Duke v. Taylor

• Decision Date: 14 January 1896
• Citation: 37 Fla. 64,19 So. 172
• Parties: DUKE v. TAYLOR et al.
• Court: Florida Supreme Court

19 So. 172

37 Fla. 64

DUKE v. TAYLOR et al.

Florida Supreme Court

January 14, 1896

Appeal from circuit court, Orange county; Jhon D. Broome, Judge.

Action by James K. Duke against Greenfield Taylor and others. Action dismissed, and plaintiff appeals. Reversed.

Syllabus by the Court

SYLLABUS

1. The domicile and citizenship of a corporation belong to the state under whose laws it is created. It exists only in contemplation of law and by force of the law, and where that law ceases to operate the corporation can have no existence. Hence a corporation must dwell in the place of its creation and cannot migrate to another sovereignty.

2. Though a corporation must dwell in the place of its creation its existence there will be recognized in other places, and its residence in one state creates no insuperable objection to its power of contracting in another.

3. Where a corporation has been legally created and organized under the laws of a sister state for the transaction of any business there, it may, by comity existing between the states, transact business in this state, provided it be not in contravention of our laws or public policy.

4. A corporation created under the laws of one state cannot hold corporate meetings in another for the purpose of organizing the corporation, electing its officers, or performing any strictly corporate functions in its organization.

5. The courts will not take judicial knowledge of the laws of another state under which a corporation is claimed to have been created, when the corporate existence is in issue; but proof of such laws must be made, in order that the courts may be advised of the legal warrant for the creation of such corporation.

6. A corporation de facto is one where the company has made an effort to organize under some law authorizing the creation of such a corporation, but there is an irregularity in the organization; and where a corporation de facto exists and does legitimate business in its corporate name, the stockholders are not liable as partners. There can, however be no corporation de facto unless it can exist de jure.

7. An attempted organization of a corporation in this state under a supposed charter obtained under the laws of another state, no authority being shown for the grant of such charter, or of user thereunder in the state of its creation, renders the participants in the attempted organization here liable as partners on proper demand against such association.

8. One must contract with or deal with an association as a corporation exercising corporate powers before he can be estopped from denying its existence as a corporation.

COUNSEL

W. H. Jewell, for appellant.

Beggs & Palmer, for appellees. Appellant instituted suit against appellees. Taylor and 15 others, as partners doing business as the Florida Orange Hedge Fence Company, on a note as follows:

'Orlando Fla., March 23rd, 1887.

'Two months after date, we, or either of us, for value received, jointly and severally, as principals, promise to pay to the order of Collis Ormsby, at the First National Bank of Orlando, at its office in Orlando, Florida, the sum of six hundred fifty-four dollars; and it is further agreed that, if this note be not paid at maturity, the same shall draw interest at the rate of three per cent. per month after maturity until paid, together with an attorney's fee and all costs should said note be collected by law. We each hereby waive all right to any exemption by law and under the constitution, and permit any legal execution to levy upon whatever we may have to satisfy this note.

'Florida Orange Hedge Fence Company,

'By Its Pres., Jno. W. Childress.

'James A. Knox, as Secty. & Treas.

'Indorsed: Collis Ormsby.'

The declaration alleges the transfer and indorsement of the note to appellant before maturity.

Taylor, James A. Knox, and Wiley Abercrombie were served, and they filed pleas as follows: That the Florida Orange Hedge Fence Company was a corporation organized under the laws of the state of Tennessee, and doing business in the state of Florida, and that said company was not then, and had never been, a partnership. Second. That the note sued on was given by the president and secretary of said corporation for a corporation debt, and that the same was accepted as the note of the corporation, and not as the note of a partnership; and that plaintiff knew, when the note was assigned to him, that it was a note of a corporation, and he accepted it as such.

Taylor filed two separate pleas, the second one of which was overruled on demurrer, and no amendment offered. The plea not demurred to alleges that defendant was not then, and had never been, a member of any copartnership known as the Florida Orange Hedge Fence Company, and he knew of no such copartnership. Issue was joined upon the pleas recited, and the record shows that the cause was, by consent of parties, submitted to the judge without a jury, upon the plea in abatement, and that the court submitted the plea in abatement, and dismissed the cause. The appeal from this decision was entered to the January term, 1892, of this court.

On the trial, defendants put in evidence a certified copy of a charter purporting to have been obtained under the general laws of the state of Tennessee for organizing corporations. The alleged charter recites that by virtue of the general laws of the land five persons named were constituted a body corporate by the name of Florida Orange Hedge Fence Company, for the purpose of plainting, wiring, trimming, and manufacturing fence; and certain enumerated powers incident to corporations are conferred upon the company. The terms of all officers, not to exceed two years, are to be fixed by the bylaws; and the directors, to consist of five or more members, at the option of the corporation, are to be elected by a majority of votes cast, each share representing one vote. The directors are required to keep a full and true record of all their proceedings, and an annual statement of the receipts and disbursements is required to be copied on the minutes. The books of the corporations are required to show the original or subsequent stockholders, their respective interests, the amount paid on shares, the transfer of stock, by and to whom made, and also other transactions in which a stockholder as creditor might have an interest. The first board of directors was to consist of five or more corporators, and they were to apply for and obtain the charter. The name of the corporation is the Florida Orange Hedge Fence Company, but there is nothing in the grant of powers to indicate that the corporation was organized to do business in Florida, or in any other state than Tennessee. The certified copy of the charter offered in evidence has attached to it a certificate under the hand and seal of the clerk of the county court of Montgomery county, Tenn., that the named corporators acknowledged the execution of the instrument for the purposes therein contained; and also a certificate from the secretary of state that the charter, with certificate of probate, was received and duly registered by him.

Appellees proved by the deposition of one of the corporators that at least three of them met in Clarksville, Tenn., soon after the charter was obtained; but the witness was unable to say, as he did not remember, what formalities were had in the way of electing officers. At this meeting the means and methods of operating the company were considered, and a conclusion was reached to go to Florida for the purpose of carrying out the plans of operation. In pursuance of the determination reached, three of the corporators went to Orlando, Fla., and the evidence of this witness, as well as others introduced by appellees, shows that at the place named in this state officers for the corporation were elected, stock was issued, the corporation organized and started its business in Orange county, Fla. After the corporation was organized in this state, a record was made upon the books of the company of the meeting in Tennessee, and appellees put this in evidence. It is as follows:

'Clarksville, Tenn., February 12st, 1885.

'Whereas, C. G. Smith, W. M. Daniel, A. Howell, and H. C. Merritt, of Tennessee, and Samuel Johnson, of Kentucky, on the 16th day of February, 1885, obtained a charter for the Florida Orange Hedge Fence Company from the state of Tennessee, which charter is in words and figures following, to wit.' Then follows a copy of the charter, with certificates on it, including one from the recorder of Montgomery county, Tenn., that record of the instrument had been made in his office. The minute concluded as follows: 'And whereas, the said charter provides that said five persons named as incorporators in said charter shall constitute the first board of directors, and in pursuance of the forms granted them, a quorum of said directors this day met in the officer of Smith & Lurton, in the city of Clarksville, Tennessee, there being present C. G. Smith, W. M. Daniel, and Samuel Johnson. C. G. Smith was, on motion, made chairman, and, on motion, Samuel Johnson was made secretary. C. G. Smith presented to the board the resignations of A. Howell and H. C. Merritt as directors in the company, which were accepted. Thereupon the board adjourned.

'Chas. G. Smith, Chairman.

'----- -----, Secretary.'

This minute was made from memoranda supposed to have been reduced to writing at the time of the meeting. The testimony further shows that three named corporators, after the meeting in Tennessee, went to Orlando, and, with others, the defendants in the present suit being among them, held meetings, adopted a corporate seal, elected officers, and issued stock to subscribers; and that the parties participating in the...