Cochran v. Arnold

• Decision Date: 02 July 1868
• Court: Pennsylvania Supreme Court
• Parties: Cochran <I>et al. versus</I> Arnold <I>et al.</I>

Page 399

58 Pa. 399

Cochran et al. versus Arnold et al.

Supreme Court of Pennsylvania.

May 5, 1868.

July 2, 1868.

May 5th 1868.

Before THOMPSON, C. J., STRONG, READ, AGNEW and SHARSWOOD, JJ.

Error to the Court of Common Pleas of Lancaster county: To May Term 1868, No. 48.

COPYRIGHT MATERIAL OMITTED

J. E. Heister for the plaintiffs in error.—As to the amendment — Act of April 12th 1858, § 1, Pamph. L. 243, Purd. 47, pl. 4; Good Intent Co. v. Hartzell, 10 Harris 277; Downey v. Garard, 12 Id. 52; Kaylor v. Shaffner, Id. 489; Druckenmiller v. Young, 3 Casey 97; Act of April 16th 1846, § 2, Pamph. L. 353, Purd. 46, pl. 2; Wood v. Philadelphia, 3 Casey 502; Everhart v. Railroad, 4 Id. 340; Walthour v. Spangler, 7 Id. 523; Steffy v. Carpenter, 1 Wright 41; Rangler v. Hummel, Id. 130; Academy v. Robinson, Id. 210; Hite v. Kier, 2 Id. 72; Jackson v. Lloyd, 8 Id. 82; Shollenberger v. Seldonridge, 13 Id. 83; Philadelphia Association v. Wood, 3 Id. 73; Locke v. Daugherty, 7 Id. 88; Patterson v. Arnold, 9 Id. 410. As to the charge of the court: Mansfield Iron Works v. Wilcox, 2 P. F. Smith 377; Act of April 14th 1851, § 13, Pamph. L. 615, Purd. 770, pl. 1.

O. J. Dickey and T. E. Franklin, for defendants in error.— Whether the "Conestoga Steam-Mills" is a valid corporation cannot be questioned collaterally: Act of April 7th 1849, Pamph. L. 653, Purd. 689; June 14th 1836, § 2, Pamph. L. 621, Purd. 832, pl. 2 (Quo Warranto); March 21st 1806, § 13, 4 Sm. L. 332, Purd. 41, pl. 5; Angell and Ames on Corp. § 94, 777, and authorities cited; Wright v. Shelby Railroad, 16 B. Munroe 4; Bank of Circleville v. Remick, 15 Ohio 322; Patterson v. Arnold, supra; Jones v. Dana, 24 Barb. Sup. C. 402; Stedman v. Evelath, 6 Metc. 114; Falconer v. Campbell, 2 McLean 195; Abbott's Nat. Dig. "Corporations," pl. 13. The defendants are estopped, having been cognisant of the facts on which they rely to set the charter aside: Cathcart v. Robinson, 5 Peters 280; Starry v. Arden, 1 Johns. Chan. Rep. 261; Jackson v. Town, 4 Cowen 603; Lancaster v. Dolan, 1 Rawle 246; Foster v. Walton, 5 Watts 378. The plaintiffs dealt with the corporation as a corporation and cannot imply a contract with the defendants Fay: v. Noble, 7 Cushing 188; Locke v. Daugherty, 7 Wright 88; Collyer on Partn., § 725.

The opinion of the court was delivered, July 2d 1868, by STRONG, J.

The Act of Assembly of March 21st 1806, relative to amendments, is imperative in its directions. It declares that a plaintiff shall be permitted to amend his declaration or statement in the cases for which it makes provision. But the language of the later acts is different. The Act of April 16th 1846 confers upon courts power to permit amendments of the record, when it shall appear to them by any sufficient evidence that a mistake has been made in the Christian or surname of a party. So the Act of May 4th 1852, empowers the courts to permit amendments in any stage of the proceedings, by changing or adding the name, or names, of any party whenever it shall appear to them that a mistake or omission has been made in the name or names of any such party. And the Act of April 12th 1858 directs that the Act of 1852 shall be so construed as to authorize the said courts when, by reason of there being too many persons included as plaintiffs or defendants, by mistake, the cause is prevented from being tried on its merits, to permit an amendment by striking out from the suit such persons as plaintiffs or defendants. All these acts might have been regarded as merely vesting in courts discretionary powers. They are in terms permissive. Such amendments are to be allowed only when there has been a mistake, not barely the assertion of one, and the court is to judge of its existence. There is more reason why a plaintiff should have a legal right to amend his proceedings, when he seeks only to cure an informality, than when the amendment he desires is so vital as is a change of parties. In the case now before us the plaintiffs asked leave to strike off the names of nearly ninety defendants, leaving only two, and that after the entire evidence had been submitted. Clearly, this would have been a substantial change of the cause of action, which was originally assumpsit upon an alleged joint contract. Had the amendment been allowed, its effect would also have been to deny to the defendants stricken off a remedy for their costs, and that after the other defendants had been deprived of their testimony. And there was no evidence offered of any mistake in having joined so many as defendants in the writ. Were, then, the Acts of 1846, 1852 and 1858 to be construed as they might have been, this would have been a very proper case for refusing the amendment proposed. But under the construction that has been given to them, it would seem that the amendment should have been allowed. In Kaylor v. Shaffner, 12 Harris 489, Lewis, C. J., said, "When the plaintiff by mistake, either of law or of fact, brings an action for his use in the name of one who has no title to support it, the Act of 1852 fairly applies to the case, and whenever it shall appear to the court that such a mistake has actually occurred, it is the duty of the court to correct it." This was holding the Act of 1852 to be more than the grant of a discretion. So in Wood v. The City of Philadelphia, 3 Casey 502, a judgment was reversed because the court below refused to allow an amendment in the names of the parties, and Woodward, J., said: "The power to permit amendments in the names of parties is conferred upon the courts by the second section of the Act of April 16th 1846, and the grant of the power implies the duty to exercise it in a proper case. The mistake, says the act, may be shown by any sufficient evidence, and that which ought to satisfy is sufficient." And in Rangler v. Hummel, 1 Wright 130, where a co-plaintiff was stricken from the record, the present Chief Justice said, "We have so often decided under our statutes of amendments, that parties might be stricken out or added whenever this was necessary to a trial on the merits of the case, that we do not deem it necessary to cite authorities on the subject. This is the plain requirement of the Act of May 4th 1852, as construed by the Act of April 12th 1858. Whenever the rights of a party are liable to be defeated by having joined too few or too many plaintiffs or defendants, the amendments may be made. In such circumstances the fact of mistake is hardly debateable; it will be presumed, if without them the merits may not be fully tried." Most of the cases, it is true, relate to amendments which have been allowed in the lower courts, and we have sanctioned them. Wood v. Philadelphia is, however, an exception. So most of the cases relate to amendments of plaintiffs on the record, but the Act of 1858 places plaintiffs and defendants on the same footing, and the cases cited make no distinction. If the acts are to be regarded as compulsory, it is as much a right of a plaintiff to strike off names of defendants, as it is to make changes in plaintiffs. Locke v. Daugherty, 7 Wright 88, justified a refusal of an amendment striking out the name of one of two defendants in an action of assumpsit, but the decision was grounded upon the special circumstances of the case. There was no allegation of mistake, and there had been an arbitration and an appeal. It was not intimated that what had been previously decided, namely, that under the Acts of 1852 and 1858 an amendment striking out the names of parties, either plaintiffs or defendants, is a matter of right, is not the law. We should, therefore, be constrained to rule that there was error in the refusal to permit the plaintiffs to amend by striking out the names of all the defendants except Longenecker and Baumgardner, and to reverse the judgment, were it not for the fact that, in our opinion, the amendment, had it been allowed, would have availed the plaintiffs nothing.

The action was assumpsit brought against a large number of persons, charging them as partners in the purchase of cotton alleged to have been sold and delivered. The defendants were stockholders of a company called Conestoga Steam-Mills, which claimed to have become a corporation in 1849, under the General Manufacturing Law of that year. In 1849 a certificate of association for corporate purposes was made out and recorded. It set forth all that the law required. It was entirely regular on its face. A certified copy of it was filed in the office of the Secretary of the Commonwealth. Ostensibly the requirements of the law were fully met. From that time until after the cotton was sold, the corporation had, if not a legal, at least a de facto existence, and it carried on business as such. In November 1856 the plaintiff sold a quantity of cotton to it and took the promissory notes of the corporation for the price, with a full knowledge of the mode of its constitution, and of what is now alleged to have been a failure to comply with the requisitions of the Manufacturing Law for the procurement of a charter. They now sue those who were stockholders of the company at the time the cotton was purchased, and claim to recover against them individually upon the ground that the original certificate for incorporation, though apparently regular, was illegal and void because it did not set forth that the capital paid in was at the time invested in mills, machinery and other property adapted to the purposes for which the corporation was proposed to be organized. This they contend renders the charter a nullity, and justifies them in treating the sale as having been made to the defendants as partners. The case rests therefore upon the assumption that because the corporation was so irregularly constituted that the Commonwealth might have called in question its legal existence, the plaintiffs may attack it and disprove its lawful being.

But the assumption is unwarranted. The plaintiffs are not at liberty to assert in...