Court Opinion

ID: 8299457
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:10:56.896465+00
Date Added: 2024-06-11T16:44:14.170398
License: Public Domain

McAlistek, J.
This bill was filed in the Chancery Court of Shelby County to foreclose a mortgage executed .by the defendants to the Southern Building & Loan Association. The bill recites that, October 1, 1894, C. W. Frazier, deceased, and Letitia A. Frazier, his wife, mortgaged certain real estate in Memphis to said association to secure a loan of $4,000. The bill further showed that on November 1, 1894, C. W. Frazier executed a mortgage on the same property to Mrs. P. A. Edmonds. This was about one month after the mortgage was executed to the building and loan association.
C. W. Frazier died, leaving a will, in which he left the property included in the mortgage in trust to secure debts to Mrs. P. A. Edmonds, and then to his wife, Mrs. L. A. Frazier.
The answers denied that the Southern Building & Loan Association was a corporation, and denied that the transaction in question was in accordance with and governed by the law of building and loan corporations. Mrs. P. A. Edmonds, in her answer, claimed that her mortgage was superior to the one sought to be foreclosed. The ground upon which the corporate existence of the Southern Building & Loan Association was attacked is that, while the charter purports to have been registered in Knox County, Tenn., the facsimile of the great seal of the State of Tennessee was not registered, as required by law.
Shannon’s Code, § 2026, provides how corporations *464are formed. It says: “The said instrument [application for incorporation], when probated as hereinafter provided [§2542], with application probates and certificate, is to be registered in the county where the principal office of the company is situated, and also registered in the office of the Secretary of State; and a certificate of registration given by the Secretary of State, under the great seal of the State, shall, when registered in the Register’s office of said county, with the facsimile of said seal, completé the formation of the company as a body politic, and the validity of the. same in any legal proceeding shall not be collaterally questioned.” The argument is that the corporation enjoys no vitality or existence until these conditions precedent are observed.
The particular infirmity in the present charter, which, it is claimed, has destroyed, or, rather, pre-. vented, eorpoi’ate life, was the failure of the Register to make a facsimile of the great seal of the State in registering the charter. It is insisted the certificate of Johnson, Register of Knox County, shows that the so-called great seal of the State of Tennessee, as recorded in Knox County, did not have emblazoned thereon the two pictures which symbolize agriculture and commerce. It is true the Register, in copying the great seal, has not made a very artistic representation, but it bears intrinsic evidence that it was intended for the great seal of the State, and it so recited.
Counsel cite numerous authorities to the effect *465that when compliance with certain statutory requirements is made a condition of corporate life, noncompliance is fatal, and the corporation cannot be viewed as a de facto concern. In State v. Brewer, 7 Lea, 682, it appeared defendant was indicted for selling liquor within four miles of an incorporated institution of learning, and, in order to convict him, it was necessary to show the McKinney High School was a corporation. It was claimed to be incorporated, but the incorporators had failed to register the . certificate of the Secretary of State and the facsimile of the seal of State. This Court held it was not a corporation, saying: “As we have seen, these things were not done when the offense is alleged to have been committed, hence the McKinney High School was not then an incorporated institu-tution ■ in the sense of the statute. ’ ’
But we are of opinion these authorities are not applicable, since there was a substantial compliance with the statute in the present case. The great seal of the State was spread upon the record. The fact that the emblems of commerce and agriculture were not copied, was due, perhaps, to the fact that the Register was not an artist or sufficiently expert to draw the pictures. It was not expected that the Register should have a scenic artist or' illustrator in his office. In respect of the registration of the seal of any deed a scroll is sufficient.
In 20 Am. & Eng. Enc. L., 560, note 5, it is said: “The seal of a deed is sufficiently recorded *466if indicated upon the record by the word ‘ seal ’ written within a scroll or some similar device.” Citing Dale v. Wright, 57 Mo., 110; Huey v. Wan Wie, 23 Wis., 613; Pulney v. Cutter, 54 Wis., 66; Switzer v. Knapp, 10 Iowa, 72 (S. C., 74 Am. Dec., 375).
The third assignment of error is that the decree in favor of complainant is excessive and that there was no competitive bidding when the loan was made to C. W. Frazier, and hence the transaction was illegal and usurious.
The amount • decreed by the Chancellor was determined by the rule laid down in Rodgers v. Hargo, 92 Tenn., 35, and applied by this Court at last term in Carpenter v. Richardson.
The averment of the answer that there was no competitive bidding for this loan was not proven. We find no error, and the decree is affirmed.