Harwood v. Masquelette

• Citation: 95 Ind.App. 338,181 N.E. 380
• Decision Date: 02 June 1932
• Docket Number: No. 14376.,14376.
• Parties: HARWOOD v. MASQUELETTE et al.
• Court: Court of Appeals of Indiana

95 Ind.App. 338

181 N.E. 380

HARWOOD

v.MASQUELETTE et al.

No. 14376.

Appellate Court of Indiana, in Banc.

June 2, 1932.

Appeal from Grant Circuit Court; J. F. Charles, Special Judge.

Action by G. Carlton Harwood against Harry A. Masquelette and another. From an adverse judgment, plaintiff appeals.

Reversed, with instructions.

Condo & Batton, of Marion, for appellant.

Lett & Lett, of Marion, for appellees.

KIME, P. J.

This was an action by appellant against appellees to quiet the title to certain real estate located in Grant county, Ind.

The original complaint was in two paragraphs, but later an additional third paragraph of complaint was filed. The first and second paragraphs of complaint were afterwards withdrawn, and the defendants, Harry Masquelette and Ella Masquelette, filed their separate and several demurrer to the additional third paragraph for want of facts, with memorandum. The court sustained said demurrer. Upon plaintiff's refusal to plead further, the court rendered judgment on the ruling on the demurrer to the additional third paragraph of complaint. The judgment was that plaintiff take nothing and that he pay the costs of the action.

Appellant is now prosecuting this appeal, based on the adverse ruling above stated, and assigns as error that “the Court erred in sustaining appellees' separate and several demurrer to the additional third paragraph of appellant's complaint.” This is the sole alleged error relied upon for the reversal of this cause.

The facts as alleged in appellant's complaint are, in substance, as follows: That on and for a number of years prior to the 27th day of October, 1922, plaintiff and defendant were engaged in business in the city of Marion, Ind., as partners, said defendant owning an undivided one-third interest in said partnership and its property, and plaintiff owning an undivided two-thirds interest therein; that, during the time said plaintiff and defendant were engaged in business as partners, the said partnership became the owner, by various conveyances in fee simple, of certain described real estate; that on said 27th day of October, 1922, said plaintiff and defendant, together with their respective wives, entered into an agreement to incorporate the said business and to convey all of the property, of which the said partnership was then the owner, unto the said newly formed corporation, in full payment for all of its common capital stock as fully paid and nonassessable, which should be issued to them and their respective wives in the following proportions, to wit: Two hundred forty-five shares to the defendant Harry A. Masquelette and five shares to his wife, Ella B. Masquelette, four hundred ninety-five shares to the plaintiff, G. Carlton Harwood, and five shares to his wife, Pearl Harwood-that pursuant to said agreement, which was wholly verbal, the said parties did, on the 27th day of October, 1922, join in the execution of articles of incorporation for a corporation to be known as Harwood Automotive Company (the articles of incorporation being set out); that on the 1st day of November, 1922, said articles of incorporation were presented to the secretary of state of the state of Indiana, and approved and filed by him, according to law, and that on the 13th day of December, 1922, a copy of said articles of incorporation was duly filed in the office of the recorder of Grant county, Ind.; that on the 28th day of October, 1922, pursuant to the verbal agreement theretofore made between the said parties, as hereinbefore alleged, said plaintiff and defendant executed a bill of sale of all of the partnership property unto the said Harwood Automotive Company (the bill of sale being set out); that thereafter, and after the said corporation, Harwood Automotive Company, had been the owner and in possession of said real estate for several years, the plaintiff purchased all of said real estate from the said Harwood Automotive Company for a valuable consideration, and received a proper conveyance, or conveyances, therefor, and is now the owner of all of said real estate in fee simple, and has been in full possession thereof ever since his said purchase of same from said corporation; that since said purchase plaintiff has been at all times in full possession of all of said real estate, and has paid all of the taxes and other assessments levied against the same, all of which was known to the defendants, and all of which was done since the formation of said corporation without any objection or protest thereto on the part of either of the defendants; that the defendants are now claiming or asserting some interest in said real estate, the exact nature of which is unknown to plaintiff, but which interest, plaintiff avers, is without right and unfounded and casts a cloud upon plaintiff's title.

[1][2] Appellees, in the memorandum to their demurrer, allege that it affirmatively appears from the allegations in the complaint that the articles of incorporation were not filed with, and approved by, the secretary of state until several days subsequent to the execution of the aforesaid bill of sale, and therefore there was no grantee in existence at the time of the execution of said instrument, and the bill of sale is a nullity. This contention is in accord with the almost universally accepted rule that a deed to an immediate estate in land, made to a person not in being, or a corporation not yet organized, or having a valid existence, is a nullity and passes no title to any one. Harriman v. Southam (1861) 16 Ind. 190;Douthitt v. Stinson, 63 Mo. 268;Phelan v. County of San Francisco, 6 Cal. 531; Russell v. Topping, 5 McLean, 194, Fed. Cas. No. 12,163; David v. Williamsburg City Fire Ins. Co., 83 N. Y. 265, 38 Am. Rep. 418;United States v. Southern Colorado C. & T. Co. (C. C.) 18 F. 273;Thomas v. Marshfield, 10 Pick. (Mass.) 364;Duffield v. Duffield, 268 Ill. 29, 108 N. E. 673, Ann. Cas. 1916D, 859. But these decisions refer to the transfer of the legal title, and it is our opinion that they do not affect the equitable rights of the parties growing out of the transaction. White Oak Grove Benevolent Society v. Murray, 145 Mo. 622, 47 S. W. 501.

[3] We are unable to overlook the averment in the...