Laflin & Rand Powder Co. v. Sinsheimer

• Decision Date: 07 March 1877
• Parties: THE LAFLIN AND RAND POWDER COMPANY v. LOUIS SINSHEIMER, JACOB PLACK and JOSEPH RITTENBERG.
• Court: Maryland Court of Appeals

46 Md. 315

THE LAFLIN AND RAND POWDER COMPANY v. LOUIS SINSHEIMER, JACOB PLACK and JOSEPH RITTENBERG.

Court of Appeals of Maryland

March 7, 1877

APPEAL from the Superior Court of Baltimore City.

The case is stated in the opinion of the Court.

Exception.--At the trial, the plaintiff offered the two following prayers:

1. If the jury shall find that at the time the articles dated February 6th, 1876, were signed, and the acknowledgment and affidavits of Kraus and Rittenberg thereto annexed, and were made at the time when said articles so acknowledged with said affidavits annexed, were filed with the Secretary of the State of West Virginia, for the purpose of procuring the certificate of incorporation of the Lancaster Furnace and Mining Company offered in evidence, and at the time when said certificate was so issued, Lewis and Jacob Kraus, whose names are signed to said articles, had in fact paid nothing on account of their subscriptions, and that they nevertheless treated themselves, and were treated by their associates, as corporators, and were so represented to the Secretary of State of West Virginia for the purpose of procuring the same then said Lancaster Furnace and Mining Company was not a body politic, and those persons who were acting under that name and interested in the profits of said pretended company, at the time the debt sued for was contracted, are personally liable for said debt, if the jury find the same.

2. The plaintiff prays the Court to instruct the jury, that under the law of West Virginia, offered in evidence, if they find that at the time the certificate of incorporation of the Lancaster Furnace and Mining Company, offered in evidence dated 10th day of February, 1874, was issued by the Secretary of State of West Virginia, the persons whose names are signed to the articles of association, dated February 6th, 1874, offered in evidence and recited in said certificate, or any one or more of them, had not in good faith paid in for the uses of the company, to some person agreed upon to receive the same for the intended corporation, the full amount of ten per cent. upon the par value of the stock subscribed for by said persons, or by one or more of them, and that they did not in fact pay said ten per cent., and that notwithstanding said failure of said subscribers, or one or more of them, to pay said amount of ten per cent., that the subscribers had so failed to pay said ten per cent., were treated as corporators, and suffered as such to sign said articles of February 6th, 1874, and were represented to the Secretary of State of West Virginia, as corporators, for the purpose of procuring said certificate of incorporation from said Secretary of State, then said Lancaster Furnace and Mining Company was never validly incorporated, and such of the persons composing the said pretended company, as were members of it at the time the debt sued for was contracted, are personally liable to the plaintiff for said debt, if said debt be found by the jury.

The Court, (DOBBIN, J.,) rejected both prayers, and granted the following instructions:

1. That there is no evidence upon which the jury can find for the plaintiff on the first or second count in the narr.

2. That the plaintiff having given in evidence the Statutes of West Virginia, under which the Lancaster Furnace and Mining Company claims to have been incorporated, and the certificate of the Secretary of State of said State, declaring the existence of said corporation, it is incompetent for this Court, to inquire collaterally into the validity of said corporation, and the plaintiff cannot recover upon the third and fourth counts in the narr. The plaintiff excepted.

The jury rendered a verdict for the defendants, and judgment was entered accordingly. The plaintiff appealed.

The cause was argued before BARTOL, C.J., STEWART, BRENT, GRASON, MILLER and ROBINSON, J.

Charles Marshall, for the appellant.

It seems to be well settled that the omission or non-performance of an Act made a condition precedent to the existence of a corporation, prevents it from becoming a corporation. Frost vs. Frostburg Coal Co., 24 Howard, 282; Vulk vs. Crandall, 1 Sanford, ch. 179; Taggart vs. Western Md. R. R. Co., 24 Md., 591; Lord, &c. vs. Essex B. A., No. 4, 37 Md., 320; Spencer vs. Cooks, 16 La. An., 153-4; Harris vs. McGregor, 29 Cal., 124; Wheadon vs. Peoria R. R. Co., 42 Ill., 494; Crooker vs. Crane, 21 Wendell, 212.

It will be observed that in several of the cases above referred to, particularly 24 Howard, 282; 42 Ill., 494; 21 Wendell, 212, the omission or non-performance was not a matter that appeared on the face of the proceedings of incorporation, but was a matter dehors, and established by proof. Hughes vs. Antietam Co., 34 Md., 321; Oler vs. B. & O. R. R. Co., 41 Md., 590.

[NOTE.--Other points omitted as not adverted to by the Court.--REPORTER.]

Isador Rayner, for the appellees.

BRENT J., delivered the opinion of the Court.

This is an action of assumpsit to recover from the appellees for merchandise sold, and for which it is claimed they are personally liable. The declaration contains three counts--the first, for goods sold and delivered--the second, for money found due on an account stated, and the third, is a special count.

It is very full and lengthy, but alleges in substance, that the defendants pretending there was a company duly incorporated under the laws of West Virginia, by the name of the Lancaster Furnace and Mining Company, induced the plaintiff to sell certain goods to said company; that the plaintiff afterwards discovered that the company was not in fact incorporated, that for reasons, which are specially set out, the necessary acts and proceedings to constitute a valid incorporation under the laws of West Virginia had not been performed and taken, that the said pretended corporation was but a voluntary unincorporated association, the members of which are personally liable for the goods sold to them under the name of the pretended company, and which goods were in fact received by the defendants.

The defendants pleaded, that they were not indebted as alleged, and that they did not promise as alleged.

The incorporation of the defendants under the laws of West Virginia was placed in evidence, and...