Farmers' Co-Op. Trust Co. v. Floyd
| Decision Date | 28 October 1890 |
| Parties | FARMERS' CO-OP. TRUST CO. v. FLOYD et al. |
| Court | Ohio Supreme Court |
[Copyrighted Material Omitted]
Error to the circuit court, Jefferson county.
The original action was commenced in the court of common pleas of Jefferson county, on the 3d day of January, 1885, by the Farmers' Co-operative Trust Company, the plaintiff in error, against John Floyd, Davidson S. Gault, John Medill, A C. Ault, and John F. Hartshorn, who are the defendants in error here, and William M. Lee, J. D. Whitham, Benjamin Griffith, R. C. Vance, S. N. Orr, John Farris, John Coad Nathaniel Wells, and Virginius P. Duvall. Summons was duly served upon those who are defendants in error in this court but no service was obtained upon the other defendants in the action below. On the 8th of May, 1885, the plaintiff filed an amended petition, which (omitting the caption) is as follows: ‘ The said plaintiff complains of the said defendants and says that it is a corporation duly organized under the laws of and doing business in the state of Pennsylvania; that the said defendants, from the 6th day of May, 1878, until the 11th day of April, 1883, were associated together in the buying and selling of wool, and doing a general merchandizing business in wool, under the name and style of the ‘ Wool Growers' Exchange; ’ that the places of business of said association were at Steubenville, Jefferson county, Ohio, and the city of Philadelphia, state of Pennsylvania; that in the formation of said association the said defendants, John F. Hartshorn, Nathaniel Wells, S. N. Orr, Benjamin Griffith, William M. Lee, J. D. Whitham, A. C. Ault, Davidson S. Gault, Virginius P. Duvall, and John Floyd, under took, in their names as incorporators, to organize a corporation for said association under the laws of the state of Ohio, under the name of the ‘ Wool Growers' Exchange,’ and did obtain a pretended certificate of incorporation from the secretary of state of the state of Ohio for that purpose, but said plaintiff avers that said defendants, or either of them, or any person for them or on their behalf, never had or procured said association to be properly or legally incorporated under the laws of the state of Ohio, or of any other state. Said plaintiff avers that said pretended incorporators set forth in their said pretended certificate, filed with the secretary of state, that the capital stock of said organization shall be fifty thousand dollars, ($50,000,) and yet they, said pretended incorporators, gave notice to the pretended stockholders to meet for the purpose of choosing directors when less than $3,000 of the capital stock had been subscribed, and less than $2,000 of the capital stock paid in, and said pretended stockholders, including said incorporators, did meet on the 19th day of June, 1878, and held an election under said notice, and elected said defendants, William M. Lee, president; John Floyd, vice-president; J. D. Whitham, treasurer; Benjamin Griffith, secretary; and Davidson S. Gault, R. C. Vance, S. N. Orr, John Medill, John Farris, and John Coad, directors of said pretended corporation. Plaintiff says that afterwards, to-wit, March 16, 1881, the said defendant A. C. Ault was added to said pretended board of directors. Plaintiff says that at no time has there been more than $3,000 of the pretended capital stock of $50,000 of said pretended corporation subscribed, nor more than $2,000 paid in, and that all of said defendants, incorporators, officers, and directors knew during all the time they conducted the business of said association that not more than $3,000 of the capital stock had been subscribed, and not more than $2,000 paid in. Said plaintiff further says that said incorporators, nor any of them, nor any person for them, gave any notice by publication of the opening of the books of said corporation for subscription to the capital stock; neither were the books ordered opened, nor in fact opened, for subscription to the capital stock. Said plaintiff further says that from the time of the organization of said pretended corporation or association until its close by assignment, on the 11th day of April, 1883, said defendants had control of the affairs of said association and did a large business in the buying and selling of wool, amounting to thousands of dollars annually, borrowed large sums of money, contracting a large indebtedness. Plaintiff further says that on or about April 1, 1881, said defendants removed the business of the said association to Philadelphia, state of Pennsylvania, contrary to the provisions of the pretended charter of said association. Plaintiff says that between the 1st day of August and the 1st day of December, A. D. 1882, it sold to said defendants, doing business under the name of the ‘ Wool Growers' Exchange,’ as aforesaid, 31,840 pounds of wool, which was delivered to said defendants at the city of Philadelphia, state of Pennsylvania, and that on the 8th day of January, 1883, there was a balance due said plaintiff from said defendants on account of said wool so sold and delivered to them, the sum of $3,195. Plaintiff says that the said pretended charter obtained by said defendants was under the act of the general assembly of the state of Ohio, entitled ‘ An act supplementary to an act entitled ‘ An act to provide for the creation and regulation of incorporated companies in the state of Ohio,’ passed May 1, 1852,' passed April 13, 1867, as amended April 20, 1874, as amended April 11, 1876, as amended March 12, 1877, as amended March 28, 1878, and that said pretended charter sets forth the object of said association as follows: ‘ That we have associated ourselves together for the purpose of forming an organization to establish a wool-house, and handle wool, merchandise, produce and furnishing supplies to wool-growers and others, on commission and purchase or sale, or in such other manner as will be for the best interest of the stockholders herein, and to do a general commission business in the articles above enumerated, and also for the purpose of disseminating through bureaus or journals useful knowledge and information pertaining to the improvement and protection of wool-growing interests.’ Plaintiff says that under said pretended charter and said act of the general assembly of the state of Ohio, under which the said pretended charter was obtained, said defendants had no authority or power as a corporation to buy or sell wool, and that therefore all of said acts of said defendants in a pretended corporate capacity, in the buying and selling of wool, and in the buying of said wool from said plaintiff, were ultra vires and invalid. Plaintiff says that said defendants, on the 8th day of January, 1883, through said defendant J. D. Whitham, their agent, executed and delivered to plaintiff, as evidence of said indebtedness, a promissory note, of which the following is a true copy: Plaintiff further says that no part of said sum has been paid. Plaintiff says that at the time of the sale of said wool and the acceptance of said promissory note it had no knowledge of the manner in which said defendants were conducting said business, but relied upon all the members of said association, jointly and severally, for the payment of their said claim. Said plaintiff further says that said Wool Growers' Exchange, as a corporation or association, is wholly insolvent, having no property whatever out of which it can make its said claim, and that the debts against said Wool Growers' Exchange are more than $40,000. Plaintiff says that at the time of the selling of said wool and the issuing of said promissory note as aforesaid all of said defendants were the active business managers of said association, and had full knowledge of the failure of said association, as aforesaid, to obtain and carry into effect a complete charter, and had also full knowledge that the buying or selling of wool was beyond the scope and authority of said pretended corporation as aforesaid. Plaintiff avers that said defendants, J. D. Whitham, R. C. Vance, S. N. Orr, and A. C. Ault, did business under their initials, and that plaintiff does not know, and cannot ascertain, their full name. Plaintiff therefore says that said defendants are jointly and severally indebted to said plaintiff in the sum of $3,195, with interest from the 8th day of January, A. D. 1883. Wherefore plaintiff prays judgment against said defendants, and each of them, for same sum of $3,195, with interest upon the same from the 8th day of January, 1883, and costs of suit.'
Hartshorn made default. The other defendants who were served with process demurred generally to the amended petition, and after the ...
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