Beal v. Childress
Beal v. Childress
Opinion of the Court
The opinion of the court was delivered by
The plaintiff, while working for The Childress Mining Company, was injured. He sued for damages and recovered a judgment on which execution was issued and returned unsatisfied. This action
The appeal presents the question whether, the company having been organized in accordance with the laws of Arizona, the stock being taken and paid for, the officers having been elected and by-laws adopted and business transacted for a considerable time, the mere failure to comply with the Kansas corporation statute renders the defendants personally liable to the plaintiff for the amount of his judgment.
Most of the decisions cited by the plaintiff were controlled by statutes expressly providing for the result of such corporate failures and omissions. In Rowden v. Daniell, 151 Mo. App. 15, 132 S. W. 23, a former decision of the supreme court was followed, holding that under the Missouri statutes a foreign corporation has no legal existence in that state until it has complied with the requirements, and it was also held that individuals who attempt to organize a corporation in Missouri 'are held personally liable until the charter has been secured and the required fees paid into the-state treasury. In Bigelow v. Gregory et al., 73 Ill. 197, it was held that persons adopting articles of agreement to become a body corporate do not, without complying;
An examination of the statutes covering foreign corporations (Gen. Stat. 1909, §§1710-1726) shows that while making various requirements they do not in any instance make the failure to observe them work a forfeiture or result in the individual liability of the incorporators. Morawetz on Private Corporations, volume 2, second edition, section 665, after reviewing the decisions of various states says that the object of statutes like the one here involved is to protect parties dealing with these companies from imposition and to .secure convenient means to obtain jurisdiction in the local courts, but that it is not the primary purpose to render the contract and dealings of the corporation which has not complied with the statutes void and unenforceable, and hence when such result has not been previously declared it should not be judicially imposed.
Without considering the alleged estoppel of the plain
The judgment is therefore affirmed.
Reference
- Full Case Name
- P. K. Beal v. Frank Childress
- Cited By
- 5 cases
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- Syllabus
- SYLLABUS BY THE COURT. Arizona Corporation — Insolvency — Failure to Comply with Foreign Corporation Statute — Liability of Individual Incorporators. Certain residents of Kansas procured an Arizona charter for a mining company, providing that the principal place of business in Arizona should be at Phoenix, and the principal office outside of Arizona should be at Galena, Kan., and that the company could have such other offices as the board of directors should establish. The laws of Arizona were complied with and the incorporators proceeded to hold a meeting at Galena, all being present, and elected themselves directors, choosing one president and another secretary and treasurer, and adopting a full set of by-laws. The stock was all subscribed and paid for in full, and the company entered upon and conducted a mining business, and the plaintiff while in its employ was injured, for which injury he brought suit and recovered judgment. Finding that the company had become insolvent, and ascertaining that the requirements of the Kansas statutes touching foreign corporations had not been complied with in any respect, he brought this action to hold the incorporators individually liable. Held, that the failure to observe the Kansas requirements did not avoid the corporation or justify a holding that the incorporators were fraudulently using the charter as a shield from personal liability.