Ogden Packing & Provision Co. v. Wyatt

• Decision Date: 10 February 1922
• Docket Number: 3694
• Citation: 59 Utah 481,204 P. 978
• Parties: OGDEN PACKING & PROVISION CO. v. WYATT et al
• Court: Utah Supreme Court

204 P. 978

59 Utah 481

OGDEN PACKING & PROVISION CO. v. WYATT et al

No. 3694

Supreme Court of Utah

February 10, 1922

Appeal from District Court, Third District, Salt Lake County; Jno. F. Tobin, Judge.

Action by the Ogden Packing & Provision Company against W. C. Wyatt and others. Judgment for plaintiff, and defendants appeal.

AFFIRMED.

C. H Hart, of Salt Lake City, for appellants.

H. A Smith & Son, of Salt Lake City, for respondent.

THURMAN J. CORFMAN, C. J., and WEBER and FRICK, JJ., concur. GIDEON, J., being disqualified, did not participate in the disposition of this cause.

OPINION

THURMAN, J.

Plaintiffs procured judgment against defendants, as partners, in the district court of Salt Lake county for a balance of an account for goods, wares, and merchandise delivered to defendants at their special instance and request.

Defendants denied that they were partners during the period when the indebtedness was incurred, and affirmatively alleged that during said time they were a corporation, and that plaintiff had knowledge of the fact and dealt with them upon that understanding. This appears to be the only substantial issue involved in this appeal.

The evidence introduced by plaintiff tended to show that defendants' place of business was on Regent and Second South streets, Salt Lake City, Utah, at which place defendants carried on the business of selling meat and other provisions; that on or about November 20, 1918, prior to any business dealings between plaintiff and defendants, plaintiff made an investigation to determine the capacity in which defendants were carrying on said business, and ascertained that defendants were partners, but contemplated organizing as a corporation at some time in the future; that after that defendants purchased an order of meat for Thanksgiving Day, 1918, for which they paid cash; that thereafter defendants continued to purchase goods from plaintiff, making payments therefor from time to time until about the 11th day of June, 1919; that at that time defendants owed plaintiff a balance of $ 1,463.98, to recover which this suit was commenced and judgment obtained. The evidence of plaintiff's witnesses is also to the effect that plaintiff was never notified or had any knowledge that defendants had organized, or attempted to organize, a corporation, but that plaintiff proceeded all the time upon the understanding that defendants were partners and individually liable to pay for the goods furnished them by plaintiff.

Practically all of these propositions upon which plaintiff relies are categorically denied by defendants. The evidence introduced by them tends to show that defendants commenced negotiations among themselves as early as October, 1918, with a view to forming a corporation to carry on the business referred to, and accordingly drew up articles of incorporation, for that purpose; that they first fixed the capital stock at $ 2,500, but, afterwards increased it to $ 5,000; that the articles were signed by each defendant who subscribed for a substantial number of shares of the capital stock; that defendants then commenced the sale of meat and other provisions; that their first business with plaintiff was on or about Thanksgiving Day, 1918, as stated by plaintiff's witnesses; that on December 2, 1918, they filed the aforesaid articles of incorporation and oaths required in the office of the county clerk of Salt Lake county, and paid the fee therefor; that a certified copy of the articles thus filed was transmitted to the Secretary of State, but no filing fee was remitted at that time, and consequently no certificate of incorporation was issued; that about the month of March, 1919, defendant H. C. Lund, who was attending to the business of incorporating defendants, was notified by the Secretary of State that the certified copy of the articles of agreement was in his office awaiting the payment of filing fees, whereupon Mr. Lund went to the secretary's office and paid the amount required; that still no certificate of incorporation was issued by the Secretary of State, and upon inquiry it was ascertained that the articles had been returned to the county clerk from whom they were originally received; that the fee previously paid by Mr. Lund for filing the articles was returned to him, and thereafter paid to the Secretary of State. It appears that the certificate of incorporation was issued by that officer June 2, 1919. In the meantime, as heretofore stated, plaintiff and defendants had been doing business together, and the indebtedness had been incurred for which the action was brought.

It thus appears, according to the evidence submitted to the jury, that the plaintiff had the understanding all the time that it was doing business with a partnership in which each partner was responsible for any indebtedness incurred, while, on the other hand, defendants had the understanding that they were doing business as a corporation in which each shareholder was responsible only to the extent of his subscription to the capital stock.

The issues of fact were submitted to the jury under instructions given by the court. The jury resolved all questions submitted to it in favor of the plaintiff, and rendered a verdict for the full amount prayed for in the complaint.

While many errors are assigned relating to the exclusion and rejection of evidence, the writer is of the opinion that they are either entirely without merit, or, under the circumstances, were nonprejudicial. There were, however, exceptions taken to certain instructions given to the jury that require something more than a passing notice.

Before considering the instructions, lest it should be assumed that we have overlooked an important matter, we shall advert to one feature of the evidence as to which both plaintiff, and defendants spent considerable time and apparently manifested considerable anxiety. Plaintiff contended that defendants did business under the name and style of "Regent Street Market," while defendants contended that the business was done under the name and style of "Regent Street Market Company." The mind of the writer was puzzled from the beginning to the end of his investigation of the matters contained in the record to determine just what significance there was, or is, in respect to this matter upon which the parties spent so much valuable time. Whether defendants did business as "Regent Street Market" or as "Regent Street Market Company," as I view the case, had no tendency whatever to determine the vital question as to whether defendants did business as a partnership or as a corporation. Either as a partnership or as a corporation they had the undoubted right to adopt any name they chose, and the adoption of either of the names suggested would have no tendency whatever to settle the matter in dispute. So much for that.

Now as to the instructions to which defendants excepted and upon which they rely for a reversal of the judgment. Both plaintiff and defendants agree that instruction No. 12 as given by the court in all probability had controlling influence upon the minds of the jury in arriving at their verdict. The defendants excepted to the instruction as a whole. We quote the same at length.

"You are instructed that under the evidence in this case there was no de facto corporation organized by the defendants or any of them, in any event until it filed articles of incorporation with the county clerk of Salt Lake county."

The contention of respondents is that defendants were not even a de facto corporation until they filed their articles of incorporation with the county clerk December 2, 1918, and that prior to that date whatever business they did with plaintiff was in any view of the case done as partners, and not otherwise; that, having commenced as partners in their dealings with the plaintiff, and having established a credit with plaintiff as such, that relationship was presumed to continue indefinitely, even though defendants in the meantime had organized as a corporation, unless it appeared that plaintiff had knowledge of the change. On the other hand, defendants contend that from the time they signed their articles of agreement and commenced to transact business thereunder, which was shortly before they commenced to do business with the plaintiff, they were a de facto corporation, and, as against all persons except the state of Utah, they had the right to exercise the powers of a corporation de jure the same as if they had received the certificate of incorporation from the Secretary of State. These, as we understand it, are the contentions of the respective parties from which it will be seen the instruction complained of probably had a decisive influence in determining the conclusion to be reached by the jury. The full effect of this instruction, however, cannot be accurately estimated without reading in connection therewith instruction No. 21, to which objection was also made. That instruction reads as follows:

"If you find from a preponderance of the evidence that the defendants, or any of them, at or previous to the time that the business of the meat market located at No. 41 East Second South Street was commenced, joined together to carry on the business of conducting the meat market in question for their common or community interest in the profits, and if you further find that said market was conducted and carried on pursuant to such arrangement up to December 2, 1918, then I charge you that all of the defendants who made such arrangement and engaged in such business pursuant to such arrangement became and were partners in said business during said time, and if you find that the defendants, or any of them, were partners, as hereinbefore defined, with respect to said business during said...