Blanchard v. Kaull
Blanchard v. Kaull
Opinion of the Court
The two appeals will be considered together, as the first is taken from the judgment and the second from the order denying the defendant’s motion for a new trial, in the same action. The action was brought upon four promissory notes, all of which are in the same form, and were executed in the same manner, but differ only in the amounts and the payees. One of the notes is as follows:
“13,590 50.]
“ Twelve months after date, we, as Trustees of the Amador and Nevada Wagon Road Company, promise to pay to Louis Nikolaus, or order, the sum of three thousand five hundred and ninety dollars and fifty cents, in gold coin of the United States of America, with interest thereon at the rate of two per cent per month from date until paid, the interest to be paid at the expiration of every two months. And if said interest is not paid at the expiration of every two months, the interest then due shall be added to the principal and draw interest at the rate of two per cent per*449 month until paid. For (value) received, this 3d day of December, A. D. 1863.
(Signed) “JOHN M. KAULL,
“LOUIS NIKOLAUS, “J. TULLOCK,
“ Trustees of the Amador and Nevada Wagon Road Co.”
The Court gave judgment against Kaull, Nikolaus, and Tullock, as the makers of the notes.
It is alleged in the complaint, that the defendants were partners, under the name and style of the Amador and Nevada Wagon Road Company, and as such were interested in the construction of a certain wagon road; and that they, as partners under said name and style, “ and by their duly authorized trustees and agents, John M. Kaull, Louis Nikolaus, and J. Tullock, three of said partners, defendants, and who were duly authorized to act for and in the name of said company,” made and delivered the promissory notes to the respective payees. The defendants denied that they were partners, and alleged that the Amador and Nevada Wagon Road Company was a corporation, duly organized under the laws of this State, etc., and that the notes were made and delivered as the notes of the corporation. The plaintiffs failed to prove that the defendants were partners; and the defendants, whose names are signed to the notes, failed to prove that they were authorized by the Amador and Nevada Wagon Road Company to make the notes. The Court, as has been remarked, found that Kaull, Nikolaus, and Tullock made and delivered the notes in their individual capacity; and on that finding the principal question in the case arises.
The notes do not on their face purport to be their notes. In the body of the notes, the makers are described as the Trustees of the Amador and Nevada Wagon Road Company, and to the signatures there is appended the same designa
As the notes do not purport to be the notes of Kaull, Eikolaus, and Tulloek, as they do not personally promise to pay the sums therein mentioned, Hall v. Crandall, 29 Cal. 567, and Lander v. Castro, 43 Cal. 497, are express authority that those defendants are not personally liable in a suit on the notes.
One of the plaintiff’s propositions is that the defendants were not a corporation, but a joint stock company or a partnership. The question whether the corporation was duly organized, or was claiming in good faith to be a corporation, and was doing business as such, need not be inquired into, for if it be admitted that it was duly organized, no authority from the corporation to its Trustees to execute promissory notes is shown. It was not proven that the defendants con
A further position is, that as the notes were made before the final organization of the corporation, the defendants are personally liable on the notes, by virtue of the sixth section of the Act for the formation of plank and turnpike road companies. The Act denominates companies which may be formed under its provisions “joint stock companies,” but the powers, rights, and liability of those companies, as pro • vided for in the Act, show that they are, in truth, corporations. The section above referred to is as follows: “Until the final organization of the company, as hereinafter provided, the members thereof shall be jointly and severally liable for all debts contracted prior to such final organization.” The complaint is not framed on the theory of that section. It is not alleged that the defendants commenced the formation of a company under that Act, and that before the final organization thereof, debts were contracted which still remain unpaid:, etc. And had the plaintiffs proceeded under that section, and shown that they were entitled to a recovery, they could not have recovered on the notes as the contracts of the members, for the provision is not that the members shall be liable on the contracts entered into by the agents of the company, but that they shall be liable for the debts contracted prior to the final organization of the company. if or is the complaint sufficient to entitle the plaintiffs to a recovery against the Trustees, under the provisions of the nineteenth section, as it does not contain the necessary allegations to show that they became individually liable.
The record does not clearly show whether the Court below held the Trustees personally responsible on the notes, by reason of the provisions of either of those, sections of the statute, or because of their having acted, as is alleged in the complaint, on behalf of a partnership of which they were
The proposition that the Trustees are individually liable on the notes, because they had not competent authority to make and deliver them as the notes of the Amador and Nevada Wagon Road Company, cannot be sustained without overthrowing Hall v. Crandall and Lander v. Castro, supra.
The other positions of the plaintiffs need not be noticed, as they depend on those which have already been discussed.
J udgment and order reversed, and cause remanded for a new trial.
Reference
- Full Case Name
- GEORGE G. BLANCHARD and CHARLES F. IRWIN v. JOHN M. KAULL, LOUIS NIKOLAUS, JAMES TULLOCK, and Thirty Others
- Cited By
- 18 cases
- Status
- Published
- Syllabus
- Promissory Note Given by Trustees oe a Gome any.—A promissory note'signed by three persons, in the body of which they, as Trustees of a company, promise to pay to another a sum of money, and which has the same designation of “ Trustees,” etc., appended to their signatures, does not on its face purport to be the note of the persons signing it, and they are not personally liable in a suit on it. Idem.—A partnership or a joint stock company is not necessarily the result of an abortive attempt to organize a corporation. Plank and Turnpike Road Companies are Corporations.—Although the Act for the formation of plank and turnpike road companies denominates companies which may be formed under its provisions “joint stock companies,” still the powers, rights, and liabilities of these companies, as provided for in the Act, show that they are corporations. Debts Contracted by Members oe Plank Road Company.—In an action to recover from the members of a plank or turnpike road company debts contracted before its final organization, the complaint must allege that the defendants commenced the formation of such company, and that before the final organization thereof debts were contracted which still remain unpaid, etc. Idem.—In such action no recovery can be had on promissory notes, signed by Trustees of the company, as the contracts of members of the company, for the Act does not make members liable for debts contracted by the agents of the company, but for debts contracted before the organization of the company. Complaint on Liability oe Directors oe Plank Road Company.— To make the Directors of a plank or turnpike road company personally liable for debts contracted in violation of its by-laws, and after the same have been filed, the complaint must contain allegations that they were thus contracted. Liability of Trustees on Corporation Notes.—The Trustees of a corporation who make and sign notes, as such Trustees, with the intention, of not binding themselves personally, are not personally liable, even if they had no authority from the corporation to make the notes. Idem.—If persons, as Trustees of a corporation, execute promissory notes with the intention of binding the corporation, they are not personally liable on the notes, even if there is no such corporation.