Springfield Grocery Co. v. Devitt

• Decision Date: 30 May 1921
• Docket Number: 21387
• Citation: 126 Miss. 169,88 So. 497
• Court: Mississippi Supreme Court
• Parties: SPRINGFIELD GROCERY CO. v. DEVITT et al

88 So. 497

126 Miss. 169

SPRINGFIELD GROCERY CO. v. DEVITT et al

No. 21387

Supreme Court of Mississippi

May 30, 1921

March 1921

1 CORPORATIONS. Foreign corporations held entitled to do business in state both by comity and comity by statute.

Foreign corporations have the right to do business in this state both by the comity of nations and by section 914, Code of 1906 (section 4088, Hemingway's Code).

2 CORPORATIONS. Foreign corporation's failure to file copy of charter with Secretary of State does not affect status.

The failure of a foreign corporation doing business in this state to file a copy of its charter with the Secretary of State as required by section 935, Code of 1906 (section 4111 Hemingway's Code), does not withdraw from it the recognition of its status as a corporation.

HON. D. M. GRAHAM, Judge.

APPEAL from circuit court, Harrison county, HON. D. M. GRAHAM, Judge.

Action by the Springfield Grocery Company against T. K. Devitt and others. Judgment for defendants on sustaining demurrer to replication, and plaintiff appeals. Affirmed.

Affirmed.

Gex, Waller & Morse, for appellant.

It must remembered that business associates attempting to do business jointly other than as a corporation are a copartnership. The law knows no intermediate form of business organization between a copartnership and a corporation. It is said in 30 Cyc., page 397: "Sec. 7. Associations, defective corporations, and promoters. a. Associations. Business associates who have not attempted to become incorporated are partners, if they are the common proprietors of a business carried on by them for profit, for the law knows no intermediate form of business organization between a corporation and a partnership.

Unquestionably that proposition cannot be controverted. Therefore if the Devitt-Clark Packing Company cannot be recognized in Mississippi as a corporation and was not a corporation authorized to do business in the state of Mississippi, then it was a copartnership and all the partners were liable to the appellant herein, in undertaking to transact business within the bounds of the state of Mississippi.

Now, let us see if the Devitt-Clark Packing Company had any corporate existence in the state of Mississippi, or whether its corporate existence in the state, could be recognized until it had complied with the laws of the state of Mississippi.

By section 411 of Hemingway's Annotated Code, it is provided that before a foreign corporation may do business within the state of Mississippi, it must file its charter and articles of incorporation, certified as provided by that section with the secretary of state, and upon complying with the other requisites of that section a certificate shall be granted it showing its compliance with the law, and thereafter it shall have a corporate existence within the state of Mississippi, and may do business therein. The statute then provides penalties for failure to comply therewith.

In Quartet & Music Company v. Haygood, 108 Miss. 755, this court held that a corporation which had failed to comply with the section hereinabove referred to had no corporate existence within the state of Mississippi and any contracts made by that corporation, were void and could not be enforced by suit in the courts of the state of Mississippi.

The Music Company case hereinabove referred to is in accordance with the policy of the state of Mississippi. It is the policy of the state of Mississippi that when a corporation fails to comply with the statutes providing for a report of its organization to be made, the members of the pretended corporation are all partners and as such becomes liable to those with whom they deal. (See Section 4105, Hemingway's Annotated Code.)

By section 4088, Hemingway's Code, it is provided that no foreign corporation undertaking to do business in the state of Mississippi shall have larger rights or be exempt from any penalties imposed on local corporations, nor shall such corporations undertake to do business contrary to the laws and public policy of the state of Mississippi.

If these statutes are read together, it would seem that it would be impossible for a foreign corporation who had failed to comply with the law giving it a right to do business within this state to have an existence or entity herein, and as hereinabove stated if it has no entity, and is not a corporation in Mississippi, then the owners thereof attempting to do business within the state must be copartners, if the law recognizes no intermediate form of business between a corporation and a co-partnership. In 14 Corpus Juris, page 200, it is said: "Sec. 208. 3. Individual rights and liabilities--Individual or partnership liability. If a single individual assumes to act as a corporation and to contract as such, where there is no corporation either de jure or de facto, he will be individually liable on the contract; and individual liability will also attach to all of the stockholders or members of a pretended but non-existing corporation on contracts entered into in its name if they have expressly or impliedly authorized the contract. So, if persons who are already doing business as partners attempt but fail to incorporate and continue doing business under the name of the pretended corporation they will continue to be liable as partners. In most jurisdictions, the rule is even broader and to the effect that, where two or more persons hold themselves out as a corporation, or permit an association of which they are incorporators, stockholders, or members to be so held out, when there is no corporation either de jure or de facto, they will be liable individually as partners, on contracts entered into either by themselves or by others as agents of the pretended corporation and in its name, unless there is a stipulation or an agreement to the contrary, or unless the person dealing with them is estopped to deny their corporate existence under rules hereinafter explained," etc. Taylor et al. v. Banham, 17 So. 552; Duke v. Taylor et al., 19 So. 173; Empire Mills Company v. Alston Grocery Company, 15 S.W. 200; Rowden v. Daniell, 132, S.W. 23; Tri-State Amusement Co. v. Amusement Co., 192 Mo. 404, 90 S.W. 1020, 4 L. R. A. (N. S.) 688, 111 Am. St. Rep., 511; See, also, to the same effect: Wechelberg v. Flour City National Bank, 64 F. 90, 12 C. C. A. 56; Winfield v. Truitt, 71 Fla. 38, 70 S. 775, L. R. A. 470; Ward Truitt Co. v. Bryan and Lamb, 144 Ga. 769, 87 S.E. 1037; Roberts Mfg. Co. v. Schlick, 63 Minn. 332, 64 N.W. 826; Johnson v. Corser, 34 Minn. 355, 25 N.W. 799; Ellis v. Brand, 176 Mo.App. 383, 158 S.W. 705; Mediall v. Collier, 16 Oh. St. 599; Lawler v. Murphy, 58 Conn. 294, 20 A. 457, 9 L. R. A. 113; Pettis v. Atkins, 60 Ill. 454; Coleman v. Coleman, 78 Ind. 344; Kaiser v. Lawrence Sav. Bank, 56 Iowa 104, 8 N.W. 772, 41 A. M. S. R. 85; Hospes v. Northwestern Mfg. Co., 48 Minn. 174, 50 N.W. 117, 31 A. M. S. R. 637, 15 L. R. A. 470; Abbott v. Omaha Smelting, etc., Co., 4 Nebr. 416; Hill v. Beach, 12 N.J.Eq. 31; Fuller v. Rowe, 57 N.Y. 23; Grady v. Robinson, 28 Ala. 289; Huggins v. Huggins, 117 Ga. 151, 43 S.E. 759; Carico v. Moore, 4 Ind.App. 20, 29 N.E. 928; Adams Express Co. v. Schofield, 111 Ky. 832, 64, S.W. 903, 23 Ky. L. Rep. 1120; Sebastian v. Booneville Academy Co., 56 S.W. 810, 22 Ky. L. Rep. 186; Ricker v. American L. & T. Co., 140 Mass. 346, 5 N.E. 284; Hoadley v. Essex County Comrs, 105 Mass. 519; Beecher v. Bush, 45 Mich. 188, 7 N.W. 785, 40 Am. Rep. 565; Wilson v. Owen, 30 Mich. 474; Boisgerard v. Wall, Sm. & M. Ch. 404; Farnum v. Patch, 60 N.Y. 294, 49 Am. Rep. 313; Atkins v. Hunt, 14 N.H. 205; Wells v. Gates, 18 Barb. 554; Skinner v. Dayton, 19 Johns 513, 10 Am. Dec. 286; McFadden v. Leeka, 48 Ohio St. 513, 28 N.E. 874; Babb v. Reed, 5 Rawle, 151, 28 Am. Dec. 650; Carter v. McClure, 98 Tenn. 109, 38 S.W. 585, 60 Am. St. Rep. 842, 36 L. R. A. 282.

From the foregoing it will be seen that the appellee never having complied with the laws of the state of Mississippi authorizing them to operate as a corporation, are acting as a co-partnership even though it may be granted that they undertook to act as a corporation and undertook to function in Mississippi under their Louisiana Charter, having failed to comply with the Mississippi law, they could never be recognized as a corporation; therefore they were a co-partnership and were liable as such. Under the law and facts we submit that the case should be reversed and remanded.

J. L. Taylor, for appellee.

Appellant in the brief of counsel admits that there does exist in the state of Louisiana a corporation styled the Dewitt-Clark Packing Company, but alleges that it has no entity in Mississippi. Counsel quotes section 935, Code 1906, Hemingway's Code, section 4111, but a careful reading of that section certainly does not warrant the construction placed on it by eminent counsel.

It will be noted that this section 935 was amended in 1916, ch. 92 and as it reads in the Hemingway's Code, section 4111, that every foreign corporation shall file a copy of the charter but the only penalty provided in the law is that for failure to file the copy, the corporation shall be fined not less than one hundred dollars. That is the only penalty provided at all and I ask a careful reading of that section to see if that isn't very true. It doesn't say that they shall not do business in the state but that if they do business in the state and do not file the copy of the charter they are liable to a fine of not less than one hundred dollars. Furthermore there is a difference between section 935, Code 1906, and section 4111, Hemingway in the last sentence of the section. You will observe that in the section 4111, Hemingway's, the last sentence reads: "This section shall not...