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A and B went through a ceremony which they believed to constitute them man and wife. But the person assuming to officiate had no power to marry and (under the laws of the state where the ceremony was performed) no legal marriage was effected. A sues C for alienating the affections of B, his wife. If C had alienated the affections of B, A may well, in some proper form, be given redress against him. But how can a man, who has not been married, maintain an action for alienating the affections of his wife?
A dies. B assumes, without right, to act as his executor. Creditors of A may take him at his assertion; debtors of A, paying him in good faith, may perhaps be protected; but B himself cannot maintain an action to enforce any right belonging to the estate.
We have already seen that a de facto public officer cannot maintain an action to enforce a right incident to the office, or avail himself of the protection of the office against liability for a tort. 10
Possibly a disseisor was allowed affirmatively to assert rights incident to the ownership of the land, but this is not clear. In any event, the conditions of society are now so different from those prevailing when the doctrine of disseisin was established and developed that, it is submitted, the reasons for doctrines remedial to disseisors have ceased to exist, except so far as they involve the policy of quieting titles after a lapse of time. Analogies from the old law of disseisin would be as unsafe as analogies from the old law of tortious conveyances. It may, moreover, be added that the doctrine of disseisin itself seems to have been established primarily for the benefit of the lord, and not for the benefit of the disseisor.
If A has made an expenditure in good faith, believing that he was thereby obtaining a legal right, and he did not obtain the right, it may well be that he is a proper object of sympathy. But is this sympathy to be carried to the extent of forcing B, himself quite innocent of any wrong-doing, to submit to an exercise of this right by A? What end of justice is thereby achieved? If A has a certain right, he is not responsible for damage done to E; if he does not have it, he is responsible. How can he be said to have acquired the right, when he has not performed the conditions precedent to its acquisition, but has merely performed most of these conditions, and acted upon the mistaken belief that he had performed all? Is he to be allowed to lift himself by his own boot-straps? It is fundamental that, while an equity may be swept away for the benefit of a person who has made an expenditure in good faith, a legal gap will not be bridged.
a right to avoid the indentures, but that the father could not take advantage of this right in the child. See note 12.
9 1 Williams, Executors, to ed., 695. 10 See notes 4 and 5.
If then (to return to the case put in the opening paragraph) A, B, and C are allowed to protect themselves from personal liability for the tort done to E, on the ground that, in appointing D as agent, they were exercising a right obtained from the state to act as an artificial person, this must rest upon some doctrine peculiar to the law of corporations.
Courts have frequently used the expression that the existence of a corporation cannot be attacked collaterally. Suppose the legislature grants a charter to the X corporation, and provides therein that in case a certain act is not done within a time specified the charter shall be void. The act is not done within the time specified, and thereafter X sues A. A seeks to defend on the ground that X, by its failure to do the act, ceased to be a corporation. But, although the word “void " was used, the courts would ordinarily construe this to mean voidable, at the election of the state.” 11 If such construction is adopted, it follows that, until the state has exercised its option to declare the charter void, X still lives. A does not represent the state, and cannot enforce the state's option. It is well settled, therefore, that no collateral attack can be made upon the existence of a corporation by reason of facts justifying the state in declaring the corporate life forfeited.12
11 Brown v. Wyandotte Co., 68 Ark. 134; Atchafalaya Bank v. Dawson, 13 La. 497 ; Matter of New York Co., 148 N. Y. 540. Cf. Brooklyn Co. v. Brooklyn, 78 N. Y. 524.
12 Harris v. Nesbit, 24 Ala. 398; Bloch v. O'Conner Co., 129 Ala. 528; Hammett v. Little Rock Co., 20 Ark. 204; Mississippi Co. v. Cross, 20 Ark. 443; West v. Carolina Co., 31 Ark. 476; Searcy v. Yarnell, 47 Ark. 269; Union Co. v. Rocky Mountain Bank, i Colo. 531 ; Spencer v. Champion, 9 Conn. 536, 543; Kellogg v. Union Co., 12 Conn. 7; Pearce v. Olney, 20 Conn. 544, 556; Pahquioque Bank v. Bank of Bethel, 36 Conn. 325; Young v. Harrison, 6 Ga. 130; Union Branch Co. v. East Tennessee Co., 14 Ga. 327; Atlanta v. Gate City Co., 71 Ga. 106; Wilmans v. Bank of Illinois, 6 Ill. 667; Thomas v. South Side Co., 218 Ill. 571; John v. Farmers' Bank, 2 Blackf. (Ind.) 367; Brookville Co. v. McCarty, 8 Ind. 392 ; Logan v. Vernon Co., 90 Ind. 552; Barren Creek Co. v. Beck, 99 Ind. 247 ; Carey v. Cincinnati Co., 5 Ia. 357 ; Bank of Galliopolis v. Trimble, 6 B. Mon. (Ky.) 599; Atchafalaya Bank v. Dawson, 13 La. 497 ; State v. Fagan, 22 La. Ann. 545; Penobscot Corporation v. Lamson, 16 Me. 224; Hamilton v. Annapolis Co., 1 Md. Ch. 107; University of Maryland v. Williams, 9 Gill
But this doctrine has, save by confusion, nothing to do with the doctrine of de facto corporations. It is concerned not with the manner in which corporate life may be gained, but with the manner in which corporate life may be lost. There is no defect whatever in the formation of the corporation; no one questions but
& J. (Md.) 365; Planters' Bank v. Bank of Alexandria, 10 Gill & J. (Md.) 346; Musgrave v. Morrison, 54 Md. 161; Charles River Bridge v. Warren Bridge, 7 Pick. (Mass.) 344, 371; Cahill v. Kalamazoo Co., 2 Doug. (Mich.) 124; Montgomery v. Merrill, 18 Mich. 338; Toledo Co. v. Johnson, 49 Mich. 148; Bohannon v. Binns, 31 Miss. 355; Bank of Missouri v. Merchants’ Bank, 10 Mo. 123; Bank of Missouri v. Snelling, 35 Mo. 190 ; State v. Carr, 5 N. H. 367, 370; Peirce v. Somersworth, 10 N. H. 369; Sewall's Falls Bridge v. Fisk, 23 N. H. 171; New Jersey Co. v. Long Branch Commissioners, 39 N. J. L. 28; Jersey City Co. v. Consumers Gas Co., 40 N. J. Eq. 427; Elizabethtown Co. v. Green, 46 N. J. Eq. 118; West Jersey Co. v. Camden Co., 52 N. J. Eq. 452, 464; Merrick v. Van Santvoord, 34 N. Y. 208, 222; Matter of N. Y. Elevated Co., 70 N. Y. 327 ; Matter of Kings County Elevated Co., 105 N. Y. 97; Matter of Cutchogue, 131 N. Y. I (see also 46 Barb. (N. Y.) 361 ; 6 Cow. (N. Y.) 23; 5 Duer (N. Y.) 676; 7 How. Pr. (N. Y.) 476; 4 N. Y. Supp. 177 ; 3 Sandf. Ch. (N. Y.) 625, 652; 23 Wend. (N. Y.) 254. Cf. 19 Johns. (N. Y.) 456; Webb v. Moler, 8 Oh. 548; Irvine v. Lumbermen's Bank, 2 Watts & S. (Pa.) 190; Coil v. Pittsburgh College, 40 Pa. St. 439; Twelfth-St. Co. v. Philadelphia Co., 142 Pa. St. 580, 593 ; Hinchman 2'. Philadelphia Road, 160 Pa. St. 150; Gas Co. v. Downingtown, 193 Pa. St. 255; Olyphant Co. v. Olyphant, 196 Pa. St. 553; Windsor Co. v. Carnegie Co., 204 Pa. St. 459; LaGrange Co. v. Rainey, 7.Cold. (Tenn.) 420; Anderson v. Railroad, 91 Tenn. 44; Connecticut Co. v. Bailey, 24 Vt. 465; Crump v. U. S. Co., 7 Grat. (Va.) 352; Moore v. Schoppert, 22 W. Va. 282; Lumber Co. v. Ward, 30 W. Va. 43; Mackall v. Chesapeake Co., 94 U. S. 308; Van Wyck v. Knevals, 106 U. S. 360 (see also 28 Fed. Cas. 1153; 5 Sawy. (U. S.) 44); Robinson v. London Hospital, 10 Hare 19.
A private individual cannot institute quo warranto proceedings to have the charter of a corporation declared forfeited. North v. State, 107 Ind. 356; Commonwealth v. Union Co., 5 Mass. 230; Attorney General v. Adonai Corporation, 167 Mass. 424; State v. Paterson Co., 21 N. J. L. 9; Commonwealth v. Farmers' Bank, 2 Grant (Pa.) 392; Western Pa. Company's Appeal, 104 Pa. St. 399.
If the legislature is induced by fraud to pass a special act of incorporation, the corporation comes into being, and the fraud is only a cause of forfeiture by the state. Charles River Bridge v. Warren Bridge, 7 Pick. (Mass.) 344, 370. Similarly, if the legislature has by a special or general law authorized a designated official or body to issue a charter or a certificate (which is made conclusive evidence of incorporation) upon the performance of conditions precedent, and the official or body is induced by fraud to issue such charter or certificate. Rice v. Bank of Commonwealth, 126 Mass. 300 (by Mass. L. 1903, c. 437, § 12, the certificate of the Secretary of State "shall have the force and effect of a special charter '); Nat'l Bank v. Rockefeller, 195 Mo. 15, 42 (whether this was a sound construction of the statute in question, quære); Centre Co. v. McConaby, 16 Serg. & R. (Pa.) 140, 1 Pen. & W. (Pa.) 426, 431 ; Travaglini v. Societa Italiane, 5 Pa. Dist. 441; German Insurance Co. v. Strahl, 13 Phila. 512. See also Pattison v. Albany Ass'n, 63 Ga. 373; U. S. Vinegar Co. v. Schlegel, 143 N. Y. 537 ; Wells Co. v. Gastonia Co., 198 U. S. 177, 185; Pilbrow v. Pilbrow's Co., 5 C. B. 440, 471, 472 (commenting on § 18 of the Companies Act of 1862). Similarly, if the designated official or body is induced by fraud to do an act the performance of which is one of the conditions precedent to incorporation. Duke 7.
that it came into existence; the only question is whether it still continues in existence. The use of this doctrine to support the contention that, if certain persons assume to have the right to act as a corporation, all but the state must submit quietly to their exercise of such usurped right, arises, it is not too much to say, from a profound misconception.
Have I exposed myself to the retort courteous? Perhaps the misconception is in supposing that any one does, deliberately,
Cahawba Co., 16 Ala. 372; Litchfield Bank v. Church, 29 Conn. 137, 148; Jones v. Rana, 24 Barb. (N. Y.) 395; Tar River Co. v. Neal, 3 Hawks (N. C.) 520.
Wherever "he legislature has authorized the formation of a corporation upon the performance of certain conditions precedent, the courts must necessarily determine whether the legislature intended to require a certain mental state in the corporators as one of these conditions. Considering the difficulty of proof on such a point, the courts may well incline against such a construction of the law. Thus if the legislature has authorized persons to form a corporation by filing a certain certificate, and the certificate filed contains the required matter and the statements therein are true, a corporation is formed, even though the corporators secretly intend to make an unlaw
he corporation so formed. See Importing Co. v. Locke, 50 Ala. 332, 334; Niemeyer v. Little Rock Ry., 43 Ark. 111, 120; Aurora Co. v. Lawrenceburgh, 56 Ind. 80, 87; Lincoln Ass'n v. Graham, 7 Neb. 173; Attorney General v. Stevens, Saxt. Ch. (N. J.) 369, 378; National Docks Co. v. Central Railroad, 32 N. J. Eq. 755, 759; Attorney General v. American Tobacco Co., 55 N. J. Eq. 352, 369; aff. 56 N. J. Eq. 847 ; Buffalo Co. v. Hatch, 20 N. Y. 157, 159; Windsor Co. v. Carnegie Co., 204 Pa. St. 459, and cases cited. See also Terhune v. Midland Co., 38 N. J. Eq. 423; Wellington Co. v. Cashie Co., 114 N. C. 690; Cochran v. Arnold, 58 Pa. St. 399, 405. Cf. cases cited below. On the formation of a corporation and transfer of property thereto with intent to give the federal courts jurisdiction, see Irvine Co. v. Bond, 74 Fed. Rep. 849.
Although fraud in procuring a charter is only a cause of forfeiture, fraud by the associates may prevent incorporation. Thus (to put a plain case) where the legislature requires, as a condition precedent, that a certain subscription be made "in good faith.” Whether, when fraud prevents incorporation, collateral attack will be permitted upon the existence of the alleged corporation is not a question within the law of de facto corporations (see third paragraph of note 13). But there is no sweeping rule that such attack may never be made. Christian Co. v. Fruitdale Co., 121 Ala. 340; Carey v. Cincinnati Co., 5 la. 357 ; Montgomery v. Forbes, 148 Mass. 249; Cleaton v. Emery, 49 Mo. App. 345; Davidson v. Hobson, 59 Mo. App. 130; Farnham v. Benedict, 107 N. Y. 159, 169; Booth v. Wonderly, 36 N. J. L. 250 ; Hill v. Beach, 12 N. J. Eq. 31; Jersey City Co. v. Dwight, 29 N. J. Eq. 242 (the learned vice-chancellor who decided this case assumed, 46 N. J. Eq. 116, that it could not stand with National Docks Co. v. Central Co., 32 N. J. Eq. 755. But see 49 N. J. Eq. 329, 335); Elizabethtown Co. v. Green, 49 N. J. Eq. 329 (by the five dissenting judges. Whether the majority was opposed on this point does not appear. The decision is explained in 52 N. J. Eq. III, 144, on a ground consistent with this opinion by the dissenting judges); Brundred v. Rice, 49 Oh. St. 640; Chicora Co. v. Crews, 6 S. C. 243, 275; McGrew v. City Produce Exchange, 85 Tenn. 572; Le Warne v. Meyer, 38 Fed. Rep. 191. See also Salomon v. Broderip,  A. C. 22, 43. Cf. Laflin Co. v. Sinsheimer, 46 Md. 315; Gow v. Collin Co., 109 Mich. 45; Cochran v. Arnold, 58 Pa. St. 399, 405.
contend that the existence of an alleged corporation can never be attacked collaterally. Assume the contention to be that the existence of an alleged corporation cannot be attacked collaterally, if the assumption of the right to be a corporation is made under peculiarly extenuating circumstances. Assume further that these extenuating circumstances are: (1) that an attempt to incorporate has been made resulting in a colorable corporate organization; (2) that there was a law authorizing the formation of such a corporation as was attempted; (3) that there has been user of some of the powers which such a corporation would possess; and (4) that the persons seeking to prevent collateral attack acted in good faith.13 Under such circumstances, why should not the courts
13 If the state grants to certain persons the privilege of acting as an artificial per. son, they are a corporation de jure. Whenever persons assume to act as an artificial person, without the authority of the state, it might properly be said that they are a corporation de facto. Sheer usurpation of the corporate privilege is a fact, no less than usurpation under extenuating circumstances. If this broad conception of a de facto corporation had been taken, then the subject of de facto corporations would have covered the whole subject of the usurpation of corporate power.
But it is clear that it has not been taken. Thus, persons who have been granted the privilege to act as an artificial person for some purposes may assume so to act for other purposes. When they leap the bounds of the privilege granted them, their act is a usurpation of corporate power. But the law of ultra vires transactions is not treated by the courts as a branch of the law of de facto corporations.
Similarly, even where the associates have not been granted the corporate privilege for any purpose, the courts have, in analogy to the law of de facto officers, and by a usage now altogether too well established to be profitably questioned, confined the conception of a de facto corporation within the bounds stated in the text. If associates usurp the corporate privilege when there is no law authorizing such a corporation as they assert themselves to be, collateral attack may or may not be allowed on the existence of the alleged corporation, but the law of de facto corporations does not control. Similarly, where the associates have not even a colorable organization, or where persons who have not acted in good faith seek to prevent the collateral attack. These cases form a branch of the law on the usurpation of corporate power, but not of the law on de facto corporations. This article deals only with de facto corporations in the narrow sense established by usage, - usurpation of corporate power under the peculiarly extenuating circumstances stated in the text. To speak of these circumstances in detail.
1. The attempt to incorporate must have gone so far as to result in a colorable corporate organization. McLennan v. Hopkins, 2 Kan. App. 260; Johnson v. Corser, 34 Minn. 355 (see 52 Minn. 243); Abbott v. Omaha Co., 4 Neb. 416; McLeary v. Dawson, 87 Tex. 524, 538 (" a self-constituted body which was not even a de facto corporation "); Bergeron v. Hobbs, 96 Wis. 641. But cf. the language of the court in Methodist Church v. Pickett, 19 N. Y. 482, 485.
2. There must have been a law authorizing the formation of such a corporation as was attempted. Duke v. Taylor, 37 Fla. 64 ; American Co. v. Minnesota Co., 157 III. 641; Snyder v. Studebaker, 19 Ind. 462 ; Eaton v. Walker, 76 Mich. 579; Bradley v. Reppell, 133 Mo. 545 ; St. Louis Ass'n v. Hennessy, u Mo. App. 555; Evenson v. Elling.