Court Opinion

ID: 6957579
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:40:05.426554+00
Date Added: 2024-06-11T16:08:19.370452
License: Public Domain

Mr. Justice Sheldon delivered the opinion of the Court: The only question here arising is, whether the defendants were exempt from individual liability by reason of having become a corporation. The second section of the act of Wisconsin, under which defendants claim to have become incorporated, provides that, the persons who, by articles of agreement in writing, should associate according to the provisions of that law, and who should comply with the provisions of that chapter, should become a body politic and corporate, etc. Mot that they should so become by articles of agreement in writing, but the further thing was required, of a compliance with the provisions of that chapter. Section 17 is express, that before any corporation formed arid established by virtue of the provisions of law, shall commence business, the articles of association should be published in two newspapers in the county in which the corporation was located, and the certificate required should be deposited with the Secretary of State, and a duplicate with the clerk of the town or city where the corporation was to transact its business. We are of opinion that in this case, as the question here comes up, the right of the defendants to he considered a corporation, depends upon their having complied with the requirements of the statute, at least to the extent of the publication of their articles of association, and the filing of the certificate. These are important acts as affects the public interest, as affording means of notice respecting the corporation to such as deal with it, so that they may regulate their action and give or withhold credit accordingly, and we think they are to be regarded as statutory prerequisites, essential to corporate existence. The defendants are seeking escape from individual liability; let them show that they have complied with the statute which enables them to do so, at least substantially, as respects the above named acts. Such we regard to be the doctrine of the authorities. Union Insurance Co. v. Cram, 43 N. H. 641; Mokelmune Mining Co. v. Woodbury, 14 Cal. 425; Harris v. McGregor, 29 id. 124; Spencer Field v. Paul Cooks, 16 Louisiana An. R. 153; Angell & Ames on Corp. see. 83. Various cases decided by this court have been cited by appellees’ counsel, containing general expressions to the effect that an organization in fact and user under it are sufficient to show a corporation de facto, although there might have been irregularities or omissions, and that these could not be urged collaterally against the existence of the corporation, but only in a direct proceeding by scire facias, or by information in the nature of a quo warranto. But these cases, we conceive, have but an imperfect application here. Some of them were cases where special charters had been granted, and almost all were cases between the company and its stockholders. There is a manifest difference where a corporation is created by a special charter and there have been acts of user, and where individuals seek to form themselves into a corporation under the provisions of a general law. In the latter case, it is only in pursuance of the provisions of the statute for such purpose, that corporate existence can be acquired. And there would seem to be a distinction between the case where, in a suit between a corporation and a stockholder or other individual, the plea of nul tiel corporation is set up to defeat a liability which the one may have contracted with the other, and the case of a suit against individuals who claim exemption from individual liability, on the ground of their having become a corporation formed under the provisions of-a general statute. In the latter case, a stricter measure of compliance with statutory requirements will be required, than in the former. The most pertinent of these cases referred to in this court are Cross v. Pinckneyville Mill Co. 17 Ill. 54, and subsequent cases following it, where it was held, that, under the act of 1849, p. 87, the filing of the duplicate certificate of organization in the office of the Secretary of State, required by the first section of that act, was but directory, and the omission to so file it did not defeat the organization. But it was put upon the ground that, as the first section required the certificate to be filed in the office of the clerk of the county in which the business of the company was to be carried on, the filing of the duplicate in the office of the Secretary of State was regarded as a secondary object; and that that view was confirmed by the language of the second section, in declaring that “ when the certificate shall have been filed as aforesaid,” the persons signing, and their successors, “ shall be a body politic and cor-' porate in fact and in name.” And it was there said: Whatever is expressly or impliedly required to be done as essential to bring the corporation into existence, must be done. This court has never held that individuals could make themselves a corporation by the mere signing of articles of agreement. And in the language of Parsons on Partnership, p. 544, “we do not believe that a joint stock company, or any other partnership, can limit its own liabilities and become a corporation or limited partnership by its own act and without any regard to the formalities or requirements of the law;” and see Stowe v. Flagg et al. 72 Ill. 397. The account sued on commenced March 2, 1871, and ended August 19, 1871. Nothing had been done toward incorporation, except the signing of the articles of association, until July 8, 1871, when the articles werfe filed with the Secretary of State of Wisconsin. They may be regarded, perhaps, as substantially em. bracing the particulars required in the certificate. • The greater portion of the indebtedness sued for had been contracted prior to that time. The filing of the articles in the office of the city clerk of Milwaukee, in which place the business of the corporation was to be transacted, and the publication in the newspapers, did not take place until after August 19, 1871, when the whole indebtedness had been contracted. We are of opinion the defendants were liable as partners, and had not absolved themselves from responsibility as such by having become a corporation. The judgment will be reversed. Judgment reversed.