The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-05-12
THE KELLEY INSTITUTE.
DWIGHT, ILLS, INSTITUTION AID
JUDGED THE OWNER.
Mrs. WeggeIand Granted n Decree
of Divorce-TrO Candidates for
the Reform Schoo1-AIOre Alleged
Illegal Medical Practitioners Ar
rested-Short Orders, New Actions
Filed, and General Court News.

I
submitted on May 3.
The suit was brought to recover
81, 700 alleged to be due for rent Of the
store in the Constitution building for
the months of June, July, August and
September, 1893.
Pratt and Johnson, in their individ-
ual answers, set up that on August 4,
1892, they organized the Johnson-Pratt
Drug company, and on that date as
signed the lease to the company and
were, therefore. not liable for any more
rent.
The Johnson-Pratt Drug company
denied that they were IN possession of
the store during the four months for
which rent is claimed, and alleged that
on May 81, 1898, they assigned the
lease to B. F. Johnson and on that
date vacated the premises.
His honor gave judgment against the
defendants c. Z. Johnson and p. P.
Pratt, jr., for the amount claimed and
denied judgment against the Johnson
Pratt Drug company. The opinion,
which is exhaustive and clear and
settles points of interest in the law of
landlord and tenant, is in full as fol-
lows:
The Opinion.
In this case it is practically admitted
that the only question now remaining
is as to the right of the plaintiff to
hold the defendant corporation upon
its alleged assumption Of the indebted
ness in question. and l Will, therefore,
discuss that question only.
The contention that the corporation
is liable for the rent in question, by
virtue of its acceptance of the assign
ment of the lease, Notwithstanding it
had assigned all its interest in the
lease to a third party and vacated the
premises before the rent in question
had accrued, l think is untenable.
The next question is the claim Of
liability under the alleged assumption
of the Indebtedness by the corporation.
The corporation not having been or
ganized was not capable of assuming
such Indebtedness, and the promoters
and incorporators had no power to
bind it by any agreement previously
made, either in their name or in its
behalf.
1 do not think that the corporation
or promoters of the same (conceding
that such power existed. assumed the
obligation in question. If the corpora
ton is liable at ALL no right of action
exists in favor of the plaintiff.
The clause under which it is claimed
the defendant corporation assumed the
payment of the debt in question was
inserted by the promoters of the cor
poration in article 10 of the articles
of incorporation and was not and could
not be an act of the corporation, be-
cause it then had no legal existence,
was not recognized legal entity and
had no existence, and no one could act
for it, and no act of the promoters of
the corporation could bind it.
Our statutes with reference to cor
porations, section 226S, volume 2, while
payments for capital stock
10 be made in property in lieu to
money, intends, as 1 believe, unincum-
bered property. At any rate it does
1ot permit the corporation to be loaded
down with an assumed Indebtedness
foisted upon it by interested incOrpora
tors who desire to rid themselves Of
by shifting it on to the
To permit this would be a fraud upon
he corpora ton, upon the law, the other
who may become such, and upon credi-
.ors and others dealing with the cor.
1oration who have the right TO pre-
sumo that payment of the capital sub
;cribed is being regularly made and
hat it in fact has the amount of capt.
al for which it is incorporated, either
n money or its fair equivalent in pro-
,erty.
The law intends that the corporation |
shall begin its life and its business
With a capital ready to meet such obi |
cations as it may rightfully incur in
he legitimate prosecution Of its cor
oorate business, and not that as con-
ended by plaintiff that it must be
,urdened at it's inception with an in
oh oil RI r.
capital. For if the contention of the |
plaintiffs counsel can be sustained, the |
is bound not only to pay
he entire rent reserved in the lease
rom the time of incorporation, to wit: |
August 4, 1892, to the expiration Of the |
ease at $425 per month, amounting to |
ver $4,000, but must also pay all other |
debts and liabilities of the |
ate partnership, the amount of which |
S not specific and which does not ap-
ear.
In my judgment, under the law, no
UGH transaction accomplishing such a
esult can bind the corporation.
Conceding, however, that the cor
oration is bound by the acts of its pro-
1oters in agreeing to assume the part
ership Indebtedness, yet the plaintiff
in no better position, as he does not
ONE within the description of the class
f debts or liabilities mentioned in the
sumption clause.
The rent in question is claimed for
he months of June, July, August and
september. 1S93-rent which accrued |
inc months or more after the date Of
he articles of Incorporation. The
anguage of the article relied on as
establishing the corporate liability,
fter reciting the conveyance of the
property TO the proposed
orporation, recites that it is taken.
subject, however, to the payment of
he liabilities of said co-partnership
, existing creditors. which said la
llities said corporation shall, and does
ereby. assume and agree to pay in
onsideration Of the transfer, etc.
At that time the plaintiff was not
n existing creditor of the partner
nip; it did not. so far as the evidence
owe him a dollar. Nothing
hatever was due him under the
.ase. which provided that the rent
hould be $425 per month, payable in
dvance on the first of each month,
nd if the corporation could be held
Y plaintiff for any amount, it could
1ly be such, if any. as might have
zen due at the time Of its incorpora-
on such as he then would have had
e right I'd Immediately demand. The
mt in question did not accrue until
most ninA menths afterwards.
A creditorS is defined y be a. per-