Reinhard v. Virginia Lead Min. Co.
| Decision Date | 22 December 1891 |
| Citation | 18 S.W. 17,107 Mo. 616 |
| Parties | Reinhard et al., Appellants, v. The Virginia Lead Mining Company et al |
| Court | Missouri Supreme Court |
Appeal from Franklin Circuit Court. -- Hon. Rudolph Hirzel, Judge.
Affirmed.
J. C Kiskaddon for appellants.
(1) For the grant of an immediate estate in possession the grantee must be in esse, and the deed may be avoided by showing that the grantee came into being after the delivery of the deed. Hulick v. Scovill, 4 Gilm. (Ill.) 191; Miller v Chittenden, 2 Iowa, 368; Hall v. Leonard, 1 Pick. (Mass.) 27; Morris v. Stephens, 46 Pa. St. 200; Hornbeck v. Westbrook, 9 Johns. (N. Y.) 73; Chase v. Palmer, 29 Ill. 306; Douthitt v Stinson, 63 Mo. 268; Frank v. Drinkhahn, 76 Mo. 508. (2) Under the general corporation laws of Missouri a corporation is in esse only from the time of filing its certificate of incorporation in the office of the secretary of state; or, in the case at bar, perhaps from the time it is recorded in the office of the recorder of deeds. 1 Wag. Stat. 1872, p. 333, sec. 2; sec. 4. p. 289; Hurt v. Salisbury, 55 Mo. 310; Richardson v. Pitts, 71 Mo. 128; Martin v. Fewell, 79 Mo. 401; Smith v. Warden, 86 Mo. 382. (3) A party sued by something bearing an apparently corporate name on a contract made with it in that name may deny that it is a corporation, or may allege that it is not a corporation. If it was not in existence at the time the contract was made it follows necessarily that no contract was made. It takes at least two parties to make a contract. If there was only one party it is no contract, and an estoppel cannot create a party which never existed. Dobsons v. Simondson, 86 N.C. 492; Norwood's Case, 32 Hun (N. Y.) 196; McCulloch v. Norwood, 58 N.Y. 384; Hoereth v. Franklin, 30 Ill. 151, Thornton v. Marg. Frt. Co., 123 Mass. 32. (4) To constitute a corporation de facto there must be a name apparently corporate, there must be a corporate form of organization, there must be a color of right to exercise corporate franchises emanating, from the state, and there must be the exercise of corporate powers under such color of right. Hoereth v. Franklin, 30 Ill. 151; Harriman v. Southam, 16 Ind. 190; Type Foundry v. Jones, 14 Ind. 89. (5) The want of existence of an organization assuming to be a corporation can be taken advantage of collaterally, where it has omitted conditions precedent to its valid organization. It is not a question of the regularity of the organization, it is a question of corporate existence. Granby Mining Co. v. Richards, 95 Mo. 106; Harris v. McGregor, 29 Cal. 124; McIntire v. McLean Ass'n, 40 Ind. 104; Furniture Co. v. Herkimer, 46 Ind. 142; Cleg v. Co., 61 Iowa 121; Kaiser v. Bank, 56 Iowa 104; Gent v. Ins. Co., 107 Ill. 652; Garnett v. Richardson, 35 Ark. 144. (6) An invalid deed works no estoppel to anybody. Mason v. Mason, 140 Mass. 63; James v. Wilder, 25 Minn. 305; Sherlen v. Whelen, 41 Wis. 88. (7) An estoppel must be mutual. If it binds one party it must bind the other. But a contract made with a corporation before it comes into existence does not bind it, although it may have received the benefit of it. Railroad v. Sage, 65 Ill. 328; Ins. Co. v. Hart, 31 Md. 59; Match Factory v. Hapgood, 141 Mass. 145. (8) The grantee in a deed poll holds adversely to his grantor and all the world, and can dispute everybody's title except his own. Macklot v. Dubreuil, 9 Mo. 476; Joeckel v. Easton, 11 Mo. 119; Blair v. Smith, 16 Mo. 273; Cutter v. Waddingham, 33 Mo. 272. (9) Where a grantor makes two deeds of the same property to two grantees, the second grantee is not estopped from questioning the validity of the deed to the first grantee. It is not a question of estoppel at all; but it is a question of which grantee, the first or second, got the title of the grantor. If the first grantee had no existence, either de jure or de facto, then the second grantee gets the title. Bigelow on Estop. [5 Ed.] 345, et seq.; Cook v. Parham, 63 Ala. 456; Scates v. King, 110 Ill. 456; Weyh v. Boylan, 85 N.Y. 394; Gorton v. Roach, 46 Mich. 294. (10) It is a mistake to say that the defendant is estopped to deny the corporation. His contract is prima facie evidence of the corporation, and, if nothing more is offered, is conclusive. Mor. on Corp. [1 Ed.] sec. 138; Harriman v. Southam, 16 Ind. 190; Jones v. Type Foundry, 14 Ind. 89; Bank v. Willard, 25 N.Y. 574; Bank v. Bank, 21 N.Y. 572. (11) Under the evidence the possession of the plaintiffs was sufficient to maintain this suit. Campbell v. Allen, 61 Mo. 581; Dyer v. Krakauer, 14 Mo.App. 39; Bank v. Chambers, 96 Mo. 459; Railroad v. Dewess, 23 F. 519; Douglass v. Nuzum, 16 Kan. 515. (12) The deeds and records attacked by plaintiffs in this proceeding are clouds on their title. Bank v. Evans, 51 Mo. 335; State, etc., v. Philips, 97 Mo. 331.
John W. Booth and T. B. Crews for respondents.
(1) A corporation de facto (not being a corporation de jure) is a corporation formed and existing without legal authority. 2 Morawetz on Private Corporations [2 Ed.] section 746, says of such a corporation: "A corporation actually in existence can enter into a contract, though the association may have been formed without authority and its acts be forbidden by law, and the legal validity of such contracts will depend wholly upon the effect of the legal prohibition." Secs. 745, 747. "If the corporate association has been actually formed in violation of law, the courts can generally best serve the interests of justice by recognizing the association as a corporation, although an unlawful one, until its actual existence has been terminated by direct means." (2) A grantor who has conveyed property to a corporation existing de facto cannot, after having received the purchase money, treat the conveyance as a nullity merely because the corporation was formed without legislative authority. The transaction will be held valid and binding against all persons but the state. 2 Morawetz on Private Corporations [2 Ed.] sec. 753; Ragan v. McElroy, 94 Mo. 349; Smith v. Sheely, 12 Wallace (U.S.) 358. (3) Nathaniel Sands, Francis A. Sands and R. R. Hazard, having executed articles of association for the formation of a corporation under the laws of the state of Missouri, and duly acknowledged the same, and having thereupon organized the board of directors, and elected officers of said association, and proceeded by the name of the Virginia Lead Mining Company to buy and take a conveyance of said land from Maupin, to the Virginia Lead Mining Company, and Maupin having dealt with such association as a corporation, sold and conveyed said land to the Virginia Lead Mining Company as a corporation, and received the consideration therefor, and Maupin's conveyance to the Virginia Lead Mining Company being duly filed for record in the office of the recorder of deeds of the proper county, as against Maupin and all persons claiming said lands in privity with him by rights derived after the filing for record of Maupin's deed, the Virginia Lead Mining Company must be held to have been a corporation de facto at the time Maupin made his conveyance to it. See authorities cited under point 2. (4) When Maupin sold and conveyed the land to the Virginia Lead Mining Company, the appellants were strangers to the transaction and owned no interest in the land, and hence had no right to call in question the legality of the corporation or its right to take and hold the title to the land. Bank v. Matthews, 98 U.S. 621, 628. Having no connection with that transaction now, except such as is derived to them under a sale on execution against Maupin, on a judgment rendered long after Maupin's conveyance to the Virginia Lead Mining Company was duly filed for record, they have no standing in court except as privies of Maupin, and are estopped with Maupin. Such an estoppel makes part of the title to land and extends to all who claim under either of the parties. Bigelow on Estoppels [1 Ed.] pp. 73, 74. (6) Where parties attempt to organize a corporation under authority of a general law providing for the formation of corporations, and to that end execute and acknowledge articles setting forth their intention so that it may be clearly known therefrom by what right or claim they assume to act and having executed such articles proceed to form a corporate organization under the name provided for in the articles, elect officers and thenceforth do all their acts in the corporate name and by elected corporate officers, but without fully complying with the conditions of such statute, their exercise of corporate powers cannot be said to be authorized by the statute; but in the fullest sense of the words they may be said to be exercising corporate powers under color of right under such statute, especially when as in this case their good faith is evidenced by their prompt and full compliance with the omitted conditions, as soon as the fact that conditions are not complied with is discovered by them. Snyder v. Studebaker, 19 Ind. 462; Railroad v. Church, 137 U.S. 568.
This is a suit in equity to quiet the title to certain real estate of which plaintiffs claim they are the owners.
The material facts are undisputed. On the nineteenth day of December, 1872, Nathaniel Sands and Rowland R. Hazard, in the city of New York, executed and acknowledged in due form a certificate in writing for the purpose of incorporating under the laws of the state of Missouri a mining company, and adopted as the corporate name, "The Virginia Lead Mining Company." This certificate of incorporation shows a full compliance with the laws of this state up to and including its proper acknowledgment. Instead of having the certificate recorded, by the recorder of deeds of the county as required by section 2, article 7,...
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