Court Opinion

ID: 6640749
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:45:06.098594+00
Date Added: 2024-06-11T15:59:13.687206
License: Public Domain

Atwateb, J.,
Dissmlmg. — If tbe refusal of tbe Court in tbe first instance to receive tbe articles of association in evidence was error, I think it was cured by their admission afterwards. Tbe Plaintiffs then bad, if not tbe same benefit wbicb they would have derived bad they been admitted in the first instance, at least all they can derive from them on a new trial. For, although tbe Plaintiffs bad dismissed their action as against some of tbe Defendants, tbe granting of a new trial could not restore tbe Plaintiffs to their original position as regards those Defendants. Tbe objection is therefore untenable as a gTound for new trial.
Tbe only point requiring consideration on this argument, is tbe exclusion of certain evidence in the Court below, offered by tbe Plaintiffs counsel. To judge of tbe correctness of tbe ruling of tbe Court, on tbe offer made in regard to this evidence, it will be necessary to consider tbe pleadings, and evidence in tbe case at tbe time tbe offer was made.
Tbe complaint alleges tbe existence (at tbe time the cause of action arose) of a company or association, known as “ Tbe St. Anthony Falls Steamboat Company,” engaged in tbe business of steamboat navigation, of wbicb company tbe Defendants were members. Tbe effecting of the insurance, and giving tbe note, are alleged to have been the acts of tbe company, (through their agent), and no liability on tbe part of any of tbe Defendants (except it may be tbe alleged agents) is shown, except as they were connected with this company. Tbe establishment of tbe fact, therefore, that such company as is named in tbe complaint, was organized and acted, lies at tbe very foundation of tbe cause of action, and without wbicb tbe Plaintiffs cannot sustain tbe action.
To prove this fact, tbe Plaintiffs offered in evidence, the *49original articles of association of the “ St. Anthony Palis Steamboat Company.” These articles purported to have been signed by the most of the Defendants, and contain provisions defining the objects of the company, the manner of its organization, the duties of the officers, how its business shall be conducted, &c. So far as this evidence goes, it was doubtless proper to be received for the purpose of establishing the fact sought to be proved, namely, the formation and organization of the company alleged in the complaint. But it was only one step towards accomplishing that object. The paper itself only shows that the persons whose names were subscribed thereto (admitting the signatures to be genuine) had agreed to associate themselves together, for the accomplishment of a certain object, to be attained by a certain course of action prescribed by the articles of association. Whether this, or any other course of action was in fact taken by the parties signing the articles towards organizing the company, the árticles themselves do not show. That fact must appear from evidence ab extra. And until such organization is proved, the Plaintiffs fail in showing the existence of a company, or rather of the company described in the complaint, which is an organized company. Eor although such fact is not alleged in direct terms, yet from the nature of the business, the place or places where it must be transacted, and the number composing the association, it is manifestly absurd to suppose they were each personally to engagein.it, aside from the provisions in the articles for an organization. The company must necessarily act through its organs, or agents, and until such manner of action is provided for, the persons signing the articles are not a company capable of doing the business named in the complaint, and consequently not actually doing the business, nor could they be made liable for the acts alleged, which are necessarily those of an organized company. And if the existence of the company be not established, it is manifestly improper to receive any evidence of the acts of persons signing the articles of association, the object of which is, to bind those and other Defendants as a company, and which might have the effect to bind them as a company, after it was once created and organized.
*50It is urged by tbe counsel for the Plaintiffs that “ whether the company had been organized or not, was wholly immaterial to third persons, the partnership had been formed and that was sufficient for the Plaintiff’s purpose.”
Whether this statement, as an abstract proposition, may be correct or not, it is not tenable under the pleadings and proof in this action, as the same stood at the time the offer of the evidence was made. Eor whatever may have been the actual relation of the Defendants to third persons by reason of their acts in the premises, the Plaintiffs had sued them as a company — an organized company, and cannot abandon that ground, and hold them responsible in some different capacity. Nor is it true that when this evidence was offered, it had been shown that a partnership had been formed, for the only evidence offered showing a partnership (so far as appears from the record) was the original articles of association, and whether that association when completed, be termed a partnership or otherwise, we have seen above, that no proof was offered, that anything further was done under the articles than signing the same. The terming the association a partnership, cannot change the kind or degree of proof required to fix the liability of the members, and the articles themselves only show the in-iatory step taken towards forming the partnership. Eor the same proof which showed the adoption of this first step, also showed that certain others were to be taken in order to the attainment of the object in view, and the Plaintiffs are not at liberty to adopt that part of the proof offered by them, to prove the agreement of the persons signing to form a company or partnership, and reject that part showing how the organization was to bo perfected, much less to claim that they should not be required to furnish any evidence' whatever, that the company or partnership had been organized or perfected. They may not be confined necessarily to this species of proof to establish the allegations of the complaint, but if they adopt it, they cannot complain that they should be bound by it as a whole, not claiming the benefit of such parts as may prove advantageous to themselves, and rejecting the balance.
It is further claimed by the counsel for the Plaintiffs, that the articles show upon their face that an organization had been *51effected. The article relied upon to sustain this position is tbe eleventh, which provides that “ the officers of this company shall hold their respective offices one yeai-, or until their successors shall be elected, and the present officers this day elected shall hold their offices until the first Monday in January, 1856,” &c. In order to give this provision the effect claimed for it, it must be held to mean that the officers were elected on that day previous to the signing the articles. Eor otherwise it would only amount to an agreement or understanding among those signing the articles, that officers were to be elected, in which case it would require evidence beyond the articles themselves, to show whether the understanding was ever carried into effect. But I do not think the fair construction of this article shows that officers had been elected at the time of the adoption of the articles by the persons signing the same. The usual and regirlar course in such cases, as is well known, is the adoption of rules for the transaction of business and then to proceed to act under them. In this case such would seem to have been the necessary course adopted, since the instrument provides that “each subscriber shall specify the number of shares he binds himself to take and pay as hereinafter specified, and for the election of officers each shai-e shall be entitled to one vote,” etc. Consequently, until the signing of these articles, by which each subscriber was required to specify the number of shares he would take, and by which the vote for officers was regulated, no rule could have existed tor the election oí officers. Add to this, that article second provides for certain officers to l>e elected, and the instrument itself shows that the rules or articles, werejhen adopted by the signing the same, and the conclusion is almost irresistible, that the fair construction and meaning of said eleventh section is that officers were to be elected that day after the adoption of the rules. But the article itself only shows the existing understanding, and is no more proof that such understanding was actually carried into effect, than that every other matter and thing provided to be done by the articles, were actually accomplished as therein specified were to be done.
Referring now to the offer of the Plaintiffs to introduce certain evidence, (quoted in-the opinion filed by his Honor, Jus*52tice Flandrau,) let us examine its nature and effect, and whether admissible under the pleadings and proof as the same then stood. The Plaintiffs offer to show that certain of the Defendants, after signing the articles, assumed to act in the name of the company, went on and contracted for the building of a boat to be called the Falls City, that the boat was built under and pursuant to that contract, and accepted by certain of the Defendants, members of the company, &c. Is this evidence admissible with the view of showing the formation or organization of the company, of the initiatory step, towards which the Plaintiffs had already introduced evidence ? Clearly not, for there is nothing in the nature of the evidence offered, tending to prove such fact; and even had such been the case, unless it had been in accordance with the manner of organization prescribed by the articles of association, it would have been inadmissible for such purpose, as being contradictory of the proof already offered by the Plaintiffs, as to how the company should be organized, and do business. Nor is it admissible, as showing the existence of a company other than that which the evidence already offered showed had commenced its formation ; for the acts offered to be proved are based and dependent upon the action of the parties, which the proof showed had been had with reference to signing the articles of association. Throw out that proof, and the evidence offered has no significance whatever. From an examination of the whole offer, it will be perceived that it is based upon the assumption that a compm/y already existed, when the acts offered to be proved were performed, which is a fallacy as I think has already been shown. "Whether the evidence offered would have the effect to render the Defendants liable individually, or in any other manner than as an association or company, it is unnecessary to inquire, since the complaint only seeks to charge them as a company and in such capacity. If the Plaintiffs abandon them ground, that any company was actually formed, and seek to hold the Defendants as individuals, on the ground that they have made or consented to a certain contract, incurring thereby a liability, it will remain tor the Court to consider the effect of such proof, when the pleadings are so changed as to render it admissible. The Defendants are called upon to respond as, and *53in the capacity of a company, and tbe offer to sbow that certain persons assumed to do acts in the name of a convpcmy, and that other persons assented to such acts, is not legal proof, that the company described in the complaint, was in fact ever formed and organized. The offer to show that “several members had assumed to act for the rest,” is an assumption, instead of proof, of the very point at issue, as the existence of the company must be shown, before it can be claimed that there were “ members ” of the company. "Whether the evidence would have been proper to show the liability of the company, had its existence been first established, it is unnecessary to consider, as I think it was properly excluded for the reasons above mentioned.