Court Opinion

ID: 6243875
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:52:29.44185+00
Date Added: 2024-06-11T08:59:14.351156
License: Public Domain

Opinion by
Mr. Chief Justice Stebbett,
This suit, against Harry P. Crowell and four others trading as the Crowell & Class Cold Storage Co., was brought to recover the principal, interest, etc., of a note for $2,500, at four months from September 5, 1893, made by said company to its own order and by it indorsed, etc.
One of the defendants was not served. Two of the others filed no affidavit and judgment by default was taken against them. The remaining two — appellants in this case — filed an affidavit, which was adjudged insufficient, and judgment was accordingly entered against them. It is claimed that in so doing the court below erred. That question must be determined by the averments contained in the statement of claim and affidavit of defense. Without referring in detail to the former, it is sufficient to say that they present a clear prima facie case against the defendants; and, unless some good ground of defense is presented in appellants’ affidavit, there was no error in entering judgment against them for want of a sufficient affidavit of defense.
While their affidavit contains a general denial of liability and undertakes to traverse or qualify some of plaintiff’s averments, it is not denied that for several years prior to giving the note in suit, appellants, Harry P. Crowell and Charles Class as co-partners, carried on the cold storage and general storage and warehouse business at their warehouse 50 and 52 North Delaware avenue, Philadelphia; that in the spring of 1892 they *321signed and presented to the governor a certificate of association and applied for a charter of incorporation as the Crowell & Class Cold Storage Company for the purpose of transacting the same general business at same warehouse. In that certificate, it appears that appellants each subscribed for six hundred and forty-seven shares of the stock of the proposed corporation, and their codefendants in this suit, Charles H. Newell, J. R. Gibb and Amos H. Evans, each subscribed for two shares of said stock. The business aforesaid was continued at same place from September 5,1893, to January 9,1894, and before and after these dates, in the name of the Crowell & Class Storage Company, but, notwithstanding letters patent were issued to the subscribers to said stock in April, 1892, the certificate of incorporation was not recorded in the office for recording deeds in the city and county of Philadelphia until November 14,1893, more than two months after the note in suit was given.
In the statement it is averred among other things that the defendants, after making and indorsing the note in suit as aforesaid, caused it to he delivered to plaintiff bank by which the same was thereupon discounted for value, before maturity and before the recording of the certificate in said recorder’s office; that plaintiff bank became and was the holder of said note for value, before maturity and before the recording of said certificate, without knowledge or notice of any of the facts therein averred in reference to the presentation of said application to the governor of Pennsylvania for a proposed corporation, and without knowledge or notice of any attempt or intention on the part of the defendants to form themselves into a corporation.
These and other material averments, in support of plaintiff’s claim, are either substantially admitted or not sufficiently traversed or denied in the affidavit of defense. In that part of their affidavit referring to the meeting of the board of directors of the proposed corporation on February 14, 1893, etc., appellants virtually admit that theretofore they were interested in the association both as shareholders and officeholders therein, and say: “ at said meeting these deponents having resigned their offices which they had previously held, their successors were duly elected,” and, on the following day, “ all their shares in the capital stock of said company were duly assigned on the books of the company to the purchasers, and from thenceforth *322neither of these deponents has had any interest in the said company or the capital stock thereof, or in its business, assets or profits. Circulars were issued and sent to all persons dealing with the concern, stating that these deponents had no further connection with said business.”
It will be noted that this was nearly ten months after the certificate of association as previously averred “was duly approved, .... enrolled .... in the secretary’s office in Harrisburg, .... and letters patent were issued,” etc., and nine months before the certificate was recorded in the recorder’s office of the county in which the chief operations of the intended corporation were carried on.
We find nothing in the affidavit of defense that can have the effect of relieving appellants and their associates from liability as partners to the plaintiff bank. It is not averred that any of the “ circulars,” alleged to have been “ issued and sent to all persons dealing with the concern,” were either sent to or received by the plaintiff, for it does not appear that plaintiff had any dealings with “ the concern ” prior to becoming the holder of the note in suit. The well settled rule is that notice of the dissolution of a partnership given in a newspaper, printed in the city or county where the partnership business is carried on, is of itself sufficient noticé to all persons who have not had previous dealings -with the partnership, so as to relieve a withdrawing partner from liability for debts subsequently contracted in the name of the firm without his consent express- or implied: Watkinson v. Bank of Pennsylvania, 4 Whart. 482; Robinson v. Floyd et al., 159 Pa. 165.
There is no merit in the contention that the name of Crowell & Class Cold Storage Company, and the form in which the note is signed, etc., were sufficient to put the plaintiff bank upon inquiry, and that due prosecution of that inquiry would have disclosed the fact that the maker of the note was an incorporated association and not a partnership, and that appellants, who had previously been shareholders therein, had transferred their stock and withdrawn therefrom in February 1893. Such business names are perhaps as commonly used at present by unincorporated associations, partnerships and individuals as by corporations. The forms and methods of business corporations are frequently adopted by unincorporated associations, partner*323ships, etc., and their business conducted by a president, cashier, etc.: Scott’s Appeal, 159 Pa. 165. There is nothing in the case to justify the conclusion that plaintiff had notice express or implied that the maker of the note was a corporation: In fact, the final act necessary to complete the incorporation of the association was not performed until two months and nine days after the note was made and indorsed. As we have already seen, it is positively averred in the statement that plaintiff became the holder of the note for value without knowledge or notice of any attempt or intention on the part of the defendants to form themselves into a corporation.
As to recording the certificate of incorporation, it was held in Guckert v. Hacke et al., 159 Pa. 303, that failure to record it, as required by the act, in the recorder’s office of the county where the association’s chief operations are to be carried on, will render the incorporators personally liable to persons who deal with the association without knowledge of the incorporation. As was there said, “ One of the purposes of the act being exemption from personal liability in the transation of business, it was obviously material that the public should have notice, and notice by record was accordingly prescribed. Failure to record was failure to comply with one of the express conditions of incorporation and consequently of exemption from liability.” Our purpose is to adhere to that position.
Without further elaboration, we are satisfied the learned court was right in holding that the affidavit of defense was insufficient.
Judgment affirmed.