Nightingale v. Milwaukee Furniture Co.

71 F. 234, 1895 U.S. App. LEXIS 3268
CourtU.S. Circuit Court for the District of Southern California
DecidedDecember 23, 1895
DocketNo. 284
StatusPublished

This text of 71 F. 234 (Nightingale v. Milwaukee Furniture Co.) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Southern California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nightingale v. Milwaukee Furniture Co., 71 F. 234, 1895 U.S. App. LEXIS 3268 (circtsdca 1895).

Opinion

ROSS, Circuit Judge.

The transactions which culminated in the present suit had their beginning in the spring of 1888. A certain furniture business had been established and carried on in the city of Los Angeles by the firm of Bryant, Arnold & Jones, afterwards by Bryant & Arnold, and then by Otis P. Arnold alone. On the 2d day of March, 1888, Otis P. Arnold, L. J. P. Morrill, George L. Arnold, and John Jucker, who are made defendants to the bill, together with the complainant and certain other persons, namely, Seth C. Arnold, William Zinns, and A. C. Blankenburg, for the purpose of forming a corporation under the laws of California to carry on at the city of Los Angeles a general furniture business, prepared and signed articles of association for the purpose, and filed them in the office of the county clerk of Los Angeles county, Cal., and on the 5 th day of March, 1888, filed a certified copy thereof in the office of the secretary of stale of California, such articles stating, in substance, the term and life of the corporation to be 50 years, and the business in which it proposed to engage to be the buying and selling of furniture; and stating its capital stock to be $100,000, divided into 1,000 shares of the par value of $100 each; and stating that 90 per cent, of such capital stock was then in fact paid in. The persons subscribing for the stock, and whose names appeared as subscribers upon the subscription list attached to and made a part of the articles of incorporation so filed, and the number of shares taken by each, were as follows, namely: The. defendant Otis P. Arnold, 200 shares, $20,000; the defendant L. J. P Morrill, 200 shares, $20,000; the complainant, Newell Nightingale, 150 shares, $15,000; the defendant John Jucker, 50 shares, $5,000; the defendant George L. Arnold, 50 shares, $5,000. In addition to these, all of whom were made parties to the bill in this case, Seth O. Arnold’s name appears as a subscriber for 100 shares, $10,000; A. O. Blankenburg, 100 shares, $10,000; and William Zinns, 50 shares, §5,000. In and by the articles of incorporation the board of directors thereof was fixed at five, and the defendants Otis P. Arnold, L. J. P. Morrill, George L. Arnold, the complainant, Newell Nightingale, and the said A. C. Blankenburg, were named and designated as the first board of directors. In the bill filed by the complainant he omitted to allege the fact, afterwards set up in the answer of the defendants, and established by proof, that upon the filing in the oflice of the secretary of state of California of a certified copy of the articles of incorporation filed with the county clerk of Los Angeles county, the secretary of state, pursuant to the statute of California, issued and delivered to the Milwaukee Furniture Company his certificate stating that a certified copy of such articles was filed in his office on the 5th day of March, A. D. 1888, containing the required statement of facts, to wit: First, the name of the corporation; sec[236]*236ond, the purpose for which it is formed; third, the place where its principal business is to be transacted; fourth, the term for which it is to exist; fifth, the number of its directors or trustees, and the names and residences of those who are appointed for the first year; sixth, the amount of its capital stock, and the number of shares into which it is divided; seventh, the amount of its capital stock actually subscribed, and by whom. Although the bill alleges that the subscription for stock in the name of Seth C. Arnold was not, in fact, made by him, but in reality by Otis P. Arnold, without authority, and for the fraudulent purpose of inducing the subscription of the complainant, and that the said William Zinns was a mere dummy for Otis P. Arnold for a like fraudulent purpose on his part, and that the said Blankenburg never contributed nor intended to contribute to or take any part in the business, the evidence, I think, fails to sustain those charges in respect to those alleged frauds on the part of Otis P. Arnold, or in respect to the total failure of Blankenburg in his undertaking. It is true, as claimed on the part of the complainant, that there never was any formal meeting of the board of directors, nor the adoption of any by-laws for the corporation, nor the issuance of any stock (although certificates of stock were prepared), nor any record of the proceedings of the directors or stockholders, other than is contained in the books and accounts epened and kept under the direction and supervision of the complainant himself, which he now claims were kept between the defendants and himself as between copartners, each having individual credits for money paid in to the use of the business carried on, and debited with money drawn out. The evidence shows that, after the issuance by the secretary of state of California of the certificate of incorporation, the complainant, and Jucker, Blankenburg, Morrill, and Arnold, met and agreed that Otis P. Arnold should be president, L. J. P. Morrill vice president, and the complainant, Nightingale, should be secretary and treasurer of the corporation, and general manager of the business; and that Morrill, Nightingale, and Otis P. Arnold should each receive for their services in carrying on the business $150 per month, and Jucker, for his services in that behalf, $125 per month. The bill heads used in the business represented Otis P. Arnold as president, L. J. P. Morrill as vice president, and Newell Nightingale as secretary and treasurer; and it is in evidence that the Milwaukee Furniture Company subsequently brought certain suits as a corporation, the complaints in which were verified by the present complainant, Newell Nightingale, as .its secretary. According to the evidence, neither 'Seth C. Arnold nor William Zinns ever paid anything on account of their subscription for stock or otherwise. Blankenburg contributed to the company a certain lot of furniture, of the value of $2,048, which was accepted by the company as that much cash from him, but no further payment or contribution has been made by him; and the bill alleges that the complainant and the defendants Otis P. Arnold, L. J. P. Morrill, George L. Arnold, and John Jucker are the only persons associated or interested in the defendant Milwaukee Furniture Company, “whether the same shall be found to be a corporation, joint-stock association, or copartnership; and owned the whole capital in the [237]*237business under that name at Los Angeles, subject only to the rights of creditors.”

Although the complainant now insists that the Milwaukee Furniture Company was and is a copartnership, and should be so treated by this court, and upon that theory seeks an accounting as between himself and his alleged copartners, the defendants to the bill, yet the allegations of his own bill are that, when the articles of incorporation were signed and filed, “he believed and supposed that the subscription for stock appearing on the list was genuine, and made in good faith; and that the parties signing and purporting to have signed were all responsible financially for the several accounts subscribed; and that the amount of the several subscriptions would be paid in in cash, except the subscriptions of the defendants Otis P. Arnold and A. 0. Blankenburg, which were to be paid by the delivery of goods required in the burn ness to be entered upon;” and which he fully believed and trusted would be delivered l'or use, and the organization he fully perfected, and enter upon its business as a corporation. And that, so believing and trusting, he paid, a few days after the filing of the articles of incorporation, “at the University Bank, to George L.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Shorb v. Beaudry
56 Cal. 446 (California Supreme Court, 1880)
Morrill v. Nightingale
28 P. 1068 (California Supreme Court, 1892)
Kohl v. Lilienthal
22 P. 689 (California Supreme Court, 1889)
Phillips v. Phillips
49 Ill. 437 (Illinois Supreme Court, 1863)
Bushnell v. Consolidated Ice Machine Co.
27 N.E. 596 (Illinois Supreme Court, 1891)

Cite This Page — Counsel Stack

Bluebook (online)
71 F. 234, 1895 U.S. App. LEXIS 3268, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nightingale-v-milwaukee-furniture-co-circtsdca-1895.