Citizens' Bank & Trust Co. v. Scott & Sanders

• Decision Date: 16 December 1933
• Citation: 72 S.W.2d 1064
• Parties: CITIZENS' BANK & TRUST CO. v. SCOTT & SANDERS.
• Court: Tennessee Supreme Court

72 S.W.2d 1064

CITIZENS' BANK & TRUST CO. v. SCOTT & SANDERS.

Court of Appeals of Tennessee, Eastern Section.

December 16, 1933.

Certiorari Denied by Supreme Court May 19, 1934.

Appeal from Chancery Court, Roane County; J. H. Wallace, Chancellor.

Suit by Citizens' Bank & Trust Company, trustee, against Scott & Sanders. Decree for complainant, and defendants appeal.

Modified and affirmed.

R. B. Cassell, of Harriman, for appellants.

J. W. Stone, of Harriman, for appellee.

PORTRUM, Judge.

This is a suit to collect a fire insurance policy from the agent who wrote the policy in a company not authorized to do business in the state, under authority of Shannon's Code, § 3316 (Code 1932, § 6141), which makes an agent personally liable to the insured for writing a policy in a company not authorized to do business in this state. The material facts are reflected in a decree entered by the chancellor in the cause, and which is here set out in part:

"(1) That the defendant, L. O. Scott, and F. T. Sanders, doing an insurance business as insurance agents, under the firm name and style of Scott & Sanders, a copartnership, procured for the complainant, Citizens Bank & Trust Company, Trustee, a policy of fire insurance in the sum of $1,500 written in the National Securities Underwriters, which is a foreign insurance company and not licensed to do business in the State of Tennessee. That this policy was made to become effective on December 9, 1928, and to cover certain staves the properties of the complainant or held in trust by it, and located about one-half a mile east of Annadel, in Morgan County, Tennessee, and was to continue in effect for one year from the said date of December 9, 1928. That thereafter, on, to-wit, April 14, 1929, and while said policy was in effect, the said staves were destroyed by fire. That at the time of the fire that the staves so destroyed were worth in excess of $1,500, the face of the policy.

"(2) That under Section 3316 of Shannon's Code, in effect at the time of the fire, the defendants were liable to the complainant for the amount of the face of the policy, $1,500, with interest on the same from the date of the filing of the bill in this cause, to-wit, April 2, 1930."

The next paragraph of the decree provides for a recovery in favor of the complainant of the amount of the policy with interest, or the sum of $1,755.50, and all the costs of the cause. From this decree the defendants have appealed to this court, and are advancing several defenses; we will take them up in their order as appears from the assignments of error, adding such statements of fact as we think essential to their disposition.

(a) The defendants collaterally attack the legality of the charter of the complainant, Citizens' Bank & Trust Company. It is insisted that the charter was never properly recorded in the register's office of Morgan county, the situs of the corporation; that under the corporate laws of Tennessee an incorporation is not perfected until the charter is legally recorded, and is subject to collateral attack. Brewer v. State, 7 Lea (75 Tenn.) 682; Hunter v. Swadley, 141 Tenn. 156, 207 S. W. 730. The General Incorporation Act of 1875, Shannon's Code, § 2026, provides:

"The said instrument, when probated as hereinafter provided (in section 2542), with application, probates, and certificates, is to be registered in the county where the principal office of the company is situated, and also registered in the office of the secretary of state; * * * and a certificate of registration given by the secretary of state, under the great seal of the state, shall, when registered in the register's office of said county, with the facsimile of said seal, complete the formation of the company as a body politic and the validity of the same in any legal proceeding shall not be collaterally questioned."

In this case the charter, with application, and so forth, was registered in the office of the register of Morgan county, and sent to the secretary of state for his certificate, and returned to the register of the county for the registration of the secretary of state's certificate, together with the facsimile of the seal, but, while the instrument was in transit, the register, who was a new official, received a deed for registration, and placed it on the record next to the registered charter then appearing on his books, so, when the charter was again returned to him with the secretary of state's certificate, it was necessary that he register this certificate following the deed which was placed immediately after the charter, and this placed the registered certificate two pages over from the charter, that is, the charter was registered in Deed Book Q, volume 2, pp. 226-230, the deed then followed on page 231, and the secretary of state's certificate and facsimile of the seal was registered on page 232. A notation in ink was made at the bottom of the charter, on page 230 as follows: "See page 232 for certificate." The charter was duly indexed, but there was no index of the certificate, but the index led to the notation at the foot of the charter, which notation directed the searcher to the page of the record where the certificate was registered. The notation is in the handwriting of the deputy register.

It is insisted this is not a legal registration, because of the absence of an index of the secretary of state's certificate.

In support of this contention the case of Wilkins v. Reed, 156 Tenn. 321, 300 S. W. 588, is cited; in the case the deed was properly executed, but the register failed to place upon record the signature of the notary public who took the acknowledgment, and the...