Court Opinion

ID: 7992967
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:33:24.741099+00
Date Added: 2024-06-11T16:35:26.431839
License: Public Domain

Smith, C. J.,
delivered the opinion of the court.
This suit was- instituted by appellant to recover of appellees the price of certain goods, and merchandise sold by it to the Marshall Drug Company. A demurrer interposed to the declaration by appellees was sustained, and, appellant declining to amend, judgment final against it was rendered.
It appears from the declaration that on the 21st of July, 1911, a charter was obtained from the state by certain designated persons for a proposed corporation to be known as the Marshall Drug Company, which corporation was on August 25th thereafter in all respects duly organized, except'thatit failed to comply with section 930, Code of 1906, which requires that “every corporation organ*676ized under this chapter shall, within thirty days after such' organization make report thereof to the secretary of state,” etc., and further provides that “should such report he not made within the time required, the charter granted shall be null and void, and all persons doing business thereunder shall be deemed and held to be partners in the business and liable as' such.” Upon the organization of the corporation one hundred and fifteen shares of its capital stock were purchased by appellee O’Neil, and on the 2d day of October, 1911, five of its shares of stock were purchased by appellee Wilkerson. The company engaged, as it was authorized by its charter so to do, in the drug business at Vicksburg, and so continued until November 12th, during which time it purchased from appellant the goods, wares, and merchandise, the price of which is hero sought to be recovered, and during which time appellees continued to hold stock in the company. Having failed to collect the amount alleged to be due from the company, this suit was instituted against appellees for the recovery thereof under the provisions of the statute hereinbefore referred to.
Two propositions are relied upon by the appellees in support of the judgment of the court below: First, that, notwithstanding its defective organization, the Marshall Drug Company was and is a de facto corporation, and its right to do business as such can be called in question only by the state in a direct proceeding instituted for that purpose ; second, the declaration shows on its face that appellees were neither the organizers of the Marshall Drug Company, nor were they officers, agents, or employees thereof, but, on the contrary, were mere inactive stockholders, and therefore were not doing business under its charter within the meaning of the statute. It is further contended for appellee Wilkerson that he never became a stockholder in the corporation and cannot be said to have been doing business under its charter, for the reason that his attempted purchase of stock therein occurred *677more than thirty days after the corporation’s organization, and, consequently, at a time when it had ceased to exist as such.
The first of these contentions, in so far as the liability vel non of appellees is concerned, is disposed of adversely to them by the express language of the statute.
We have been unable to discover any merit in the contention that the only persons who do business under the charter granted to a corporation are its officers and agents. The principal object sought to be accomplished by the creation of a corporation is that those persons who become stockholders therein may do business under the restricted liability imposed by its charter. The business in which a corporation is engaged belongs, in the last analysis, to its stockholders, who are entitled to receive all the net profits realized therefrom; the officers of the corporation being in reality only the agents of the stockholders for conducting the business.
It is true that, when appellee Wilkerson purchased his stock in the Marshall Drug Company, it had lost its right to do business as a corporation; but nevertheless he thereby acquired an interest in the business in which the company was engaged, and thereafter, with his associates therein, continued to conduct the same under the company’s void charter, so that he comes within the express language of the statute and must be held liable.

jReversed and remanded.