Johnson v. Okerstrom
| Decision Date | 03 December 1897 |
| Docket Number | 10,773--(89) |
| Parties | JOHN C. JOHNSON and Another v. PETER OKERSTROM and Others |
| Court | Minnesota Supreme Court |
Action in the district court for Hennepin county to recover $ 459.59 and interest. From an order, Smith, J., denying plaintiffs' motion for judgment notwithstanding the verdict for defendants or for a new trial, plaintiffs appealed. Affirmed.
Order affirmed.
W. A McDowell, for appellants.
In order that there be a de facto corporation the persons must have been capable of becoming a corporation de jure. Abbott v. Omaha, 4 Neb. 416; Greene v Dennis, 6 Conn. 293; Duke v. Taylor, 37 Fla 64; 1 Thompson, Corp. § 505; Evenson v Ellingson, 67 Wis. 634, and cases cited. A de facto corporation is one where an effort has been made to organize under some law authorizing the organization, but there has been an irregularity in its organization. Duke v. Taylor, supra. Where individuals have sought to become incorporated under a general law requiring certain acts to be done as prerequisite to the assumption of corporate powers, substantial performance of such acts is necessary to form a corporation good as against even a collateral attack. Mokelumme v. Woodbury, 14 Cal. 425; New York v. Mayor, 104 N.Y. 1; Bigelow v. Gregory, 73 Ill. 197; Cross v. Pinckneyville, 17 Ill. 54; Angell & Ames, Corp. § 81; Field v. Cooks, 16 La. An. 153; Agnew v. Bank, 2 Harr. & G. 478; Fire Dept. v. Kip, 10 Wend. 266; Bank v. Earle, 13 Pet. 519, 597; Granby v. Richards, 95 Mo. 106; Valk v. Crandall, 1 Sand. Ch. 179; Bergeron v. Hobbs, 96 Wis. 641.
Failure to have the articles signed was before the court in Valk v. Crandall, supra, and Unity v. Cram, 43 N.H. 636. In each of these cases a failure to sign the articles by the number of persons required by statute was held fatal. Bigelow v. Gregory, supra; Cook, Stockh, § 233; Kaiser v. Lawrence, 56 Iowa 104.
J. L. Brady and S. L. Pattee, for respondents.
Having objected to evidence on specific ground, and thereby directed the attention of the court and opposing counsel to that ground alone, appellants cannot now claim that the evidence should have been excluded upon a ground not presented to the court below. Schwartz v. Germania, 21 Minn. 245; Bedal v. Spurr, 33 Minn. 207; Gilbert v. Thompson, 14 Minn. 414 (544).
Wherever the admissibility of corporate records has come before the courts, the question has generally been, not whether the acts of a corporation could be proved otherwise than by the records, but whether the records were admissible at all, and if so to what extent. Schell v. Second Nat., 14 Minn. 34 (43); Com. v. Woepler, 3 S. & R. 29. Oral testimony of what was done at corporate meetings is not excluded by the fact that the meeting keeps minutes which may be evidence. Inglis v. Great Northern, 1 Macqueen, 112, 118; Miles v. Bought, 3 Q. B. 845; 1 Wharton, Ev. (3d Ed.) § 77. And it has even been held that corporate records may be disputed by oral testimony. St. Louis v. Tiernan, 37 Kan. 606; 6 Thompson, Corp. § 7735.
An association may be regarded as a de facto corporation where there is a law authorizing corporations of its class and powers, and where there has been an attempt in good faith to comply with the law. Cozzens v. Chicago, 166 Ill. 213; Evenson v. Ellingson, 67 Wis. 634; Methodist v. Pickett, 19 N.Y. 482; Finnegan v. Noerenberg, 52 Minn. 239; Eaton v. Walker, 76 Mich. 579; Georgia v. Mercantile, 94 Ga. 306. If a law exists under which a corporation of the kind claimed might be formed, and there has been a bona fide attempt to comply with it, slight evidence of user is all that is required, and much less than was shown in this case would satisfy the requirements of the law. Methodist v. Pickett, supra; Finnegan v. Noerenberg, supra; Trustees v. Froislie, 37 Minn. 447. In Washington v. Duke, 14 Iowa 14, articles of incorporation were adopted, officers elected, and the corporation entered upon the business prescribed in its articles, but the articles were not recorded as required by law until after the contract sued upon in the action was made. It was held to be a de facto corporation. See, also, Tarbell v. Page, 24 Ill. 46; Rondell v. Fay, 32 Cal. 354; Keene v. Brady, 48 Md. 184; Central v. Alabama, 70 Ala. 120; Snider v. Troy, 91 Ala. 224; Eaton v. Walker, supra; Haas v. Bank, 41 Neb. 754; Hamilton v. Clarion, 144 Pa. St. 34; Spahr v. Farmers, 94 Pa. St. 429; North v. State, 107 Ind. 356; Supreme v. Supreme, 94 Wis. 234; Hudson v. Green, 113 Ill. 618; Pape v. Capitol, 20 Kan. 440; Buffalo v. Cary, 26 N.Y. 75; Eaton v. Aspinwall, 19 N.Y. 119; Newcomb v. Reed, 12 Allen, 362; Walworth v. Brackett, 98 Mass. 98; Bakersfield v. Chester, 55 Cal. 98; Dannebroge v. Allment, 26 Cal. 286; Lamming v. Galusha, 81 Hun, 247; Bushnell v. Consolidated, 138 Ill. 67.
Nor does the fact that the articles of incorporation in this case were filed by the town clerk instead of being recorded, assuming that they were not recorded, take this case out of the rule. Walton v. Riley, 85 Ky. 413; Bushnell v. Consolidated, supra; Vanneman v. Young, 52 N. J. L. 403; Jewell v. Grand Lodge, 41 Minn. 405.
The plaintiffs, having dealt with the alleged corporation as such, are estopped from denying its corporate existence. Gartside v. Maxwell, 22 F. 197; Oregonian v. Oregon, 23 F. 232; Cochran v. Arnold, 58 Pa. St. 399; Livingston v. Drummond, 49 Neb. 200; Stout v. Zulick, 48 N. J. L. 599. The rule is the same whether the attempted corporation was under a special act or a general law. Merchants v. Stone, 38 Mich. 779; Bushnell v. Consolidated, supra; Spelling, Priv. Corp. § 57; Kleckner v. Turk, 45 Neb. 176; Johnston v. Gumbel (Miss.) 19 So. 100; McCarthy v. Lavasche, 89 Ill. 270; Newburg v. Weare, 27 Oh. St. 343; Board v. Shields, 62 Mo. 247; Worcester v. Harding, 11 Cush. 285; 6 Thompson, Corp. § 7648.
The variance in name does not affect the liability of defendants. Kentucky v. Wallace, 15 B. Mon. 35; Hoboken v. Martin, 13 N.J.Eq. 427; Northwestern v. Brant, 69 Ill. 658; Clement v. City, 5 Am. & Eng. Corp. Cas. 565. The alleged partnership of defendants was not proved. Snider v. Troy, supra; 2 Morawetz, Corp. § 748.
Action upon three promissory notes, payable to the plaintiffs, and signed "Schulin, Linden, Lindberg & Co." The complaint alleged that the several defendants were co-partners, doing business as such under the name by which the notes were executed. The answer denied that the defendants were partners, or ever executed the notes as such or otherwise, and alleged that the notes were executed by a corporation known as the Isanti & Chisago Farmers' Cooperative Association, doing business under the name of Schulin, Linden, Lindberg & Co. Upon this issue the defendants had a verdict, and the plaintiffs appeal from an order denying their motion for a new trial.
1. The plaintiffs introduced in evidence certain articles of association (plaintiffs' Exhibit E), executed by five of the defendants. Thereupon the defendants offered the following certificate, indorsed upon the articles:
The objection to the admission of this certificate and the ruling of the court were in these words:
The first error assigned is this ruling, on the ground that there was no evidence that John Linden was town clerk or that the signature to the certificate was his. No such objections were made on the trial and they cannot be made here for the first time. Bedal v. Spurr, 33 Minn. 207, 22 N.W. 390. The objection made when the certificate was offered directed the court's attention only to the claim that the instrument was one which was not entitled to be filed.
2. The trial court received oral evidence over the plaintiffs' objection and exception tending to show that the defendants, after executing Exhibit E, held meetings, adopted by-laws, issued stock and did business as a corporation.
The admission of this evidence is the basis of plaintiffs' assignments of error Nos. 2, 3, 4, 7, 8, and 12. The objection to the evidence was that the records were the best evidence of the acts of the alleged corporation. It appears from the record that minutes of the meetings of the association were kept by its secretary upon loose sheets of paper which were turned over to his successor. These memoranda were not produced on the trial or their loss proven. A book purporting to contain the by-laws was, however, produced, but no evidence was given as to their contents. A certificate of stock issued to one of the defendants was also given in evidence.
Whether the records of a corporation are the best evidence of its corporate acts, so as to exclude oral evidence of such acts where the records are capable of being produced, is one as to which the authorities are not agreed. But that question is not involved in this case, for the oral evidence received was for the purpose of showing the existence of a de facto corporation with which it was claimed the plaintiffs contracted. The oral evidence did not purport to give the contents of any records or documents, but was to the effect that, after defendants adopted and executed the articles of association, the supposed corporation did, in fact, hold meetings, adopt by-laws, elect officers who acted for the corporation, and that stock was issued. This evidence was...
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