Mitchell v. Jensen

• Decision Date: 06 June 1905
• Docket Number: 1598
• Citation: 29 Utah 346,81 P. 165
• Court: Utah Supreme Court
• Parties: MITCHELL v. JENSEN et al

81 P. 165

29 Utah 346

MITCHELL v. JENSEN et al

No. 1598

Supreme Court of Utah

June 6, 1905

APPEAL from District Court, Fifth District; J. E. Booth, Judge.

Action by John Mitchell against Heber C. Jensen and others, doing business under the firm name of the Southern Utah Mercantile & Lumber Company. From a judgment in favor of plaintiff defendants appeal.

REVERSED.

Wm. F Knox for appellants.

APPELLANT'S POINTS.

The testimony of A. J. Lowenberg showed that they had sold the goods sued for to the Southern Utah Mercantile and Lumber Company. Plaintiff in his complaint alleged that the Southern Utah Mercantile and Lumber Company, was a copartnership consisting of the two Jensen Brothers and Thomas C. Roche this allegation was squarely denied in the answer; this then was a material allegation of the complaint, and had to be established by competent proof; because a judgment was not sought against the alleged partnership, but a judgment was asked for and was in fact rendered against the two Jensen brothers; and liability against them could only be established by proving the copartnership as alleged in the complaint. Volume 15, Am. and Eng. Ency. Plead. and Practice, at 922, states: "If, however, the complaint alleges that the defendants were partners under a certain firm name, and that the contract sued on, was made with such firm, then the allegation of partnership is material, because it is necessary to show the identity of the defendants with the obligors in the contract sued upon." (Yocum v. Benson, 45 Ill. 435; Fetz v. Clark, 7 Minn. 217; Anabele v. Conklin, 25 N.Y. 470; Qechs v. Cook, 3 Duer 161; Laing v. Craig, 14 Tex. Civ. App. 134. Where a partnership has been alleged between all of the defendants, and this averment has been traversed, proof of the partnership as alleged is essential to the plaintiff's recovery. (15 Am. & Eng. Ency. Plead. and Prac., p. 941; Yocum v. Benson, 45 Ill. 435.) It is elementary that if the plaintiff fails to offer any proof, to show any liability on the part of the defendant, the latter does not have to proceed, and does not have to offer proof to rebut a proposition that has not been established, by even a scintilla of evidence. It follows, then, as of course, that defendants in this case was entitled to a judgment of nonsuit. (Couch v. Welch, 24 Utah 36; Cunningham v. R. Co., 4 Utah 206; Trihay v. M. Co., 4 Utah 464; Butte v. Pleasant V. Coal Co., 14 Utah 282.)

The question then is, were their acts sufficient to make the Southern Utah Mercantile and Lumber Company, a de facto corporation? It is not necessary for us to consider whether or not the efforts of the incorporators, were such a compliance with the provisions of our statute, so as to preclude an action being maintained by the Attorney General of the State of Utah to dissolve the corporation; for, this was not a direct attack upon the corporation. It was a collateral attack pure and simple. We contend that it is unquestionably the law, that only the Attorney General can institute a suit to dissolve a corporation for a failure to comply substantially with the statute in its formation. A stockholder cannot do so, neither can a creditor; and yet in this case, the court made a finding that the Southern Utah Mercantile and Lumber Company, was not a corporation. (2 Cook on Corporations, par. 632, and cases there cited; Southern P. R. Co. v. Orton, 32 F. 457; Spring Val. Waterworks v. City of San Francisco, 22 Cal. 432; North v. State, 107 Ind. 356; Musgrave v. Morrison, 54 Md. 161; Catholic Church at Lexington v. Tobbein, 82 Mo. 418; Buncombe Turnpike Co. v. McCarson, 18 N.C. 306; Boardman v. Keystone Co., 8 Lanc. Law Rev. 25; Connecticut & P. R. R. Co. v. Bailey, 24 Vt. 465.)

The judgment in this case runs against the two Jensen Brothers; and it seems very apparent that this could not be done, for goods sold to the Southern Utah Mercantile and Lumber Company, unless the three defendants were copartners. If they were copartners, then there should have been a finding to that effect; but no such finding was made by the court. Section 3169 of the Revised Statutes of Utah 1898, provides: "In giving the decision the facts found and the conclusions of law must be separately stated, and judgment must thereupon be entered accordingly." And, a judgment must find support in the findings. (Sec. 3169, Rev. Stats. Utah 1898; Kahn v. Central Smelting Co., 2 Utah 371; Reich v. Rebellion S. M. Co., 3 Utah 254; Blumenthal v. Asay, 3 Utah 507; Walley v. Des. Nat. Bank, 14 Utah 305; Maynard v. Locomotive Eng. Mut. Life Ins. Co., 14 Utah 458.) There were only three incorporators, being two less than the number required by our statutes; but it has been held by this honorable court, that, where there were only four incorporators; that fact did not prevent the alleged corporation. from being a de facto corporation. (Marsh and Olson v. Mathias, 19 Utah 350.) In the case of Jackson v. Crown Point Mining Company, 59 P. 238, this court held that the issuance of a certificate of incorporation by the Secretary of State is indispensable. We think that would be true in a direct proceeding by the Attorney General to dissolve a corporation; but we do not think that any third party could complain because the fee for filing a certified copy of the articles of incorporation had not been paid to the Secretary of State. "To constitute a de facto corporation, there must be either a charter or a law authorizing the creation of such a corporation, with an attempt in good faith to comply with its terms, and a user or attempt to exercise corporate powers thereunder." (Jones v. Espen Hdw. Co., 21 Col. 263; Abbott v. Omaha Smelting Co., 4 Neb. 416; Dawson v. McLeary, 87 Tex. 524; Stockton & L. G. R. Co. v. Stockton & C. R. Co., 45 Cal. 680; Thompson v. Candor, 60 Ill. 244; Willard v. Methodist Episcopal Church, 66 Ill. 55; Finnegan v. Noerenberg, 52 Min. 239; Hass v. Bank of Commerce, 41 Neb. 754; Attorney General v. Stephens, I. N.J. Eq. 369; Methodist Episcopal Ch. v. Pickett, 19 N.Y. 482; Buffalo and A. R. Co. v. Cary, 26 N.Y. 75.)

The Jenson Brothers, appellants in this case, never held themselves out as partners, took no part in the management of the business, and in fact their only connection with the Southern Utah Mercantile and Lumber Company, was the act of signing the articles of incorporation. "A partnership always exists as a result of a voluntary contract between the persons held to be partners and never exists solely by operation of law. Partnership by estoppel or holding out is only an apparant and not a real exception to this rule. (22 Am. and Eng. Ency. Law, p. 14.) Certainly there was no partnership contract between the defendants in this case. And there is not a scintilla of evidence which would tend to estop appellants from denying that a partnership did exist. Signing the articles of incorporation, which recited that the individual property of the stockholders should not be liable for corporate debts, which were on file and of record in the office of the county clerk, could certainly not make them partners. (Rutherford, et al. v. Hill et al., 29 P. 546; Blanchard v. Kaull, 44 Cal. 440; Fay v. Noble, 61 Mass. 188; Ward v. Brigham, 127 Mass. 24; Johnson v. Corser, 34 Minn. 355.)

We think the law is well settled that when a judge is called into a district other than his own, his powers are limited to the particular business he is called to hear and determine; if he is called to try only a particular case, he has no powers pertaining to any other case or matter which may come up, or which is pending in the district to which he has been called. (Wallace v. Helena Electric Railway Co., 24 P. 626.) A district judge may only do at chambers those things which he is expressly authorized to do by statute. (Conkling v. Ridgley, 112 Ill. 36; Newman v. Hammond, 46 Ind. 119; Nevitt v. Woodburn, 45 Ill.App. 417; Ellis v. Karl, 7 Neb. 381.) The judge's chambers are undoubtedly anywhere he may be in his district, and are co-extensive with his district. (In re Neagle, 39 F. 855.) All business must be transacted either in open court or at chambers, within the boundaries of the district; except interlocutory orders, which may be made any place in the State; this under express provisions of statute, (section 3324 of the Revised Statutes 1898.) The Session Laws of 1903, at page 55, defines "chambers" as being co-extensive with the district; and also states that "Judgments and orders of the district court may be entered either in term time or vacation and at chambers, in any county within the district." But these provisions practically declare the common law; and, do not apply to this case, because the judgment in this case was rendered December 29, 1902, and the Session Law of 1903 was not approved until March 12th of the last mentioned year. There is absolutely no provision of statute authorizing the judgment to be rendered outside of the district in which the action is pending; and, certainly no such powers was or is known to the common law. We, therefore, contend that Judge Booth had no authority or power to render judgment in this case at Provo City, in Utah county, Utah and in the Fourth Judicial District (Turner v. McIthaney, 6 Cal. 287; Sanchez v. Sanchez, 21 Fla. 346; Sherman v. Town Council of Thomaston, 67 Ga. 246; Welch v. People, 38 Ill. 20; People v. O'Neil, 47 Cal. 109; Filley v. Cody, 4 Col. 109; Backer v. Eble, 144 Ind. 287; Monroe v. Bartlett, 6 W.Va. 441; Bruce v. Doolittle, 81 Ill. 103; McClue v. Owens, 21 Iowa 133; Spear v. Fitchpatrick, 38 Iowa 127.)

Goodwin & Van Pelt for respondent.

RESPONDENT'S POINTS.

In the absence of a certificate of the judge stating that the bill of exceptions contains all the evidence offered on the trial this court will...