Georgeson v. Caffrey

MEKWTN, J. The appellant claims that the order substituting 'him as defendant was erroneous. ¡No appeal, however, is taken from the order itself, it is not specified in the notice of. appeal, and no motion appears to have been made by him to set it aside. He is not, therefore, in a position to review it. There is no evidence in the case that the certificate of incorporation was not filed in the office of the secretary of state. Proof of filing and recording in the county clerk’s office and of user would ordinarily be [973] sufficient proof of incorporation, without proof of filing in the office of the secretary of state. Bank v. Willard, 25 N. Y. 574. If the plaintiff sought to show that the certificate never became effectual, it was for him to show the omission which produced that result. The court, I think, erred in presuming it was not filed as required by law, and it looks to me very doubtful whether the plaintiff can, for the purpose of throwing a personal liability upon members, himself claim that the incorporation, or attempted incorporation, is invalid by reason of the circumstance that he and his associates engaged in a business that the act did not allow. See Foster v. Moulton, 35 Minn. 458, 29 N. W. Rep. 155. Assuming, however, that the Empire Mutual Union was an unincorporated association, having seven or more members, and that the plaintiff is in a position to take advantage of the fact, it does not follow from that fact alone that the plaintiff is entitled to the benefit of the provisions of section 1919 of the Code. According to the ruling in McCabe v. Goodfellow, 133 N. Y. 89, 30 N. E. Rep. 728, the plaintiff, to maintain the action, must allege and prove, and it must be found, that all the members of the association were liable either jointly or severally to pay his claim. Does the evidence in this case authorize the finding that all of the members are personally liable to the plaintiff? The plaintiff was himself one of the members, and his associates did not become liable for his claim unless they, in effect, agreed to become so. There is no evidence of any such agreement on their part. The members, besides their admission fees, were required to pay certain monthly dues, nothing else was required of them, and, if they did not pay as required, they ceased to be members. True, the trustees were by the by-laws authorized to employ a manager at a reasonable salary, but the payment of this and the other expenses of the society was provided for out of a fund raised in a particular way, and called the “General Fund.” Concerning this the plaintiff testified: “The general fund was the expense fund. There was no separate expense fund, but the expenses were paid out of the general fund. * "* * Officers were paid out of the general fund. That includes me as general manager. The general fund was created in this way: admission fees and fines and first month’s dues, 20 per cent, of all monthly dues, and 10 per cent, of benefit fund for collection.” It is very clear that the trustees were not authorized to pledge the individual credit of the members, nor did the plaintiff have the right to expect any such thing, and there is no evidence that he did expect any such thing. He and his associates Had formed, or attempted to form, a corporation, and the inference is that on the 1st December, 1890, when plaintiff was appointed manager, they supposed that a corporation existed. As between the members, no partnership existed, for there was no agreement expressed or implied to that effect. See Lafond v. Deems, 81 N. Y. 514. The failure to incorporate did hot make the members partners. Bank v. Pendleton, (Sup.) 9 N. Y. Supp. 46, affirmed 129 N. Y. 662, 30 N. E. Rep. 65, and cases cited. There [974] was no capital or stock, and no basis for saying that it was a joint-stock company. It was apparently a mutual- aid association, with fluctuating membership, liable to be diminished by lapsing, and increased by new, members. The case shows that when plaintiff was appointed manager there were about 200 members, and at the commencement of the suit about 600. If these views are correct, the plaintiff failed to make a case within the rule laid down in the McCabe Case, and the motion for nonsuit should therefore have been granted. Judgment and order denying motion for new trial reversed on the exceptions, and new trial ordered, with costs to abide event. All concur.