Nickum v. Burckhardt
| Decision Date | 08 February 1897 |
| Parties | NICKUM v. BURCKHARDT et al. [1] |
| Court | Oregon Supreme Court |
Appeal from circuit court, Multnomah county; E.D. Shattuck, Judge.
Action by J.M. Nickum, receiver of the Oregon Fertilizing Company against Charles A. Burckhardt and F. Otto Burckhardt. From a judgment for defendants, plaintiff appeals. Reversed.
This is an action to recover for assessments levied upon unpaid capital stock of a private corporation. About June 18, 1893 some 13 persons, among whom were Guy Posson, who signed for 2 shares; J.E. Juston, for 4; F.C. Barnes, for 10; and H Pease, for 3,--subscribed the following agreement, each placing opposite his name the number of shares presumably intended to be taken: There were 78 shares subscribed for upon this paper, representing $7,800. On the 7th day of October, 1893, three of the subscribers executed duly acknowledged, and caused to be filed and recorded in the proper offices, articles of incorporation, incorporating the Oregon Fertilizing Company, specifying the object and business thereof to be "to transport wood, produce, and garbage, and to cremate such garbage, or to use the same for feed or fertilizing purposes." A little later, all the subscribers to said instrument, except the four above named, signed, with others, the following writing, which is contained in a minute book kept for the purpose of recording the proceedings of the corporation, to wit: "We, the undersigned, hereby subscribe for the number of shares of capital stock of the Oregon Fertilizing Company set opposite our respective names, and agree to pay for the same at such time or times as may be ordered by the board of directors hereafter to be elected." Only 69 shares of the capital stock were subscribed for upon this latter instrument. Subsequently all the subscribers to this instrument, together with Posson and Juston, signed an agreement to hold the first meeting of the stockholders on October 14, 1893, waiving the 30 days' notice required by law, and in pursuance thereof the meeting was held; all said signers being present, either in person or by proxy, but no others, and participating in the election of directors and other business. The corporators having certified to the result of the election, the directors elected took the oath of office, and at once organized by electing the officers of the board. To abate the action, the defendants plead that the plaintiff company is not an incorporation.
C.J. Schnabel and R.W. Wilbur, for appellant.
J.B. Thompson, for respondents.
WOLVERTON J. (after stating the facts).
It was urged at the hearing that the defendants ought to be estopped from alleging that the Oregon Fertilizing Company is not a corporation duly incorporated and organized in all respects as contemplated by law, inasmuch as they are subscribers or purchasers of stock subsequent to the alleged completed organization of the company; that, having dealt with the company in its corporate capacity, and having entered into contractual relations with it, they have recognized its existence as a body corporate; and that now, when sued upon their obligation to it as such a body, they should not be permitted to deny its legal existence. The doctrine here contended for is undoubtedly well grounded in the law, but it cannot be invoked in this case because not pleaded. The opportunity was afforded for setting up the supposed estoppel in the reply, but it was not done, and it is now too late to assert it. It is said that "if a party who has an opportunity to plead an estoppel upon which he relies fails to do so, but goes to issue on the fact, he thereby waives the estoppel, puts the matter at large, and the jury may disregard the estoppel, and are at liberty to find the truth." Note to Tyler v. Hall (Mo.Sup.) 27 Am.St.Rep. 337, 346; s.c. 17 S.W. 319. To the same effect are Bruce v. Insurance Co., 24 Or. 486, 34 P. 16, and Bays v. Trulson, 25 Or. 109, 35 P. 26.
This question disposed of, we come to another, more complex in its nature, and that is whether there has been an organization of the plaintiff corporation under and in pursuance of the general statutes providing therefor. The regularity of the execution and filing of the articles of incorporation is conceded. The persons subscribing the articles are known as the incorporators, and their powers and duties are purely statutory. They may open books and receive subscriptions to the capital stock. "They shall give notice to the subscribers to meet" at such time and place as they may designate for the purpose of electing directors. They shall act as inspectors at the first meeting for that purpose certify who are elected, and appoint the time and place of their first meeting. This enumeration comprises the substance of their powers. See section 3222. These are all acts necessary to and in furtherance of the completion of the organization. The organization is completed only when directors have been elected, and they have elected a president and secretary, which it is contemplated they shall do at their first meeting. From the time of the first meeting of the directors-- that is to say, from the time of the organization of the board--"the powers vested in the corporation are exercised by them, or by their officers or agents under their direction" (Hill's Ann.Laws Or. § 3225), thus relieving the incorporators of further duty or power in the premises, or, rather, their functions then cease because their duties have been fulfilled and their powers executed. From the date of its completed organization the incorporation may begin the prosecution of its enterprise or business. It may then sue and be sued, contract and be contracted with, and exercise any of the other statutory powers incident to its organization and the enterprise, business, pursuit, or occupation adopted. The corporation may elect its board of directors when one-half of the capital stock has been subscribed. Hill's Ann.Laws Or. § 3222; Railroad Co. v. Spillman, 23 Or. 587, 32 P. 688. And one question here is whether one-half of the capital stock had been subscribed when the board was elected. It seems to be supposed that, in order to constitute a person a subscriber to the capital stock of a corporation, he must have subscribed to the stock books of the concern after its articles of incorporation have been perfected and filed; and Mining Co. v. Ruble, 8 Or. 284, is...
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