Johnson v. Corser

• Decision Date: 12 December 1885
• Parties: JOHNSON v CORSER AND OTHERS.
• Court: Minnesota Supreme Court

34 Minn. 355

25 N.W. 799

JOHNSONvCORSER AND OTHERS.

Supreme Court of Minnesota.

Filed December 12, 1885.

Appeal from an order of the district court, Hennepin county.

Christianson & Gjertsen and Thos. Canty, for respondent, John Johnson.

Rea, Kitchel & Shaw and Scott, Longbrake & Van Cleve, for appellants, E. S. Corser and others.

DICKINSON, J.

In the spring of 1884 the defendants entered into articles of association, intending to acquire a corporate character, and probably supposed that this purpose had been accomplished. No incorporation was, however, effected. The articles of association executed by the defendants declared the purpose of the proposed corporation to be to secure the extension of a certain street in Minneapolis, and to improve and beautify the same. They provided for no capital stock, but that the funds necessary for the accomplishment of the contemplated purpose should be raised by subscription from the members. The usual officers were named, and a board of five directors provided for; meetings of the members were held; officers and a board of directors elected; by-laws adopted, which provided for the appointment of an executive committee, whose duty was declared to be to direct and superintend the work and to employ the necessary labor; subscriptions were made by all of the defendants, excepting Stark, for the purposes of the association; a contract was made between the association, by its adopted name, and certain contractors, (Eagan & Salter,) for grading and improving the street; and the performance of the work under the contract was entered upon. The plaintiff was an employe of Eagan & Salter, and engaged, with others, in the work. During the progress of the work, the employes of the contractors, becoming dissatisfied with their employers, ceased to work. Then two of the defendants, Mathews and Riebeth, who were respectively vice-president and secretary of the association, made an agreement with the laborers, the precise nature of which is in dispute. The evidence on the part of the plaintiff is sufficient to support what must have been the conclusion of the jury, that the agreement was that if the men would go on with the work, the association would pay them; while the evidence for the defendants tended to show that the agreement was merely to pay directly to the laborers the money which should be due to Eagan & Salter on their contract. By this action the plaintiff seeks to recover against the defendants individually upon this agreement.

The attempt to become incorporated was ineffectual to limit the individual liability of the associates; and upon any contract which they may be found to have authorized to be made, or which they may have ratified, although in terms the contract was made as the contract of the association or assumed corporation, the members may be held to an individual responsibility. Hess v. Werts, 4 Serg. & R. 356;Pettis v. Atkins, 60 Ill. 454;Bigelow v. Gregory, 73 Ill. 197;Garnett v. Richardson, 35 Ark. 144;Kaiser v. Lawrence Sav. Bank, 56 Iowa, 104;S. C. 8 N. W. Rep. 772;Abbott v. Omaha Smelting Co., 4 Neb. 416;Field v. Cooks, 16 La. Ann. 153; Jessup v. Carnegie, 44 N. Y. Super. Ct. (12 Jones & S.) 260. While, if the other contracting party were to charge the defendants in their assumed corporate capacity, they might not in some cases be heard to deny their corporate existence, yet, there being in fact no such existence, the plaintiff may go behind the assumed corporate character, and hold the real principals to responsibility for the acts of those whom they may have clothed with authority to act in behalf of the association. Bigelow v. Gregory, supra; Kaiser v. Lawrence Sav. Bank, supra; Jessup v. Carnegie, supra; Hurt v. Salisbury, 55 Mo. 310.

We deem the evidence to have been sufficient to sustain a conclusion on the part of the jury that all of the defendants, the members of the association, authorized the prosecution of the contemplated work, and knew that it was actually being carried forward under the direction of the appointed agents of the association; that the executive committee was authorized by the association to prosecute the work as its agent, and for that purpose to employ laborers; that the alleged contract upon which this action is brought, was made by two members of...