Citizens Bank of Clinton v. Jones

Cassoday, C. J. It is contended that the mortgage is void as to the homestead on the ground that it was never executed or acknowledged by Mrs. J ones. The claim is that at the request of her husband she was induced to sign a blank form of mortgage on his representation that it was to be used for the accommodation of the bank and did not concern her in any way; and that subsequently, and without her knowledge or consent and in her absence, it was filled up and signed by the — 451 — two witnesses and certified by tlie notary public. Tbe testimony of Mr. and Mrs. Jones tends to siipport such claim. Mr. Herron, one of the witnesses to the mortgage, testified to the effect that he was a bookkeeper in the bank February 17, 1896; that he knew Mr. and Mrs. Jones; that he recognized his signature as one of the witnesses to the mortgage; that he signed as such witness in the presence of Mrs. Jones, and at the same time that the other witness, H. A. Moehlenpah, signed. Mr. Moehlenpah, who signed as a witness, was also the notary public who took the acknowledgment, and he testified to the effect that the mortgage handed to him was in the handwriting of Mr. Jones; that it was executed by Mr. and Mrs. Jones; that they were both personally known to him; that they acknowledged the same before him; that the mortgage belonged to the bank; that his recollection was that he signed the mortgage as a witness at the bank; that he wrote it in the presence of Mrs. Jones, and that at the same time he took the acknowledgment of the mortgage; that he was in the bank, attending to business, on the date of the mortgage, February 17, 1896, all day, he was sure. The certificate of acknowledgment is in the usual form. If it is true, Mr. and Mrs. Jones both appeared before the notary, to whom they were known to be the same persons described in and who executed the mortgage, and acknowledged that they executed the same. - The official duty of the notary required him to make a truthful certificate. He was acting under the sanction of an oath, and was liable in damages for misconduct or neglect of duty. ‘Secs. 174, 180, Stats. 1898. The evidence is ample to support the finding that Mr. and Mrs. Jones both executed the mortgage and, after its execution by them, duly acknowledged the same. Especially is this so in view of the well-established rule that, to set aside a deed or mortgage duly witnessed and acknowledged, the evidence must be clear, satisfactory, and convincing beyond a reasonable controversy. Larson v. Pederson. 115 Wis. 191, 91 N. W. 660; Linde v. — 452 — Gudden, 109 Wis. 326-328, 85 N. W. 323, and cases there cited. 2. It is claimed that the mortgage is void because taken in a business prohibited by law. The certificate of incorporation, issued in 1882, in pursuance of the statute, stated that the association would terminate July 15, 1887. Subsec. 19, sec. 2024, Stats. 1898. The statute also declared that “no person or association shall commence or carry on the business aforesaid until such person or association shall have complied with the provisions of this act.” Subsec. 21, Id. It will be observed that none of the provisions of the statute declare such contract void, nor impose a penalty for doing such business. Another provision of the statute declares that: “All corporations whose term of existence shall expire by their own limitation . . . shall nevertheless continue to be bodies corporate for three years thereafter for the purpose of prosecuting and defending actions and of enabling them to settle and close up their business, dispose of and convey their property and divide their capital stock, and for no other purpose.” Sec. 1764, Stats. 1898. In support of the construction and the effect which it is claimed should be given to these statutes, counsel cité certain decisions of this court. In the earliest case cited it was held, in effect, that a foreign insurance company, which had attempted to do business in this state in violation of'the statute, which imposed a penalty for noncompliance, could not maintain an action upon a contract made with the company; and this was put on the ground that “a statute which imposes a penalty for doing an act, except as prescribed, amounts to a prohibition to do the act otherwise, and a contract for its performance is void.” Ætna Ins. Co. v. Harvey, 11 Wis. 394. See Washburn Mill Co. v. Bartlett, 3 N. D. 138, 54 N. W. 544, 545. The other cases in this court cited by counsel involve the effect of a prohibition in the statute coupled with a penalty. Brower v. Haight, 18 Wis. 102; Melchoir v. Mc — 453 — Carty, 31 Wis. 252; Clark v. Lincoln L. Co. 59 Wis. 655, 18 N. W. 492. Such rulings are in harmony with more recent decisions of this court. Land, L. & L. Co. v. McIntyre, 100 Wis. 245, 75 N. W. 964; Ashland L. Co. v. Detroit S. Co. 114 Wis. 66, 76-78, 89 N. W. 904; Pietsch v. Krause, 116 Wis. 344, 93 N. W. 9. In the case at bar the action is not brought by the association of which the charter expired in 1887, but by the association which was incorporated in 1898. Had it been brought by the former, there would have been authority for holding that the action could not be maintained, for the reason that the corporation had expired by limitation, and was dead. 1 Thompson, Cbm. Law Corp. §§ 530-533. But there are adjudications holding that the question whether the charter had expired by limitation could. not be adjudicated collaterally, but only in a direct proceeding by the state. Id. See, also, Searcy v. Yarnell, 47 Ark. 269, 1 S. W. 319; Oregonian R. Co. v. Oregon R. & N. Co. 23 Fed. 232. This court held several years ago that “one who executes a deed to a body claiming to be a corporation Is estopped from denying its corporate character to defeat the instrument.” Whitney v. Robinson, 53 Wis. 309, 315, 316, 10 N. W. 512, and cases there cited. See, also, Skinner v. Richardson, B. & Co. 79 Wis. 464, 468, 45 N. W. 318; Ricketson v. Galligan, 89 Wis. 394, 399, 62 N. W. 87; Slocum v. Head, 105 Wis. 431, 81 N. W. 673; Franke v. Mann, 106 Wis. 118, 81 N. W. 1014; Gilman v. Druse, 111 Wis. 400, 87 N. W. 557. The text-writer above cited also declares that: “A party who enters into a, written contract with a body purporting to be a corporation, in which it is described by its corporate name, solemnly admits the existence of the corporation for the purposes of a suit brought to enforce the obligation, and in such an action he will not be permitted to plead nul tiel corporation, or otherwise to deny the corporate existence of the plaintiff.” 1 Thompson, Com. Law Corp. § 518, citing a large number of cases in support of the rule stated, and giving illustrations in the following sections. — 454 — The latest edition of the Encyclopedia of Law declares that: “A person who contracts with a corporation, whether it be by a subscription to its stock, or by promissory note, bond, mortgage, or other form of contract, is, in a suit upon such contract, estopped to deny the existence of the corporation; and similarly, where a body of persons hold themselves out as a corporation and contract as such, they will be estopped to deny their corporate character.” 7 Am. & Eng. Ency. of Law (2d ed.) 668. It has been held by the supreme court of the United States that “one who contracts with a corporation as such cannot afterwards avoid the obligations so assumed by him on the ground that the supposed corporation was not one de jure.” Andes v. Ely, 158 U. S. 312. See, also, Dooley v. Cheshire G. Co. 15 Gray, 494; Beal v. Bass, 86 Me. 325, 29 Atl. 1088; Scheufler v. Grand Lodge, A. O. U. W. 45 Minn. 256, 47 N. W. 799; Snider's Sons’ Co. v. Troy, 91 Ala. 224, 8 South. 658, 24 Am. St. Rep. 887; Bank of Shasta v. Boyd, 99 Cal. 604, 34 Pac. 337. In this last case it was held that: “A mortgagor of property, who has dealt with the mortgagee as a corporation, and received from it the consideration of the mortgage note, is estopped from denying its corporate capacity in an action by the corporation to foreclose the mortgage.” In a recent case in this state it was held that: “Where a person deals with an association of individuals as a corporation, such dealing, by estoppel, as to such transaction, fixes the status of the company to be what, it was represented and recognized to be therein.” Clausen v. Head, 110 Wis. 405, 85 N. W. 1028. Without determining whether the payee of the note and mortgage was, at the time of their execution, a de facto corporation within the meaning of the authorities, yet we are constrained to hold that both Mr. and Mrs. Jones, by the execution and delivery of the mortgage, are estopped from — 455 — maintaining- that what their counsel call the aggregation known as the “Citizens Bank of Clinton” had no corporate existence at the time the note and mortgage were given, February 1Y, 1896. Under some of the authorities cited the same is trae if we regard the body of persons composing such aggregation, and who, as found by the court, owned the assets of the association at the time, as simply holding themselves out as a corporation, and contracting as such in taking the note and mortgage in question. There can be no doubt but that the assets of the association, including the note and mortgage, passed to and became the property of the new corporation, the plaintiff in this action. By the Oourt. — The judgment of the circuit court is affirmed.