Court Opinion

ID: 6409935
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:51:55.233927+00
Date Added: 2024-06-11T15:51:20.295669
License: Public Domain

Metcalf, J.
The Ontonagon Copper Company was incorporated by St. 1846, c. 270, “ for the purpose of manufacturing copper in the city of Salem, county of Essex, with all the powers and privileges, and subject to all the duties, restrictions, and liabilities, set forth in the thirty eighth and forty fourth chapters of the revised statutes.” The act of incorporation was accepted, and the company organized under it. The defendants were members of the corporation when it was organized, or have since become such. The company never manufactured copper in Salem; but it engaged in the business of mining copper in Michigan, for the purpose of procuring copper ore to be sent to Salem to be manufactured. And its treasurer, with the approval of the directors, gave the *86notes now in suit, for expenses incurred in that business of mining. That business was unsuccessful, and the company is insolvent. The plaintiff now seeks to recover of the defendants, as partners, the amount of the notes, in an action of assumpsit. The first ground taken by the plaintiff is, that there is no corporation; that the acceptance of the incorporating act, and the organization and choice of officers under it, did not produce a corporate existence; that corporate action, in the business for which the legislature offered a charter, was r ecessary to make a corporation; and that, as no such business v as done by the company, it "is still only a collection of indiv iduals, without corporate powers, privileges, or liabilities. These seem to the court to be wholly unwarranted propositions. But we need not so decide; for if they were sound, they would not authorize the plaintiff to treat the members of the company as partners. Fay v. Noble, 7 Cush. 189.
The next ground taken by the plaintiff is, that the company, eren if it be a corporation, had no authority, by its incorporating act, to make contracts for mining in Michigan; that its only authority was to manufacture copper in Salem, and make contracts necessarily incidental to that business; that contracts for mining are not thus incidental; that the company is not legally liable on those contracts; and therefore that the members of the company are personally liable thereon as partners, in a suit on the .notes. We do not admit these premises. But if we held them to be correct, yet the conclusion, which the plaintiff deduces from them, would not follow. The notes, on- their face, though signed by the treasurer of the company, are not his notes, but legally purport to be the notes of the company. Angelí & Ames on Corp. (4th ed.) § 293. But, admitting that the company is not liable on these notes, as a corporation, yet it does not follow that- its members are liable in a suit thereon. They may or may not be liable to the plaintiff, in some form of action, according to circumstances. The members of a corporation may doubtless so manage its concerns as to render themselves personally responsible to those with whom they deal. If they, in the name of the corporation, give notes which the corporation is *87not bound to pay, and which it refuses to pay, they may, in many supposable cases, be held to indemnify the holders of such notes. The remedy against them, however, should not be by an action on the notes, but by an action of tort, as is the remedy against one who signs a note as agent for another, without authority. Ballou v. Talbot, 16 Mass. 461; Jefts v. York, 4 Cush. 371; Jenkins v. Hutchinson, 13 Ad. & El. N. R. 744.

Nonsuit confirmed.