Chase v. Redfield Creamery Co.

• Decision Date: 07 February 1900
• Citation: 12 S.D. 529,81 N.W. 951
• Parties: ALONZO CHASE, Plaintiff and respondent, v. REDFIELD CREAMERY CO., Defendant and appellant.
• Court: South Dakota Supreme Court

12 S.D. 529

81 N.W. 951

ALONZO CHASE, Plaintiff and respondent,

v.

REDFIELD CREAMERY CO., Defendant and appellant. South Dakota Supreme Court Appeal from Circuit Court, Spink County, SD Hon. A. W. Campbell, Judge Affirmed C. T. Howard, K J. Gannon Attorneys for appellant. H. G. Warnock Attorney for respondent. Opinion filed February 7, 1900

CORSON, J.

This is an action to recover of the defendant for the back rent of premises leased to the Mellette Creamery Company, a corporation, and for rent accruing during the occupancy of the premises by the defendant, a corporation. Verdict and judgment for the back rent were rendered for the plaintiff, and defendant appeals.

Prior to May 1897, a corporation known as the Mellette Creamery Company rented certain premises belonging to the plaintiff, and at about the date mentioned was indebted to the plaintiff for a balance of $110 due on. account of such rent. The Mellette Creamery Company being unsuccessful in its business, the Cornish, Curtis & Green Company, a corporation doing business in St. Paul, and holding a mortgage upon the machinery of the Mellette Creamery Company, concluded to organize a new company, which should take the property of the Mellette Creamery Company and continue its ousiness. Thereupon F. D. Culver, an agent of said company, came out to Redfield to ascertain upon what terms the building rented from the plaintiff could be obtained for such new corporation. He had two or more interviews with the plaintiff, in which the plaintiff consented that the new corporation might continue to occupy his building for the purpose of continuing the said business upon condition that the new corporation should assume and pay the back rent due from the Mellette Creamery Company. There is some conflict in the evidence in regard to this agreement, but as the question of whether or not such agreement was made was submitted to the jury and found in favor of the plaintiff, we shall assume that such was the agreement. A new corporation was thereupon organized, under the name of the Redfield Creamery Company, of which said Culver was elected president; J. H. Cornish, a member of the Cornish Curtis & Green Company, secretary and treasurer; and Henry Braun, former manager of the Mellette Creamery Company, was made manager. The Redfield Creamery Company took possession and continued to occupy the premises from about May 24th, 1897, the time of its incorporation, to September of that year, when the business, not proving satisfactory, was closed up, and the Cornish, Curtis & Green Company took possession of and removed the machinery from the plaintiffs building. The contract between the plaintiff and Culver was made some two or three days prior to the organization of the Redfield Creamery Company, and the appellant contends that it is not bound by the contract made for it by Culver, as it had no existence at the time such contract was made.

As a general rule, contracts made for or on behalf of a proposed corporation to be thereafter orgamized, by its promoters, will not be binding upon the corporation; but to this rule there are many exceptions. A corporation may, in its corporate capacity, adopt the contract made for or in its behalf, or it may adopt the contract by accepting the benefits so made in its behalf. Mr. Morawetz, in his work on Private Corporations, after laying down the general rule. says: “A corporation may, however, make itself responsible for such acts and...