Indianapolis Furnace & Mining Co. v. Herkimer

46 Ind. 142
CourtIndiana Supreme Court
DecidedNovember 15, 1873
StatusPublished
Cited by26 cases

This text of 46 Ind. 142 (Indianapolis Furnace & Mining Co. v. Herkimer) is published on Counsel Stack Legal Research, covering Indiana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Indianapolis Furnace & Mining Co. v. Herkimer, 46 Ind. 142 (Ind. 1873).

Opinions

Worden, J.

Complaint by the appellant against the appellee on the following paper subscribed by the defendant.

"Articles of association of the Indianapolis Furnace and Mining Company, organized for the purpose of operating in the counties of Marion and Clay, in the State of Indiana.

Article First. The name of said company shall be the Indianapolis Furnace and Mining Company.

“ Article Second. The capital stock of said company [143]*143.shall be one hundred thousand dollars, and be divided into shares of fifty dollars each, to be paid for in such amounts and at such times as may be ordered by the board of directors.

“ Article Third. The stockholders shall elect directors, who shall from their number elect a president, secretary, .and treasurer, who shall hold their office for one year and until their successors are elected and qualified.

“Article Fourth. The board of directors shall have the control and management of the business of the company, ■except as they may appoint some one or more persons to take charge of the same, in which case the record of the .action of the board in appointing them shall be evidence of their authority to act for said company.

“Article Fifth. The board of directors shall have power to make assessments on stock, collect the same, issue certificates therefor, and declare and pay dividends, which shall be at least twice a year. t

“Article Sixth. All the expense incurred by the company .shall be paid, and all the indebtedness of the same shall likewise be discharged before any dividends shall be paid to the stockholders, unless the directors shall direct otherwise.

“Article Seventh. We, the undersigned, hereby subscribe to all the foregoing articles, provisions, conditions, and stipulations, and agree to the organization of a company as therein stated, binding ourselves to take and pay for the ■number of shares of stock set opposite our names respectively, and pay for the same at such times and in such amounts as the board of directors may order the same to be paid for, without relief from valuation or appraisement laws.

Subscribers’ Names. No. of Shares.

“J. D. Herkimer, by D. Root, 100.”

There were three paragraphs in the complaint, each counting upon the same instrument, in each of which it was •alleged, that at the time of the execution of the instrument [144]*144by the defendant, the plaintiff was a duly organized corporation ; but it is not alleged in either paragraph that after the-execution of the instrument any. steps were taken to perfect the organization.

The defendant demurred to each paragraph, assigning for -cause the want of a statement of sufficient facts, but the demurrers were overruled, and the defendant excepted.

The defendant then answered,

I. By general denial.

2. Nul tiel corporation.

3. Nul tiel corporation, setting out specially the omission ..of the performance of the acts required by the statute, in, order to perfect the corporate organization.

4. A denial of the execution of the instrument, sworn to.

It appears by the entries of the clerk, though not by any bill of exceptions, that the plaintiff moved in writing to strike out the second and third paragraphs of the answer, “ for the reason that the first and fourth present the whole question,” but that the motion was overruled, and the plaintiff excepted. A reply in denial was then filed to the second and third paragraphs of the answer.

Trial by the court, finding and judgment for the defendant, the plaintiff having unsuccessfully moved for a nevr trial.

The overruling of the appellant’s motion to strike out the second and third paragraphs of the answer is, amongst other ■ things, assigned for error. Conceding that this question is in the record, the motion was properly overruled, because the ground on which it was made is not tenable. The first and fourth paragraphs, being mere denials, did not “present the whole question.” The general denial does not put in issue the existence of the corporation. Cicero Hygiene Draining Company v. Craighead, 28 Ind. 274, and authorities cited. Perhaps the paragraphs were in abatement, and should, therefore, have been sworn to. See Heaston v. The Cincinnati, etc., Railroad Co., 16 Ind. 275. But no question [145]*145was made in this respect, nor was the validity of the paragraphs in any way brought in question.

We may properly here notice another proposition, which,, though not perhaps directly involved, is in some measure connected with the motion for a new trial. We are of opinion that a radical error was committed in overruling the demurrers to the several paragraphs of the complaint. The articles of association signed by the defendant, including his subscription for stock, were very clearly mere preliminary articles, contemplating a future perfection of the organization as a corporation. The defendant’s contract did not purport to be with an existing corporation, but with one to be brought into existence in the future. The averment in the complaint that the plaintiff was, at the time the subscription was made, an existing corporation, cannot change-the nature and legal effect of the defendant’s contract. That contract was, in legal effect, that the defendant would take and pay for the stock subscribed for, in case the organization should be perfected and the corporation brought into legal existence, and not otherwise. Such preliminary subscrip- 1 tions seem to enure to the benefit of the corporation when-1 formed. Heaston v. The Cincinnati, etc., Railroad Co., supra.

But unless the subsequent steps, necessaiy to bring into-existence the corporation, were taken, there was no corporation to whose benefit the contract could enure, and the defendant could not be liable; and it should have been averred in the complaint that such steps had been taken. Wert v. The Crawfordsville and Alamo Turnpike Co., 19 Ind. 242; Williams v. The Franklin Township Academical Association, 26 Ind. 310.

In such case, the estoppel growing out of a contract with, a party as an existing corporation does not apply. In the-case last cited, the court say :

" This rule of estoppel does not apply to a suit brought on a subscription made with a view to the organization of a. corporation, and as preliminary thereto, where other acts [146]*146are required by the law as a condition precedent to the exercise of corporate powers.”

The first and second sections of the act for the incorporation of manufacturing and mining companies (1 G. & H. 425), under which the appellant claims to have been organized, are as follows:

“Section 1.

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46 Ind. 142, Counsel Stack Legal Research, https://law.counselstack.com/opinion/indianapolis-furnace-mining-co-v-herkimer-ind-1873.