Marion Bond Co. v. Mexican Coffee & Rubber Co.
| Decision Date | 17 December 1902 |
| Docket Number | 19,982 |
| Court | Indiana Supreme Court |
| Parties | Marion Bond Company, Trustee, v. Mexican Coffee & Rubber Company et al |
Rehearing Denied May 14, 1903.
From the Superior Court of Marion County; J. L. McMaster, Judge.
Action by the Marion Bond Company against the Mexican Coffee & Rubber Company and others. From a judgment for defendants plaintiff appeals. Transferred from Appellate Court, under § 1337u Burns 1901.
Reversed.
S. M. Richcreek, for appellant.
C. E. Averill and C. F. Remy, for appellees.
Action by the appellant against the appellees to enforce the collection of unpaid assessments for street improvements. Answers in abatement were filed by the appellees. Demurrers to these answers were overruled, and, the appellant refusing to plead further, judgment was rendered on the demurrers. The answers set out the articles of association of the appellant and alleged that at the time they were filed there was no statute of this State authorizing the formation of a corporation for the purpose named in said instrument; that the appellant had no legal existence as a corporation; and that its pretended articles of association were void.
The proceedings for the incorporation of the appellant were taken under the act of 1887 (Acts 1887, p. 41) for the organization of voluntary associations, and the amendments of that act. The articles in question were filed in the proper office July 27, 1899. The act of March 5, 1895 (Acts 1895, p. 99), amending the act of 1887, supra, provided that any number of persons might associate themselves by written articles, to be signed by each person who might be a member at the time of organization, specifying the objects of the association, the corporate name adopted to designate such objects, the name and place of residence of each member or stockholder, with an impression and description of the corporate seal, and in what manner persons should be elected or appointed to manage the business of the association. The act applied to any association which had been or might afterwards be formed for either of the purposes, eighteen in number, specified in the act. Among these purposes were the following: "(9) * * * Buying, holding and selling real estate." "(13) * * * Buying and selling merchandise, and conducting mercantile operations." "(16) * * * Carrying on the business of insuring titles to real estate, and to make abstracts, loans and collections in connection therewith, and otherwise act as agent, attorney in fact and trustee for persons and corporations."
The articles filed by the appellant thus stated the purposes of its organization: "The object of our said association shall be the buying and selling merchandise, and conducting mercantile operations; buying and selling real estate; buying and selling state, county, municipal, and all other bonds; of borrowing and loaning money; of buying and selling promissory notes, bills of exchange, accounts, choses in action, fees, and all other evidences of indebtedness; and to act as agent, attorney in fact, and trustee, for persons and corporations."
Appellees contend that, under the statute, a voluntary association could be formed for a single purpose only, and that as the articles of the appellant designated more than one of the purposes specified in the statute, and other purposes not authorized at all, the articles were void, the association never had a corporate existence, and therefore could not act as a trustee or maintain a suit in a corporate capacity. No other defect or irregularity in the proceedings for the incorporation of the appellant is pointed out.
We are unable to adopt the views of the appellees. The statute authorizes the organization of voluntary associations for some of the purposes mentioned in appellant's articles. Among these are the franchises of buying and selling merchandise or real estate. These purposes were expressly named in the statute. The answer in abatement admits that the corporate organization of the appellant was regular and complete in all respects excepting in the designation of the purposes of its incorporation. It is evident that the members attempted in good faith to form a corporation under the statute. In the statement of the objects contemplated perhaps they fell into error in naming too many, but this irregularity did not, in our opinion, render the proceedings void, or deprive the association of its corporate character and powers. So far as the pleadings disclose, appellant has never engaged in any business or done any corporate act not authorized by its articles of association. For the purposes of this suit, at least, it was a corporation de facto, if not de jure. Here was a statute under which a corporation de jure could be formed for the purpose of buying and selling property of certain kinds, an attempt to organize under that statute, and an exercise by the proposed association of corporate powers in the execution of that purpose. In selling merchandise or real estate the appellant had the right to receive in payment street improvement bonds, or like instruments. If they were not paid, one of its general powers as a corporation was the right to sue upon the claims. What the effect of the supposed irregularity in the organization of the appellant might be in a direct proceeding by the State in the nature of quo warranto we need not say. The statute under which the appellant was incorporated did not make the irregularity complained of a ground of forfeiture of the corporate franchises. It does not appear that the appellant has attempted to exercise more than one of the particular franchises mentioned in its written articles.
It is said in Thompson, Corporations, § 229:
In proceedings by the State in the nature of quo warranto, where a corporation assumes to exercise a particular franchise, which it has no power, under its charter, to use, the judgment may be and generally is that it be ousted of the particular franchise, without affecting the right of the corporation to retain and enjoy its proper franchises. People v. Rensselaer, etc., R. Co., 15 Wend. 113, 30 Am. Dec. 33; Commonwealth v. Delaware, etc., Canal Co., 43 Pa. 295, 301; State, ex rel., v. City of Topeka, 31 Kan. 452, 2 P. 593; State, ex rel., v. Regents, 55 Kan. 389, 40 P. 656, 29 L. R. A. 378.
But where the corporation has been guilty of acts which, by statute, are made a cause of...
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