Harrod v. Hamer

Dixon, 0. J. The theory upon which this action is prosecuted is, that the subscribers to the articles of agreement and association did not, by the steps and proceedings taken, become or constitute a body politic and corporate, under the name assumed by them in their articles, but that they failed altogether of organizing and establishing a corporation under the provisions of the statute as they attempted and intended to do. The supposition is that no corporation was created, and hence that the subscribers, who were shareholders or owners of the supposed capital stock, became a sort of unincorporated joint stock company, or quasi firm or partnership, and so liable in their [166] individual capacity, either jointly or severally, directly to the creditors of the company or association. We are of opinion that this view of the transaction is entirely erroneous, ai)d that a corporation was organized and set in motion with which creditors and others must deal as a corporation, and against which, and against the stockholders in which, claims and demands must be enforced as in case of other like corporate bodies. The corporation was organized under the provisions of chapter 73 of the Revised Statutes. 1 Tay. Stats., pp. 982 to 987, §§ 1 to 29, inclusive. . It is not objected or shown that any requirement of the statute was omitted or not complied with, except only that the certificate prescribed by section 17 (§ 19, Tay.'Stats.) was not made and deposited with the secretary of state, and a duplicate with the town, village or city clerk, as therein directed. The only question, therefore, is, whether this failure of the president and directors to make and deposit the certificate and duplicate operated to defeat the organization or to annul the proceedings by which the corporation had been brought into existence. The very words of the section are a sufficient answer. “Before any corporation, formed and established by virtue of the provisions of this law, shall commence business, the president and directors thereof shall cause their articles of association to be published,”etc., and “shall make a certificate,” etc. It would not be easy by any words to recognize the existence of the corporation, without the publication and without the certificate, or before they are made, more clearly than has been done here. The corporate existence is clearly acknowledged, and intended so to be, and the prohibition is only against its commencing business until the requirements of the section are complied with. It is spoken of as a corporation formed and established by virtue of the provisions of the law, and having officers such as the law prescribes, namely, a president and board of directors, capable of acting for the corporation, and upon whom, in their official [167] capacity, certain duties are therein specifically imposed, and their performance commanded. But, if anything further be needed upon this point, it will be found in the provisions of section' twenty-three of the same chapter. That section reads: “ If the president, directors, or secretary of any suck corporation shall intentionally neglect or refuse to comply with the provisions of, and to perform the duties required of them respectively by, the seventeenth, eighteenth and nineteenth sections of this chapter, such of them so neglecting or refusing shall jointly and severally be liable in an action founded on this chapter, for all debts of such corporation contracted during the period of any such neglect and refusal.” The intention that the corporation should not be affected, or its powers or existence destroyed, by reason of any failure to comply with the requirements of section seventeen, is here again very plainly manifested. It is again spoken of and treated as a corporation lawfully organized and still continuing, notwithstanding such failure. It is regarded as a corporation fully capable of contracting debts, and having officers of whom the performance of certain duties has been and still may be lawfully required. And to the like effect are the provisions of section twenty-four and perhaps others. The views here expressed are sustained by the case of Holmes v. Gilliland, 41 Barb., 568. It follows from these views that the plaintiff has misconceived his remedy, and that this action cannot, be maintained against the appellants as stockholders, and who hold no other relation to the corporation. The remedy of the plaintiff to enforce payment of his judgment, in addition to that given by the statute against the president and directors of the corporation, will probably be found by consulting the case of Adler v. Mil. Pat Brick Man. Co., 13 Wis., 57. The complaint alleges that the debt for the nonpayment of which the plaintiff recovered judgment against the corporation, [168] accrued and became due to tbe plaintiff for work and labor performed by him for tbe corporation; but it is nevertheless not claimed that tbe cause of action falls within the provisions of section twenty-five of the statute, or that the plaintiff is pursuing the remedy given by that section. It does not distinctly appear that the debt was one of the kind therein provided for, or that the plaintiff was a “laborer.” It is not shown that any demand was made, as prescribed by that section. The judgment against the defendants Hamer and Schneider, who bring this appeal, must be reversed, with costs, and the cause remanded with direction that it be dismissed as to them. By the Court. — It is so ordered.