CHAPTER CLXXXIV. QUESTIONS RELATING TO CORPORATE EXISTENCE. ART. I. IN GENERAL. $$ 7641-7652. SECTION II. QUESTIONS OF PLEADING. 88 7658-7682. III. PROOF OF CORPORATE CHARACTER. §§ 7689-7713. ARTICLE I. IN GENERAL. SECTION plaintiff as a corporation estopped to deny that it is such. 7648. Extent and illustrations of this estoppel. 7649. Cases denying this principle. 7650. Assumed corporation contracting as such estopped to deny its own existence. 7651. This estoppel extends to officers, directors, and members. 7652. The question of corporate existence in criminal proceedings. § 7641. Preliminary.—The inconvenience of litigating, in an action between a corporation and a private person, the question whether it is a corporation de jure, and whether it may sue or be sued as such, is so great, that courts have resorted to various expedients to avoid the determination of this question in such a collateral way. They have been moved to these expedients by the further consideration that a determination of the question would be a determination of it for that particular case only, and not for the purposes of a case between other parties; and consequently, to that extent, its determination would be inconclusive. It is proposed to consider in this chapter, as briefly as may be, the expedients to which the courts have thus resorted.1 § 7642. Validity of Corporate Existence not Questioned Collaterally, but only by the State.-There is a principle of very extensive application in the law, both in civil and criminal cases, subject to many exceptions, already considered," to the general effect that where a corporation has an existence de facto, the rightfulness of its existence can only be ques tioned by the State, and cannot be questioned collaterally in a litigation between it and a private party.* 1 See, on the general subject, ante, § 495, et seq., and § 518, et seq.; and consult Index, title Estoppel. 'As to its application in criminal cases, see post, § 7652. 3 Ante, §§ 502, 511, 1854, 1855, 4355, 5652, and others. Finch v. Ullman, 105 Mo. 255; 8. c. 24 Am. St. Rep. 383; Snider's Sons' Co. v. Troy, 91 Ala. 224; s. c. 24 Am. St. Rep. 887; Re Congregational Church, 131 N. Y. 1; 8. c. 42 N. Y. St. Rep. 701; 30 N. E. Rep. 43; Grand River Bridge Co. v. Rollins, 13 Colo. 4; s. c. 2 Denv. Leg. News, 226; s. c. 21 Pac. Rep. 897; Duggan v. Colorado Mortg. &c. Co., 11 Colo. 113; 8.c. 17 Pac. Rep. 105; Walton v. Riley, 85 Ky. 413; s. c. 3 S. W. Rep. 605; People v. Ulster &c. R. Co., 34 N. Y. St. Rep. 983; 8. c. 12 N. Y. Supp. 303; Demarest v. Flack, 32 N. Y. St. Rep. 675; 8. c. 11 N. Y. Supp. 83; 8. c. affirmed, 128 N. Y. 205; Chase's Patent Elevator Co. v. Boston Tow Boat Co., 155 Mass. 211; 8. c. 9 L. R. A. 339; Greenbrier Lumber Co. v. Ward, 30 W. Va. 43; s. c. 3 S. E. Rep. 227; Denver &c. R. Co. v. Denver City R. Co., 2 Colo. 673; Cayuga County Nat. Bank v. Dunklin, 29 Mo. App. 442; Keith &c. Coal Co. v. Bingham, 97 Mo. 196; Haskell v. Worthington, 94 Mo. 560; First Baptist Church v. Branham, 90 Cal. 22; s. c. 27 Pac. Rep. 60; Searcy v. Yarnell, 47 Ark. 269; s. c. 1 S. W. Rep. 319; Union Gold Mining Co. v. Rocky Mountain Nat. Bank, 1 Colo. 531; East Norway &c. Church v. Froislie, 37 Minn. 447; 8. c. 35 N. W. Rep. 260; Re Short, 47 Kan. 250; s. c. 27 Pac. Rep. 1005; 20 Am. & Eng. Corp. Cas. 522, n. For the scope and illustrations of this rule, see Snider's Sons' Company v. Troy, 91 Ala. 224; s. c. 24 Am. St. Rep. 887; Re Congregational Church, 131 N. Y. 1; 8. c. 42 N. Y. St. Rep. 701; 30 N. E. Rep. 43; Demarest v. Flack, 32 N. Y. St. Rep. 675; 8. c. 11 N. Y. Supp. 83; 128 N. Y. 205; Lumber Co. v. Ward, 30 W. Va. 43; 8. c. 3 8. E. Rep. 227; Searcy v. Yarnell, 47 Ark. 269; 1 S. W. Rep. 319; Chase's Patent Elevator Co. v. Boston Tow Boat Co., 155 Mass. 211; 8. c. 9 L. R. A. 339; Cayuga County Nat. Bank v. Dunklin, 29 Mo. App. 442; Finch v. Ullman, 105 Mo. 255; 8. c. 24 Am. St. Rep. 383; Keith &c. Coal Co. v. Bingham, 97 Mo. 196; People v. Ulster &c. R. Co., 34 N. Y. St. Rep. 983; 8. c. 12 N. Y. Supp. 303, Welch v. Old Dominion Min. &c. R. Co., 31 N. Y. St. Rep. 916; 8. c. 10 N. Y. Supp. 174. That the same rule exists under statutes, such as the Cali fornia Code of Civil Procedure, see § 7643. Not Even in Case of a Fraudulent Organization. The principles discussed in this chapter would go for little, if private persons, in a litigation with a corporation, could, for the purposes of the litigation, overthrow its existence, by averring and proving that it had been organized in fraud of the governing statute. If it has been colorably organized, the question whether it has been fraudulently organized will undoubtedly be one which can only be litigated between the corporation and the State. Especially will a customer of the corporation, who has entered into an obligation in its favor, be estopped from setting up such a defense; and the estoppel will, for stronger reasons, work against the corporation to prevent it from pleading fraud in its own organization.1 § 7644. Suing a Corporation as Such Admits its Corporate Existence.- Where a plaintiff brings an action against a corporation the direct object of which is to operate upon it and for relief against it in its corporate character, he will be estopped, at any subsequent stage of the cause, from denying that the defendant is a corporation. Still less can a corporation be sued as such, and brought into court, and the action be maintained against it, on the ground that it is not a corporation; and other defendants sued jointly with it cannot be charged, in such an action, with having jointly, with such corporation, usurped the rights of a corporation, etc.,-because, by suing the corporation as such, its existence is admitted.a 7645. A General Appearance by a Corporation Admits Corporate Existence. The first of these expedients has been Hitt. Gen. Laws Cal., art. 751; Oro- Bakersfield &c. Asso. v. Chester, 55 1 Southern Bank v. Williams, 25 Ga. 534, 736. Compare Napier v. Poe, 12 Ga. 170; Mitchell v. Rome R. Co., 17 Ga. 574. Society v. Morris Canal &c. Co., 1 N. J. Eq. 157; 8. c. 21 Am. Dec. 41. found in the principle, which is obviously sound and sensible as a mere rule of technical pleading, that where an action is brought against a body, and the declaration, complaint, or petition, alleges that it is a corporation, if the body appears generally to the action for the purpose of contesting the merits, its appearance admits that it is a corporation. This is necessarily so; because, as it is the corporation, — that is, the artificial body alone,-which is summoned, it necessarily admits its identity when it responds to the summons. The rule, then, is that a corporation, by appearing in a suit which has been brought against it, admits its corporate existence, and estops itself from denying the same. So, if a foreign corporation, proceeded against by attachment, voluntarily appears and gives bond in its corporate name, it cannot afterwards deny its corporate existence." § 7646. Corporate Existence Admitted by Taking an Appeal. So, if a defendant is sued as a corporation, and makes no appearance until judgment is rendered against it, but appeals from such judgment to a higher court, its appearance for the purpose of taking an appeal, and its appeal, will have the effect of admitting its existence as a corporation, so that it will not be a good point in the appellate court that the plaintiff failed to prove the defendant's corporate existence.' So, an assumed corporation, against which a judgment has been rendered, becomes estopped to deny its existence, by executing a bond for the purpose of appealing from such judgment.' § 7647. Defendant Contracting with Plaintiff as a Corporation Estopped to Deny that It is Such. This rule of estop 1 Seaton v. Chicago &c. R. Co., 55 Mo. 416; United States Express Co. v. Bedbury, 34 Ill. 459; Oxford Iron Co. v. Spradley, 46 Ala. 98; Missouri River &c. R. Co. v. Shirley, 20 Kan. 660. Compare Stoddard v. Onondaga Ann. Conf., 12 Barb. (N. Y.) 573; ante, § 7552, et seq. Hudson v. St. Louis &c. R. Co., 53 Mo. 525; Seaton v. Chicago &c. R. Co., 55 Mo. 416; Smith v. Burlington &c. R. Co., 55 Mo. 526. Kansas City &c. R. Co. v. Bolson, 36 Kan. 534; 8. c. 14 Pac. Rep. 5; 2 Rail. & Corp. L. J. 83. East Tennessee &c. R. Co. v. Evans, 6 Heisk. (Tenn.) 607. pel also applies where an alleged corporation sues as plaintiff upon a promissory note, or other written obligation which has been made to it by the defendant or by his assignor in its corporate name. In such a case the defendant, by entering into the contract with the plaintiff in its assumed character of a corporation, is held to have effectually estopped himself from denying that it is a corporation, when it sues in that character to enforce the contract.1 § 7648. Extent and Illustrations of This Estoppel. — It has been held not necessary that the instrument sued on should formally recite that the plaintiff is a corporation; but it is sufficient, to bring it within this rule, that the instrument is made to a pledgee having an artificial name such as is usually conferred upon a corporation, -as, for instance, where it was a promissory note payable to the "Continental Insurance Company." The case is, of course, stronger where the contract sued on recites the fact of the incorporation of the plaintiff. So, where a person, by his deed, declares the grantee therein to be a corporation, receives from it the purchase price, binds himself and his heirs to defend the title of such corporation, its successors and assigns, and delivers possession of the premises, such grantor and his heirs are forever estopped from denying the corporate existence of the grantee, as against those who have acquired possession and title under that deed. 1 Brickley v. Edwards, 131 Ind. 3; 8. c. 30 N. E. Rep. 708; Perinev. Grand Lodge, 48 Minn. 82; s. c. 50 N. W. Rep. 1022; Snider v. Troy, 91 Ala. 224; 8. c. 24 Am. St. Rep. 887; 8 South. Rep. 658; Topping v. Bickford, 4 Allen (Mass.), 120; German Bank v. Stumpf, 6 Mo. App. 17; Ramsey v. Peoria &c. Ins. Co., 55 Ill. 311; East River Bank v. Rogers, 7 Bosw. (N. Y.) 493; Ragan v. McElroy, 98 Mo. 349; Automatic Phonograph Exhibition Co. v. North American Phonograph Co., 45 Fed. Rep. 1; Searcy v. Yarnell, 47 Ark. 269; s. c. 1 S. W. Rep. 319; Stout v. Zulick, 48 N. J. L. 599; s. c. 7 Atl. Rep. 362; Mullen v. Beech Grove Driving Park, 64 Ind. 202; Farmers' &c. Ins. Co. v. Needles, 52 Mo. 17; Vanneman v. Young, 52 N. J. L. 403; s. c. 20 Atl. Rep. 53; Bon Aqua Imp. Co. v. Standard Fire Ins. Co., 34 W. Va. 764; 8. c. 12 S. E. Rep. 771. 2 Topping v. Bickford, 4 Allen (Mass.), 120. ' German Bank v. Stumpf, 6 Mo. App. 17. Ragan v. McElroy, 98 Mo. 349. The same principle prevents persons |