the fact may be we are not advised, but certainly this does not appear on the face of the petition, and we have looked into the lease, and there is no provision in it from which such an inference can be drawn.

It is also insisted that there is no known legal principle or rule under which the defendants can be made liable. It is said that they are not parties. This is. true; that is to say, these defendants could not bind any other members of the organization as a partner in a joint enterprise, or a contract as to which he had no knowledge, and to which he did not assent. But we think “ those who engaged in the enterprise (that is, became members of the organization) are liable for tlie debts. They contracted, and all are included in such liability who assented to the undertaking or subsequently ratified it.” It was so held in Ash v. Guie, 97 Pa. St., 493; Fredendall v. Taylor et al., 26 Wis., 286; and this rule is supported to some extent by what was said by this court in Keller v. Tracy, 11 Iowa, 530, and Drake v. The Board of Trustees, Id., 54.

But it is said, these defendants did not contract. They certainly represented that they had a principal for whom they had authority to contract. They, for or on behalf of an alleged principal, contracted that such principal would do and perform certain things. As we have said, there is no principal, and it seems to us that the defendants should be held liable, and that it is immaterial whether they be so held because they held themselves out as agents for a principal that had no existence, or on the ground that they must, under the contract, be regarded as principals, for the simple reason that there is no other principal in existence. We think the demurrer should have been overruled.

Ee VERSED.