Cahall v. Citizens Mutual Building Ass'n

61 Ala. 232
CourtSupreme Court of Alabama
DecidedDecember 15, 1878
StatusPublished
Cited by24 cases

This text of 61 Ala. 232 (Cahall v. Citizens Mutual Building Ass'n) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cahall v. Citizens Mutual Building Ass'n, 61 Ala. 232 (Ala. 1878).

Opinion

BBICKELL, C. J.

These causes, involving the same questions, were argued and submitted together. The assignments of error, relatingto the admission of evidence, the giving and refusal of instructions to the. jury, present the same questions — the corporate existence of the appellee, its capacity to hold real estate otherwise than by way of mortgage, or as security for debt, and the sufficiency of the conveyance under which the appellee deduces title to the premises in controversy, to pass the homestead of the grantor.

The conveyance is made directly to the appellant by its corporate name. The general rule is, that whoever contracts with a corporation, in the use of corporate powers and franchises, and within the scope of such powers, is estopped from denying the existence of the corporation, or inquiring into the regularity of the corporate organization, when an enforcement of the contract, or of rights arising under it, is sought. [242]*242Mont. R. R. Co. v. Hurst, 9 Ala. 513; Marion Savings Bank v. Dunkin, 54 Ala. 471; Lehman, Durr & Co. v. Warner, in manuscript. The appellant concedes this rule, but insists that it can not be applied to a corporation formed under the provisions of a general statute, requiring certain acts to be done before the corporation can be regarded as in existence, and capable of exercising corporate power. Whatever acts the general statute requires should precede incorporation, the argument is, must be shown affirmatively by the appellee, under the plea of nul tiel corporation, or it can not maintain a standing in court. How far in this respect, a distinction can be drawn between a corporation deriving its existence and powers under a special legislative enactment, and a corporation formed under a general enactment, the case does not require us to decide. *

The declaration for the formation of this corporation, signed by the corporators, and which became its charter, recites the title of the corporation, the purposes and objects for which it was formed, the amount of its capital stock, the number of shares into which it was divided, the value of each share, and the time of payment by each shareholder of the capital stock, of the amount he had subscribed. The second section or article of the declaration is in these words : The purposes and objects of the association are hereby declared to be, to purchase, hold and convey real estate; to loan money thereon to members of the association for building purposes, to be secured by a lien on the land and buildings; to rent and dispose of such property when acquired, in such form and manner as by the by-laws of the association may be provided.” The fourth section, among other things, provides that the association may proceed to active operations when one hundred shares of the capital stock are subscribed and the first assessment paid. The declaration was signed by subscribers for one hundred shares of the stock, acknowledged by the subscribers before a notary public, who duly certified the same, filed in the office of the judge of probate on the 21st day of September, 1871, in the office of the Secretary of State on the 23d day of September, 1871, and a certified copy recorded in the office of the judge of probate on the 26th day of September, 1871.

It was said there was no law then of force authorizing the formation of a corporation for the purposes and with the powers expressed in the second article of the declaration. The Code of 1867, § 1755, expressly authorized the formation and incorporation of building and loan associations, and as [243]*243amended by the act of March 3d, 1870, it extended not only to building and loan associations, but to an association for any laioful enterprise, not inconsistent with the constitution and laws of this State. — Pamph. Acts, 1869-70, 308. The formation of corporations under general laws, rather than by special legislative enactment, has been for a number of years past a favorite public policy, as indicated by constitutional provision and legislative enactment. The constitution of 1868, interdicted the creation of corporations for other than municipal purposes, by special act, and in any other mode than by a general law. When the statute amendatory of section 1755 was enacted, there were general laws authorizing the formation of nearly every kind of private corporations. A manifest purpose of this statute expressed not only in the general terms we have quoted, but in the express exclusion from its operation of associations for carrying on gift enterprises, lotteries or games of chance of any hind whatever, was to authorize the incorporation of any association for any lawful business or enterprise. Nor is there any conflict with, or inconsistency between the purposes and objects of this association as expressed in the second section of the declaration, and the provisions of the act of March 3d, 1870, declaratory of the objects, powers, and rights of building and loan associations. — Pamph. Acts 1869-70, p. 444. A power conferred on every private corporation by the statute then existing, was, “ to hold, purchase, dispose of, and convey such real estate as is limited by it's charter; and if not so limited, such an amount as the business of the corporation requires.” B. C. § 1767. The declaratory act in reference to building and loan associations, does not abridge the capacity conferred by this general statute on them as corporations, when incorporated under the general law, to take, and hold, and dispose of, or convey, by lease for a term, or in fee, real estate, so far as it may be limited by its charter, or as its business may require.

The supposed irregularity in the mode of procedure pursued in the organization of the corporation, is, that the original declaration signed by the stockholders should have been recorded in the office of the judge of probate of the county in which it was proposed to carry on business, and that such record was a condition precedent to corporation existence. The Bevised Code of 1867, §§ 1756-7, did require that the declaration should be recorded in the office of the judge of probate, and upon the filing and recording, declared the subscribers became a body corporate, by the name stated therein. [244]*244There were similar provisions in reference to towns, religions, educational, benevolent and burial societies, mining, quarrying, and manufacturing associations, &c. While turnpike, plank, macadamized, and railroad companies, steamship companies and banking associations were required to file the declarations, which became their charters in connection with the general statutes, in the office of the Secretary of State. These statutory regulations existing, requiring as to some corporations that the declaration should be filed in the office of the judge of probate of the county in which the corporation was to be located, and as to others, that it should be filed in the office of the Secretary of State, the act of November 18th, 1868, entitled An act supplementary to the corporation laws of Alabama,” was enacted. — Pamph. Acts 1868, p. 349. The first section requires the application for a charter under any of the general incorporation laws of this State, to be filed with the Secretary of State, and that a certified copy shall be retained for record by the officer before whom such application is made. The filing of the certificate with the Secretary of State, constituted the persons named a body corporate.

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Bluebook (online)
61 Ala. 232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cahall-v-citizens-mutual-building-assn-ala-1878.