Court Opinion

ID: 6725624
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:03:21.655474+00
Date Added: 2024-06-11T16:01:36.348726
License: Public Domain

The American Soap Co. in the Hamilton Common Pleas alleged that Charles Bogue was president, manager and' director of the Fern-dell Cafeteria Co., organized under the laws of Illinois. This corporation opened a restaurant in Cincinnati, under the name of La Palma Cafeteria, which ordered certain goods from the Soap Co., Bogue representing that he was president and general manager of the Cafeteria Co. "■
The corporation was adjudicated bankrupt in 1923 and at that time there was due the -Soap Co. $902.50, which was reduced hy payments of dividends hy the trustee in bankruptcy until now the Company’s claim is for $575.02 with interest from July 1, 1923. It was claimed by the Soap Co-, that Bogue is liable personally for all the obligations incurred in the name of his company, because of the fact that it did not' qualify as a foreign corporation in Ohio, and was not authorized to transact business'in this State.
The Common Pleas sustained a demurrer to the petition of the Company. This judgment was.affirmed by the .Court of Appeals, and is claimed as bei-ng- in direct - conflict with an opinion of'the Court of Appeals of the Fourth District. (OS. Pend, opinion, 2 Abs. 562.) which held -that stockholders who- attempted to exercise powers of a foreign corporation, which is without authority to do business in the state, are liable as partners for their contracts.
The case is in the Supreme Court for final determination and the question presented is: Are officers, directors, .and managing agents of a foreign corporation doing business 'in Ohio without having complied with the laws of Ohio pertaining to foreign corporations, liable as partners for the debts of the corporation contracted and incurred in this state ?
It is contended that a corporation which has not complied with the' statutes in regard to foreign corporations, 178 GC. et. seq., has exactly the same status as one whose authority to do business has been-revoked, and is'without authority and incompetent to do business in Ohio. That the liability of individuals for debts contracted, by them is based on the general rule, that “a person who assumes to act as agent for a non-existing, or legally incompetent or irresponsible principal, renders himself personally 'liable to the person with whom he-deals----if the want of authority is unknown to the person with whom he deals.”
“It is not disputed hut that officers of corporations are protected from private liability while acting within the' scope of the corporate powers; but how far such protection is extended when they transcend the corporate authority is not clearly defined. That in such cases ' a personal liability exists, seems to be recognized.” Medill v. Collier, 16 OS. 599.
It is submitted that Ohio .should not extend any greater protection to the citizens of another state who see fit to take advantage of the laws of such other state in the incorporation of a company, and then come into Ohio and do business here without complying with our statutes, than residents of Ohio, incorporating in Ohio, and doing business as a corporation in violation of the statutes of another state, would receive from the courts of such other states-