E. B. Hayes Machinery Co. v. Eastham

• Decision Date: 05 April 1920
• Docket Number: 22514
• Citation: 84 So. 898,147 La. 347
• Court: Louisiana Supreme Court
• Parties: E. B. HAYES MACHINERY CO. v. EASTHAM et al

84 So. 898

147 La. 347

E. B. HAYES MACHINERY CO. v. EASTHAM et al

No. 22514

Supreme Court of Louisiana

April 5, 1920

Rehearing Denied May 31, 1920

Appeal from First Judicial District Court, Parish of Caddo; T. F Bell, Judge.

Action by the E. B. Hayes Machinery Company against J. H. Eastham and others. From judgment for plaintiff, defendants appeal.

Judgment annulled, avoided, and reversed, defendants' exception of no cause of action sustained, and suit dismissed.

Browne Browne & Garland and F. G. Thatcher, all of Shreveport, for appellants.

Blanchard, Goldstein & Walker, of Shreveport, for appellee.

OPINION

DAWKINS, J.

Plaintiff, a Texas corporation, sued the defendants, J. M. Eastham, J. W. Clarke, and Lee Kinnebrew, as members of an alleged commercial partnership, styled the Universal Fiber Gin Company, for a balance on open account of $ 2,388.18 for machinery alleged to have been sold and delivered to said Universal Fiber Gin Company in the city of Marshall, Tex.

Defendants excepted on the ground that the petition disclosed no cause or right of action, and, this being overruled, answered, denying all of the allegations of the petition, and averring that they were not partners in any sense, and had not consented or agreed to be bound as partners; that in October, 1914, they were stockholders in a corporation known as the Universal Fiber Gin Company, of Harrison county, Tex., and that the other stockholders therein were E. B. Hayes, president of plaintiff company, Frank Davis and I. Hochwald, all of Marshall, Tex.; that, if said concern was not a corporation de jure, it was a corporation de facto; that said E. B. Hayes was one of the active promotors and organizers of said corporation, and signed the charter thereof; that Hayes is the principal and controlling stockholder in the plaintiff company; that whatever goods were sold and delivered were so sold and delivered to the Universal Fiber Gin Company, of Harrison county, Tex., as a corporation; that no credit was extended to defendants individually or as partners, and all dealings were had with said corporation as a corporation, which was known to plaintiff and dealt with by it as such; that Hayes undertook to secure additional subscriptions to its capital stock to the amount of $ 250, in addition to his own subscription, and himself subscribed for $ 500 thereof, which was passed to the credit of whatever indebtedness might be due by said corporation to the plaintiff company; that said Hayes did procure the subscriptions of Davis and Hochwald to the amount of $ 125 each, and further agreed that the same would be guaranteed by him, and should likewise be placed to the credit of the Universal Fiber Gin Company, of Harrison county, Tex., with plaintiff. They further aver that the charter of said corporation was lawfully and duly drawn and passed, incorporating said Universal Fiber Gin Company, with a total capital stock of $ 10,000 and of said amount $ 8,000 was subscribed and paid in by the above-named incorporators; that said charter was forwarded to the secretary of state for Texas, and that defendants had paid all of their subscriptions to its stock; that said charter was returned solely on account of informalities in the affidavits accompanying same; that these were minor informalities, easy of correction or amendment, and that said charter was left with said Hayes, who agreed to procure the proper corrections, and to reforward said charter, with proper affidavits, to the secretary of state; that said Hayes failed and neglected to do so, and, if said Universal Fiber Gin Company is not a corporation de jure, which is not admitted, then the same is due wholly to the fault of the said Hayes; that all of the business and dealings of said Universal Fiber Gin Company were conducted openly and publicly as a corporation; that it contracted as such, incurred obligations as such, and that it was sued and impleaded as such in the courts of Harrison county, Tex. Defendants further averred that, if said concern was neither a corporation de jure nor de facto, then the plaintiff is, for the reasons alleged, estopped to deny its corporate existence, which estoppel they specially pleaded.

Defendants further pleaded, in the alternative, that if the court should find that the said Universal Fiber Gin Company was neither a corporation de jure nor de facto, and that the plaintiff was not estopped, then and in that event the nature of the business carried on was such as to constitute nothing more than an ordinary partnership, and, if defendants are liable at all, it cannot be for more than one-sixth each.

There was judgment for plaintiff against the defendants in solido for the amount claimed less a credit of $ 250. Defendants appealed, and plaintiff has answered, praying that the judgment be increased to the amount originally demanded.

Exception of No Cause of Action.

The basis of this plea or exception is that, inasmuch as the petition alleges the existence of a partnership (commercial) in the state of Texas, and in no wise charges its dissolution, it does not set forth a cause of action against the individual members; but, in view of the peculiar legal status of a partnership under the Louisiana law, the plaintiff can bring its action against that entity alone in the first instance.

For the purposes of this exception, we can look to the law of this state only, for the reason that the law of Texas is not alleged, and, in the absence of such allegation, must presume that it is the same as ours. The state of Texas was never under the regime of the common law, in the sense of the original 13 colonies, or of the states carved out of the territory falling to the United States under the treaty by which the latter obtained her independence, but at the time of her admission into the Union was an independent republic whose territory had formerly been a part of Mexico, which is governed by the principle of the civil or Spanish law. If she has subsequently adopted the common law, it must have been by statute, and the courts of this state do not take cognizance of the statutes of the other states. Americanized Encyclopedia Britannica, vol. 9, p. 3766. See note 21 L.R.A 468...