Bushnell v. Consol. Ice-Mach. Co.

• Decision Date: 13 May 1891
• Citation: 138 Ill. 67,27 N.E. 596
• Parties: BUSHNELL v. CONSOLIDATED ICE-MACH. CO. et al.
• Court: Illinois Supreme Court

138 Ill. 67

27 N.E. 596

BUSHNELL

v.CONSOLIDATED ICE-MACH. CO. et al.

Supreme Court of Illinois.

May 13, 1891.

Error to circuit court, Cook county.

F. P. Read, (J. N. Jewett, of counsel,) for plaintiff in error.

Tatham & Webster, for defendants in error.

WILKIN, J.

This was a proceeding in chancery by plaintiff error against defendants in error, begun in the circuit court of Cook county on the 27th day of October A. D. 1889, the object of which was to have the ‘Consolidated Ice-Machine Company’ declared a copartnership, and its affairs settled between the complainant and defendant accordingly. In the circuit court a general demurrer was sustained to the bill, and a decree entered dismissing the same at complainant's cost. From that decree this writ of error is prosecuted.

The following facts affirmatively appear from the bill: Early in September in 1884 complainants and the defendants Skinkle, Rassieur, and Koenigsberg, together with one Edmund Jungefeld, since deceased, entered into an agreement in writing to form a corporation to be known as the ‘Consolidated Ice-Machine Co.,’ under the laws of this state; that all the required steps up to and including the issuing of a certificate of the complete organization of such corporation by the secretary of state, as required by section 4, c. 32, Rev. St., were taken; that in pursuance of that certificate complainant, with said Skinkle, Rassieur, and Jungefeld, claiming to be the directors of said company, elected officers for the same, ‘and immediately engaged in business.’ It also appears from the bill that said company continued to do business under said name to the filing of this bill, a period of more than five years. Also that for several months complainant continued to be the secretary and soliciting agent for the same, and was actively engaged in its business; that about January 1, 1885, he became afflicted with melancholia, and remained incapacitated for the transaction of business for about three years; that during his said sickness the other directors of said company sold certain shares of his stock in said company for a failure on his part to pay installments due thereon, the sale being made without notice, etc., and that since said sale he has been excluded from all participation in the management of said business; that, after being restored to health, and before filing his bill, he made frequent demands to be restored to his rights in said corporation without avail, etc. Facts are then alleged which go to the basis of a settlement between the parties upon the theory that they are liable to each other as partners. In our veiw of the case these facts are unimportant.

It is also insisted in the argument that the bill shows that by the terms of the agreement to organize said company the same was only to exist for a period of five years, which had expired when the bill was filed. The license under which the organization was made is attached to the bill as an exhibit, and it states that its duration shall be 25 years. If it were important to determine the life-time of the company, we have no doubt this license, and not the preliminary agreement of parties, would control. That, however, is not a question of importance in this proceeding. For the mere exercise of its franchise beyond the period for which it was organized the state alone could complain. It is also contended that certain subscriptions to the capital stock, made by complainant, are shown by the bill not to be subscriptions made in good faith, and that the directors, having assumed corporate power before all the stock was subscribed for in good faith, became personally liable for all debts and liabilities of the company under section 18, c. 32, Rev. St. We think it clear that complainant is in no position to raise that question in a court of equity for the purpose of having the company declared a copartnership. The only allegation of the bill which is seriously insisted upon as furnishing a ground for the relief prayed is ‘that the certificate of complete organization was never recorded in the office of the recorder of deeds for Cook county, where its principal office is located;’ the argument being that, in order to constitute the defendant company a corporation under the laws of this state, that certificate must have been so recorded, and, failing to become incorporated, its members are to be treated as partners. The section of the statute upon which the first proposition is based is as follows: ‘The secretary of state shall thereupon issue a certificate of the complete organization of the corporation, making part thereof a copy of all papers filed in his office in and about the organization of the corporation, and duly authenticated under his hand and seal of state, and the same shall be recorded in a book for that purpose in the office of the recorder of deeds of the county where the principal office of such company is located. Upon the recording of said copy the corporation shall be deemed fully organized, and may proceed to business. Unless such company shall be organized and shall proceed to business as provided in this act within two years after the date of such license, then such license shall be deemed revoked, and all proceedings thereunder void.’ The language of this section is not clear. While it says the certificate shall be recorded, it does not say who shall cause it to be done. It does not say the recording of the certificate shall be necessary to the complete organization of a corporation, but ‘upon the recording of the said copy the corporation shall be deemed fully organized, and may proceed to business.’ Conceding, however, by the word ‘copy’ is meant ‘certificate,’ incorporators would have done all that is required of them when they had filed it with the proper officer for record. There is no allegation in this bill that it was not so filed. The averment is simply that it has ‘never been recorded,’ etc. But, assuming that a corporate existence de jure depends upon the filing of the certificate of complete organization in the office of the recorder of deeds of the county in which its principal office is located, and that the bill properly avers that it was not done in the case of the corporation in question, it by no means follows that it did not become a corporation de facto, as between the complainant and defendants. From the facts set up in the bill it clearly appears that there was an honest attempt by the incorporators to organize a corporation authorized by the laws of this state. The necessary steps to perfect that orgauization...