McClinch v. Sturgis

VrRGiN, J. The plaintiff contends that the defendants failed to incorporate themselves in accordance with the constitution and laws of Rhode Island, whence the charter emanated. There is no doubt but that an act to incorporate the "Northern Mining Company” was passed by the general assembly of Rhode Island, June 8, 1865. This fact is proved by a copy thereof, attested by the secretary of the State. The act itself contains no conditions. Reference is made in the report of the plaintiff’s printed evidence to sundry provisions in the constitution and laws of Rhode Island, but none of them arc contained in the report. But assuming that the constitution does provide that when any bill is presented for an act of incorporation like the one in question, it shall be continued till another election of members of the assembly shall have taken place and public notice of the pendency thereof given, it does not necessarily follow that the organization under the charter is not as to all practical purposes valid. The provision is directory to the assembly, and in the absence of any clause forbidding the enactment, does not affect the corporators unless the State itself intervenes. Whitney v. Wyman, 101 U. S. 392, 397. The State may waive conditions, and so long as the State raises no objection, it is immaterial to other parties whether it is a corporation defacto or dejure. Ibid. It is further urged that public laws, R. I. 1857, c. 2, §8 require a certain published notice in a newspaper, printed where the corporation is to be located, and at a time therein specified. The answer is that this provision, being a mere act of the assembly, cannot bind any subsequent session thereof; for the power which [296] prescribes the formalities to be observed in order to create a corporation, is able to dispense with them. Blade Riv. R. R. Co. v. Barnard, 31 Barb. (N. Y.) 258. Moreover there is no evidence in this case that all these provisions have not literally been complied with. On the contrary, being preliminary in their character the presumption is that they were. Narragansett Bank v. Atlantic Silk Co. 3 Met. 287 ; Penobscot Boom Corp. v. Lamson, 16 Maine, 224, 230. At any rate we cannot presume that the general assembly and governor acted in contravention of the constitution and laws of the State. It is also urged that the public laws of 1863, E. I., c. 475, prohibits this charter " taking effect until the persons therein incorporated shall have paid to the general treasurer the sum of $100.” This, however, is a matter between the State of Ehode Island and the corporators. Whether the sum was paid or not the case does not disclose. The presumption is that it was. Moreover we have the high authority of the Supreme Court of that State, for declaring that the statute last named was repealed by Glen. Stat. E. I. c. 261, § 12; and that the charter, although enacted while the repealed statute was in force, is not for that reason invalid. Hughesdale Manf Co. v. Vanner, 12 R. I. 491. It is further contended that the proper notice for the first meeting of the corporators was not served upon "each corporator” as is required by stat. R. I. c. 125, § 3. Whether there is such a statute, does not appear. But assuming there is, the organization is not defective for that reason. Newcomb v. Reed, 12 Allen, 364; Walworth v. Brackett, 98 Mass. 98, 100; Ossipee H. & W. Manf. Co. v. Canny, 54 N. H. 295-312, and cases there cited. It appears by the record of that meeting that it was held at the "office of Albert Dailey & Co. in the city of Providence, July 28, 1865.” The notice is formally recorded. No objection is made to its form. It is addressed "Dear Sir.” The record recites (as printed) : "Pursuant to the following notice delivered to 'such corporation,’ seven days prior to this date, viz.” etc. Now it is evident that the words "such corporation” are a misprint, for " each corporator” or that the person who wrote them [297] into the record from the minutes of the secretary made the error. But assuming the record as printed is -according to the fact, and still the authorities last cited uphold the organization as against this objection. "There is no question,” says Hoab, J. in Newcomb v. Reed, supra, "that the corporate powers which it (charter) conferred were assumed by the persons by whom it was intended they should be enjoyed, so far as they chose to avail themselves of them. The organization was not strictly regular, but can hardly be considered even as defective. . . "It (statute) is directory merely, and only designed to secure the rights conferred by the charter to those to whom it was granted, among themselves, by providing an orderly method of organization. . . The evidence was ample to show that the persons named in the act of incorporation with their associates, or at least all of them who desired to do so, have accepted the act, organized under it, issued stock, elected officers who have acted and served in that capacity, carried on business, contracted debts, and exercised all the functions of corporate existence. It is therefore too late to deny that the corporation never had a legal existence.” Say the court in Ossipee H. & W. Manf. Co. v. Canny, supra, "If neither the grantors of the charter (i. e. the State), nor any of the grantees complained of the defect in the preliminary notice, it would seem that the objection could not be subsequently raised by this defendant who has taken stock in the corporation thereby recognizing the corporate existence and manifesting the purpose to participate in the profits thereof.” See also Whitney v. Wyman, 101 U. S. 392, 397 and cases cited. These cases are applicable to the case at bar. To be sure the plaintiff was not one of the corporators, but he was elected an associate at the first meeting, was present when the articles of association were drawn, must have known their contents and that they were but preliminary to an act of incorporation. And after his return and he had learned all the facts, he sued the "Northern Mining Co.” alleging in his writ that it was a "corporation duly established by law, having its office in Augusta,” recovered judg [298] ment and made a valid contract in relation thereto upon the docket. We fail to perceive how he can now expect to establish the non-existence of the corporation. If the corporation is established this bill cannot be sustained. Whether he might maintain a creditor’s bill and secure his claim against such of the stockholders as have not paid for their stock, if there be any such, We have no occasion to inquire under this bill. Bill dismissed with costs. AppletoN, C. J., WaltoN, Petebs and Symonds, JJ., concurred. Libbey, J., did not sit.