Railroad Gazette v. Wherry

Rombaueb, P. J. This is an action to hold the defendants liable as partners for the cost of an advertisement by defendant Wherry in a newspaper owned by plaintiff in the city of New York. The defendants filed an answer denying the partnership under oath. Upon the trial of the cause before a jury the plaintiff recovered judgment against the defendants Wherry and [425] Barnes, but judgment was rendered in favor of the defendants, Johnson and Cram, and the plaintiff appeals. The respondent defendants are. sought to be held liable on the theory that they were the projectors of a a corporation, and contracted the bill sued on before the corporation was fully organized, and hence must be held to have contracted as joint obligors without any corporate immunity as to the extent of their liability. That such is the law has been decided in the cases of Hurt v. Salisbury, 55 Mo. 310; Richardson v. Pitts, 71 Mo. 128; and Martin v. Fewell, 79 Mo. 401. In Granby Mining Co. v. Richards, 95 Mo. 106, however, the rule established in Hurt v. Salisbury, supra, is limited, and held properly applicable only to cases where some necessary step in the process of incorporation has been omitted. Now, in the case at bar, the corporation, according to plaintiff’s evidence, was fully organized. The plaintiff offered in evidence the certificate of the secretary of the state of Illinois, purporting to show that a final certificate of incorporation was issued to the Keystone Car Coupler Company (in whose name the bill herein sued for was contracted) as early as August 19, 1889, whereas the bill sued on was not contracted until September 18, 1889. It is true the plaintiff claims that such certificate was not recorded in the recorder’s office •of St. Clair county, Illinois, where the corporation was situated, until after the contraction of the bill, and that such record was essential to secure corporate immunity to the defendants. The difficulty with this argument is threefold. First, it nowhere appears, •except by the vaguest inference, that this certificate was not recorded in St. Clair county, Illinois, prior to September 18, 1889; secondly, it nowhere appears that such record was essential to a complete corporate existence; [426] thirdly, it nowhere appears that it was a necessary step-in the process of incorporation. Hence, even if the necessity of antecedent record and its failure were shown by the bill of exceptions, it is, to say the least, doubtful whether such facts, under the decision of the supreme court in Granby Mining Co. v. Richards, supra, would render the defendants individually responsible as partners for a bill contracted in the corporate name-after the issue of the final certificate of incorporation. There is, however, another obstacle to the plaintiff's, recovery against the defendants, Johnson and Oram. It nowhere appears that these defendants ever authorized Wherry, who contracted the bill as president of the corporation, actual or proposed, to contract any such bill or to make any contract whatever. Wherry, as far as this record shows, never was either elected or selected as agent of these defendants, or as president of the corporation, by any one. As far as the record shows, he assumed to act without any legal warrant whatever to-bind any one but himself. These defendants, as far as the record shows, never participated in any corporate meeting and never derived any benefit whatever from the corporation. In that respect the case is essentially different from the three cases above cited, decided in this state. It can not be contended that anyone, who-participates as a projector, in the organization of a proposed corporation can be held individually liable for every contract which any other projector sees fit to-make in the name of the contemplated corporation, although such contract is made without the authority, sanction or knowledge of the party thus sought to be held liable. If a case of that kind is conceivable at all, the liability could be supported only on some element of estoppel, which is wholly missing in this case. The plaintiff concedes that it knew neither Johnson nor Cram, and did not know that any such men were in [427] existence. It contracted on the faith of the credit of a supposed corporation, and on the faith of no other credit. As all the evidence in the case, viewing it in th.e light most favorable to plaintiff, shows no right of recovery against the defendants, Johnson and Cram, the judgment in their favor is a necessary conclusion of law and must be affirmed. Judge Bond concurs.' Judge Biggs is absent.