So, a person dealing with a de facto corporation as such, and becoming its creditor, will not be allowed to set up the invalidity of its organization, for the purpose of going beyond the artificial body and charging its stockholders as partners, in the absence of fraud;' though if there is really no corporation which can be charged, the promoters or other co-adventurers, who procured the credit in its pretended behalf, may be liable on the principle of breach of warranty of agency, already considered. The estoppel under consideration, like other estoppels, extends to the privies of the contracting parties; so that if a note is given to an assumed corporation, in its corporate name, and the corporation indorses the note to another in good faith, the maker will not be permitted to set up the nonexistence of the corporation, when sued upon the note by the indorsees.❜ § 7649. Cases Denying This Principle. Cases are not wanting denying or limiting the exercise of this principle. Thus, it has been held in Texas, where there is a statute absolutely prohibiting the doing of business in that State by mercantile corporations, that where an assumed mercantile corporation has never been formally organized as such, a or municipal corporations, which subscribe for shares of the stock of a private corporation, from afterwards denying its corporate existence, whether sued by the private corporation to enforce the contract of subscription, or otherwise. Thus, where a town had so subscribed to the shares of a railroad company, and the company had been subsequently sold out under a mortgage, and the town brought an action to cancel the sale, it was held that, having dealt with the alleged company as ostensibly a corporation, it was estopped to deny its corporate character. Searcy v. Yarnell, 47 Ark. 269; 8. c. 1 S. W. Rep. 319. 1 Snider v. Troy, 91 Ala. 224; 8. c. 24 Am. St. Rep. 887; Merchants' &c. Bank v. Stone, 38 Mich. 779; Stout v. Zulick, 48 N. J. L. 599; 8. c. 7 Ati. Rep. 362. Ante, §§ 418, 419, 2939, 4650. 3 Brickley v. Edwards, 131 Ind. 8; s. c. 30 N. E. Rep. 708; Topping v. Bickford, 4 Allen (Mass.), 120. A promissory note was made payable "to the order of C. W. S., Treasurer of the I. M. B. Co."; it was held that the legal intendment was that the contract was made with the company, and not with the treasurer individually, and that the maker of the note in an action thereon was estopped from alleging the non-existence of the corporation at the time he made the contract. Vater v. Lewis, 36 Ind. 288; s. c. 10 Am. Rep. 29. creditor who deals with the body as such, is not thereby estopped from denying its corporate capacity, but may hold its members liable as partners.1 § 7650. Assumed Corporation Contracting as Such Estopped to Deny its Own Existence. The operation of this principle is also such that a party, individual or collective, which holds itself out as a corporation, acts as such in making a contract, and promises in a corporate name, may be sued on the contract, and charged in that name, and will not be heard to deny the corporate character which it has thus assumed." Empire Mills v. Alston Grocery Co. (Tex.), 15 S. W. Rep. 505; affirming s. c. 15 S. W. Rep. 200. The principle that a party can be estopped by his conduct from showing that a pretended corporation is not such de jure is denied in toto in Boyce v. Trustees, 46 Md. 359, 373. So, it has been held in Pennsylvania that, in an action of assumpsit by the creditors of an association, organized under a statute of that State, against the stockholders, the plaintiff proceeding under the personal liability clause of the statute, it is competent for the plaintiff to show, either that the certificate required by law in order to obtain the charter was essentially untrue, and consequently that the corporation was organized in fraud of the statute, or that a portion of the stock was not paid for in money, as required thereby. The court reasoned that the charter-so-called-understood to have been granted by a public offithe State, was conclusive evidence of its own validity, but that not cover any frauds perpetrated by the co-adventurers in procuring it; and that the creditors of the corporation might show the fraud in order to avoid the immunity with which a charter fairly obtained would clothe the stockholders and thereby cer of it did charge them as partners. Paterson v. Arnold, 45 Pa. St. 410. Ante, § 532; Scheufler v. Grand Lodge, 45 Minn. 256; s. c. 20 Ins. L. J. 241; 47 N. W. Rep. 799; Liter v. Ozokerite Min. Co., 7 Utah, 487; 8. c. 27 Pac. Rep. 690. Thus, in an action by a director against an assumed corporation to recover for his personal services, the corporation cannot give evidence to prove that it exists only in name, and that an investment company which is not made a party, is the organization for which defendant holds its franchises, and that plaintiff's claim as to such other company is unjust. Ten Eyck v. Pontiac &c. R. Co., 74 Mich. 226; 8. c. 16 Am. St. Rep. 633; 3 L. R. A. 378; 5 Rail. & Corp. L. J. 401; 41 N. W. Rep. 905. So, a corporation organized under a general law, which has assumed liabilities and held itself out to the community as a corporation, will not be permitted to defeat the claims of creditors, by showing the falsity of the certificate of organization filed by it under such law. Dooley v. Cheshire Glass Co., 15 Gray (Mass.), 494. Contra, Boyce v. Trustees, 46 Md. 359. Upon the same principle, it cannot show its own neglect to publish the certificate of organization, as required by the gov 87651. This Estoppel Extends to Officers, Directors, and Members. This estoppel operates in favor of persons who have given credit to the assumed corporation, or otherwise changed possession to their loss, upon the faith of its being what it purports to be, as against those who, by their active conduct, have held it out to the world as a corporation.1 It therefore estops promoters, directors, and stockholders, from denying the fact of the existence of the corporation, when proceeded against to charge them upon the assumption of its existence, and of their connection with it as such. We have already considered at length how this estoppel operates against stockholders, and against directors. It may be added that, in an action to recover from promoters the profits which they have made in buying property for one price and selling it to the corporation for a greater price, the defendants, by reason of their active participation in the formation of the corporation, are estopped from denying that it has been regularly organized. Yet, while it is a rule of law that persons who have assumed to make a contract, as agents of a corporation which has no existence, bind themselves personally, on the principle of breach of warranty of agency,— nevertheless, this doctrine, in the absence of fraud, has no application where the other contracting party is himself a member of the supposed erning statute; nor that, contrary to such statute, it assumed the name of a corporation already in being. Dooley v. Cheshire Glass Co., supra. 1 Pittsburg Min. Co. v. Spooner, 74 Wis. 307; 8. c. 17 Am. St. Rep. 149; 5 Rail. & Corp. L. J. 566; 42 N. W. Rep. 259. 2 Ante, §§ 528, 1853, 3383, et seq. • Ante, § 4354, et seq. Pittsburg Min. Co. v. Spooner, 74 Wis. 307; s. c. 17 Am. St. Rep. 149; 5 Rail. & Corp. L. J. 566. So, where, in an action in the name of an insurance company, suing as a corporation, upon a subscription executed to the company in liquidation of a subscription to its capital stock, it ap‐ or pretended corporation. The reason is that where several persons have agreed among themselves to be liable only as the members of a corporation are liable, each one of them is estopped by his own agreement from charging the others with a greater liability.' § 7652. Question of Corporate Existence in Criminal Proceedings.-In criminal proceedings against others than the corporation, it has been held that proof of the corporate existence may be demanded, as in actions by or against the corporation, where the subject-matter of the criminal charge relates to corporate property or rights. In some jurisdictions this requirement is not strictly followed. In Vermont, for example, it was said on one occasion: "It is every day's practice, to admit proof of the existence of corporations, without even the production of the charter; and this in criminal cases. In indictments for uttering counterfeit bank notes, parol proof of the existence of the corporation in fact, is uniformly admitted. Indeed, frequent as these indictments are, as well as convictions upon them, I do not recollect a single instance of the production of the bank charter in such a case, since I have been upon the bench." In Indiana it has been held, in a prosecution for a trespass upon the property of persons holding the same in a corporate capacity, that it did not concern the defendant to inquire whether such persons were legally Moulton, 35 Minn. 458; of a religious body held meetings, and elected the defendant their treasurer, and that he accepted the office, did not estop him from denying, in an action brought in the corporate name against him, that the plaintiffs were ever incorporated; for these things might have been done in a voluntary association. Fredenburg v. Lyon Lake M. E. Church, 37 Mich. 476. 1 Foster v. 8. c. 29 N. W. Rep. 155. Compare Buffalo &c. R. Co. v. Cary, 26 N. Y. 75; White v. Ross, 4 Abb. App. Dec. (N. Y.) 589; Aspinwall v. Sacchi, 57 N.Y.331; Eaton v. Aspinwall, 19 N.Y. 119; Sands v. Hill, 46 Barb. (N. Y.) 651; Chubb v. Upton, 95 U. S. 665. It has been reasoned that, to warrant the conclusion that a person is estopped from disputing the existence of a corporation, on the ground that he has co-operated in its organization (U. S.) 412. and assumed corporate action, the acts shown must be unmistakably corporate acts. Proof that members 2 United States v. Johns, 4 Dall. Searsburgh Turn. Co. v. Cutter, 6 Vt. 315, 323, per Phelps, J. organized as a corporation. "They own and are in possessio of the land described in the indictment," said Hawk, C. J "and owned and possessed the same, under their corporat name, long before and at the time of the commission of the trespass for which the appellant is prosecuted, and that is suf ficient for the purposes of this case."1 SECTION ARTICLE II. QUESTIONS OF PLEADING. 7658. When not necessary to allege corporate existence. 7659. Doctrine that it is necessary to allege corporate existence. 7660. Necessary when suing for rights which can only inhere in a corporation. 7661. What averments of corporate existence sufficient. 7662. Whether necessary to repeat averment of corporate existence in successive counts. 1 White v. State, 69 Ind. 273, 279. A statute of Missouri provides as follows: "If, on the trial or other proceeding in a criminal cause, the existence, constitution, or powers of any banking company or corporation, shall become material, or be in any way drawn in question, it shall not be necessary to produce a certified copy of the charter or act of incorporation, but the same may be proved by general reputation, or by the printed statute book of the State, government or country by which such corporation was created." Gen. Stat. Mo. 850, § 22; Rev. Stats. Mo. 1879, § 1915. It seems that this statute is to read as though a comma were placed after the words "banking company"; for in one case it was held, on an indictment for an embezzlement of the funds of an express company, that the incorporation of the company might be proved by parol. State v. Cheek, 63 Mo. 364. In the same State, in a SECTION 7663. Declaring against a corporation which has changed its name. 7664. Question of corporate existence must be raised by defendant. 7665. Plea to the merits admits corporate existence. 7666. How question of corporate existence raised in pleading. 7667. Statutory rule in New York requiring plea in abatement or in bar. prosecution for assault with intent to kill the marshal of a city of the fourth class, the defendant cannot, for the purpose of negativing the official character of the marshal, interpose the defense that the city was not legally incorporated. In such a case it is enough that the State recognizes its right to exist and to exercise the powers of a city of the fourth class. State v. Fuller, 96 Mo. 165. The same rule applies where the town or city is itself the plaintiff. It is therefore not competent for the defendant, in an action by a municipal corporation to recover a fine for a violation of one of its ordinances, to disprove the fact of its incorporation. Here again the question can only be raised by the State in a proceeding in the nature of quo warranto, or in some other direct proceeding. Fredericktown v. Fox, 84 Mo. 59. See also Catholic Church v. Tobbein, 82 Mo. 418. |