Opinion
Opinion filed October 3, 1939.
1. Copartnership as Separate Entity — 2. Questions Reached by Exception to Judgment — 3. Propriety of Joining Partnership as Coplaintiff Raised by Such Exception — 4. As a Jurisdictional Question — 5. Dismissal for Lack of Jurisdiction — 6. P.L. 1629 Inapplicable to Such Joinder — 7. Taking Jurisdiction of Separate Claims in Same Action — 8. Suits by Promisees with Several Interests — 9. Court Held Without Jurisdiction to Permit Joinder of Partnership — 10. Judgment for Partnership of No Effect — 11. No Consideration by Supreme Court Where Jurisdiction Lacking — 12. Misjoinder As Precluding Consideration of Claim on Merits — 13. Action Not Abated by Misjoinder under P.L. 1581 — 14. Nonexistent Corporation as Party to Contract — 15. No Agency for Nonexistent Corporation — 16. Ratification by Corporation of Contract Made Prior to Its Organization — 17. Ratification Inferred from Acceptance of Benefits — 18. Finding That Witness Testified to Fact Construed — 19. Omission of Essential Fact from Findings — 20. Burden of Proof as to Receipt of Merchandise by Corporation — 21. Finding That It Did Not Affirmatively Appear Construed — 22. Affirmative Proof Defined — 23. Finding as to Purchase and Delivery of Merchandise — 24. Finding as to Extension of Credit — 25. Judgment for Plaintiff Held Not Justified by Findings.
1. A copartnership is an entity separate and apart from the individuals composing it.
2. An exception to a judgment reaches every question involved in its rendition and necessary to its validity.
3. An exception to a judgment in favor of a copartnership was sufficient to raise the issue as to whether the copartnership was properly allowed, on plaintiff's motion to the granting of which no exception was taken, to be joined as a coplaintiff in an action of contract where the findings showed that the copartnership claim was based upon a contract separate and distinct from the contract upon which recovery was sought by the original plaintiff, who was one of the members of the copartnership.
4. A question as to the propriety of permitting a copartnership to be joined in an action of contract as coplaintiff, to seek recovery on a contract separate and distinct from the contract on which the claim of the original plaintiff was based, touched the jurisdiction of the trial court and so could be raised for the first time in Supreme Court.
5. The Supreme Court will dismiss a case at any stage, whether moved by a party or not, when a lack of jurisdiction is discovered.
6. P.L. 1629, providing for the joining as coplaintiff or codefendant, in an action founded on contract, of another person who is a party to such contract and ought to have been joined, did not apply to permit the joining as coplaintiff, in an action on the common counts to recover for merchandise sold and delivered, of a copartnership consisting of the original plaintiff and another when one item in the specifications was claimed to be owed to the copartnership, since the original plaintiff and the copartnership were not parties to the same contract and hence not interested in the identical claim.
7. By the common law, which, in the absence of statutory modification, is controlling, courts cannot take jurisdiction of distinct and separate claims against different persons in the same action.
8. Two or more promisees, whose interests are several, must sue separately for damages.
9. A trial court was without jurisdiction to admit, on motion of the original plaintiff, a copartnership consisting of the original plaintiff and another as a new coplaintiff in an action on the common counts for merchandise sold and delivered where one item of the specifications was claimed to be owed to the copartnership.
10. Where a trial court had exceeded its jurisdiction in admitting a copartnership as a coplaintiff in an action of contract, the case stood though as the copartnership had never appeared therein, and a judgment in its favor was of no effect.
11. The Supreme Court cannot consider a matter over which it has no jurisdiction.
12. The merits of a claim were not for consideration in Supreme Court where the copartnership seeking to recover thereon had been improperly admitted as a coplaintiff in an action of contract.
13. Under the provisions of P.L. 1581 the action brought by an original plaintiff was not abated by the misjoinder on his motion of a copartnership consisting of himself and another, and therefore the judgment of the trial court in his favor was for review upon the record.
14. A corporation which was not in being at the time a contract of sale was made was not, and could not have been, a party to the contract.
15. A person was not, and could not have been, in the making of a contract of sale, the agent of a corporation not then in being.
16. A corporation would become liable on a contract of sale made in its behalf prior to its organization if thereafter it expressly or impliedly assumed the obligation by the adoption or ratification of the contract.
17. Where a corporation, after organization, accepts the benefit of a contract made in good faith by its promoter in its behalf previous to its organization, and the contract is one which would have been within its corporate powers to make, the inference is justified that it has adopted or ratified such contract.
18. A statement in findings that a witness testified that a certain event occurred is not equivalent to a finding that this was the fact, but is only a finding that the witness so testified.
19. While the Supreme Court must indulge all reasonable intendments in favor of a judgment and read doubtful findings so as to support it, if it reasonably can do so, it cannot supply the omission of an essential fact not fairly inferable as resulting from the facts as found.
20. The burden was upon the plaintiff in an action to recover for merchandise sold and delivered to prove the essential elements of his claim, among them that the defendant corporation, which was not in existence at the time the contract of sale was made in its behalf, received and accepted the merchandise specified therein.
21. A finding that it did not affirmatively appear that a certain event occurred amounts to a failure to find the fact, and does not mean that the fact was shown by circumstantial rather than by direct evidence.
22. By affirmative proof is meant such evidence of the truth of the matters asserted as tends to establish them and this regardless of the character of the evidence offered.
23. A finding in an action of contract to recover for merchandise sold and delivered to a corporation that the merchandise was purchased by and delivered to the person who was about to organize the defendant corporation, added nothing to the defendant's liability, since the corporation, being nonexistent at the time, could not be bound by any theory of agency in the absence of a subsequent adoption or ratification.
24. A finding in an action of contract to recover for merchandise sold and delivered that the plaintiff extended credit to the defendant corporation, which had not then been organized, added nothing to the defendant's liability because this extension of credit to an anticipated, but as yet unborn, debtor was, standing alone, of no avail.
25. A judgment in favor of the plaintiff in an action of contract to recover for merchandise sold and delivered was not justified upon the facts found where the contract was negotiated by a person about to organize the defendant as a corporation and the merchandise was delivered to him for the corporation prior to its organization, but there was no finding that the contract had ever been ratified or adopted by the defendant or that the merchandise ever came into its possession.
ACTION OF CONTRACT in the common counts. Plea, the general issue. On motion of the plaintiff the Style Shoppe, a copartnership consisting of the plaintiff and another, was joined as a coplaintiff. Trial by court in Franklin municipal court, P.L. Shangraw, Municipal Judge. Judgments for both plaintiffs. The defendant excepted. The opinion states the case. Judgment for the Style Shoppe reversed and action dismissed so far as this plaintiff is concerned; judgment for the original plaintiff reversed and judgment for the defendant; judgment against a trustee reversed and trustee discharged.
Porter, Witters Longmoore for the defendant.
Louis Lisman and A. Pearley Feen for the plaintiff.
Present: MOULTON, C.J., SHERBURNE, BUTTLES, STURTEVANT and JEFFORDS, JJ.
This action in contract, with declaration in the common counts, was originally brought by the plaintiff Barnet Glass. Upon the trial it appeared that one of the items of the specifications, amounting to $45.54, was claimed to be owed by the defendant not to Glass personally, but to a copartnership of which he was a member. He therefore moved for leave to join with him, as parties plaintiff, "Barnet Glass and Samuel Lisman, doing business under the firm name and style of Style Shoppe." After hearing thereon, the motion was granted, and no exception appears to have been taken to the ruling. The trial court filed its findings of fact, and rendered separate judgments for Glass to recover the sum of $190.26, and for the Style Shoppe to recover the sum of $45.54. One of the trustees, The Richford Savings Bank and Trust Company, was held liable according to its disclosure; the other trustee, the National Bank of Newport, was discharged. The defendant excepted to each of the two judgments rendered against it and to certain of the findings.
We first consider the judgment in favor of the Style Shoppe. Being a copartnership, this concern was an entity separate and apart from the individuals composing it. Dunbar v. Farnham Wife, 109 Vt. 313, 321, 196 A. 237, 114 A.L.R. 996. The findings disclose that the claim of this plaintiff was based upon a separate and distinct contract from the contract upon which the original plaintiff, Glass, was seeking to recover. Although no exception was taken to the granting of the motion to make the Style Shoppe a party plaintiff, the exception to the judgment, which reaches every question involved in its rendition and necessary to its validity, is sufficient to bring the issue before us. Morgan v. Gould, 96 Vt. 275, 280, 281, 119 A. 517. And, indeed, the question touches the jurisdiction of the trial court, and so may be raised here for the first time. Smith v. White's Est., 108 Vt. 473, 480, 188 A. 901; Fuller Co. v. Morrison, 106 Vt. 22, 24, 169 A. 9. We will, moreover, dismiss a cause at any stage, whether moved by a party or not, when a lack of jurisdiction is discovered. Miner's Exrx. v. Shanasy, 92 Vt. 110, 112, 102 A. 480; Fillmore, Admr. v. Morgan's Estate, 93 Vt. 491, 493, 108 A. 840.
In granting the motion the trial court, as appears from the findings, assumed to act under P.L. 1629, which provides that: "When, in an action founded on contract, it appears before final judgment that another person is a party to such contract, and ought to have been joined in the action as coplaintiff or codefendant, the action shall not thereby be abated or defeated," but the missing party may be brought into the case, in the manner prescribed by the statute. But this section has no application here, because Glass and the Style Shoppe were not parties to the same contract, hence not interested in the identical claim. Wyman et al. v. Wilcox's Est., 63 Vt. 487, 489, 21 A. 1103. By the common law, which in the absence of statutory modification is controlling, courts cannot take jurisdiction of distinct and separate claims against different persons in the same action. Conti v. Johnson and Mann, 91 Vt. 467, 472, 100 A. 874; Fuller Co. v. Morrison, supra. And so, also, two or more promisees, whose interests are several, must sue separately for damages. Anderson v. Nichols, 93 Vt. 262, 264, 107 A. 116; Starrett v. Gault, 165 Ill. 99, 46 N.E. 220, 221; Moore v. Terhune, 161 Ill. App. 155, 156; Woodward v. Sherman, 52 N.H. 131, 132; Wills v. Cutler, 61 N.H. 405, 410; Hinchman v. Patterson Horse R.R. Co., 17 N.J. Eq. 75, 82, 86 A.D. 252; Gravenberg v. Laws, (5th Cir.) 100 Fed. 1, 6; Governor, for the use of Moore and Myrick v. Hicks et al., 12 Ga. 189, 191; Jones v. Etheridge, 6 Porter (Ala.) 208, 212; Barry v. Rogers, 2 Bibb, (Ky.) 314, 315; Fein v. National Biscuit Co., 29 Pa. Dist. and Co. Reps. 347, 349; and see Grant v. Schmidt, 22 Minn. 1, 13. The trial court exceeded its jurisdiction in admitting the new coplaintiff, and this being so, the cause stands as though the Style Shoppe had never appeared therein and the judgment in its favor is of no effect.
The defendant asks for judgment on the merits, on the ground that the findings show no liability on the part of the defendant to the Style Shoppe, but, however this may be, we cannot consider a matter over which there exists no jurisdiction, and this question must remain to be determined in other proceedings, if such shall be instituted.
The action brought by the original plaintiff, Glass, is not abated by the misjoinder of the Style Shoppe (P.L. 1581) and therefore the judgment in his favor is for review upon the record.
Stripped of much detail that is immaterial to the decision of this cause, the following facts emerge from the findings: For some time previous to July, 1936, Dora Toplitt was engaged in the clothing business in Newport under the name of the Newport Clothing Company. After a loss by fire, Michael Toplitt, Dora's husband, called upon the plaintiff Glass and told him that he was about to organize the business as a corporation, and needed some merchandise. Glass agreed to extend credit, and accordingly merchandise was furnished by him to the fair and reasonable value of $190.26, delivered to Toplitt, and charged either to the Newport Clothing Company, or to the then nonexistent Newport Clothing Company, Inc. The latter concern is the defendant herein, and was incorporated under the laws of this state on August 21, 1936, Michael Toplitt becoming its president. All of the merchandise was delivered to Toplitt before this date. The findings state that Toplitt testified in substance that the defendant corporation took over the assets of the Newport Clothing Company, and "while it does not affirmatively appear that the merchandise referred to * * * ever came into possession of the corporation, however, I find that the same was purchased by and delivered to Mr. Toplitt for the Newport Clothing Co., Inc.;" and that "Barnet Glass individually extended such credit to the Newport Clothing Company, Inc."
The defendant corporation was not, and could not have been, a party to the contract of sale, because it was not in being at the time. Holyoke Envelope Co. v. U.S. Envelope Co., 182 Mass. 171, 174, 65 N.E. 54. For the same reason, Toplitt was not, and could not have been, its agent in the transaction. Hall v. Vt. and Mass. R.R. Co., 28 Vt. 401, 406; Security Co. v. Bennington Monument Assoc., 70 Vt. 201, 206, 40 A. 43. But the defendant would become liable thereon if, after its organization, it expressly or impliedly assumed the obligation, by the adoption or ratification of the contract. Gardiner v. Equitable Office Bldg. Corp., (2nd Cir.) 273 Fed. 441, 17 A.L.R. 431, 438; Kirkup v. Anaconda Amusement Co., 59 Mont. 469, 197 P. 1005, 17 A.L.R. 441, 446; Ramsey v. Brook County Bldg. Loan Assoc., 102 W. Va. 119, 155 S.E. 249, 49 A.L.R. 668, 673. And where a corporation, after organization, accepts the benefit of a contract made in good faith by its promoter in its behalf previous to its organization, and the contract is one which would have been within its corporate powers to make, the inference is justified that it has adopted or ratified such contract. United German Silver Co. v. Bronson, 92 Conn. 266, 102 A. 647, 648; Commissioners of Lewes v. Breakwater Fisheries Co., 13 Del. Ch. 234, 117 A. 823, 829; Wilson v. Harburney Oil Co., (10th Cir.) 89 Fed. (2d) 211, 213; Maryland Apt. House v. Glenn, 108 Md. 377, 70 A. 216, 218, 219; Robbins v. Bangor Ry., etc., Co., 100 Me. 496, 62 A. 136, 139, 1 L.R.A. (N.S.) 963.
There is no finding, and no claim, of an express adoption here; what the plaintiff Glass argues is that the defendant received the merchandise, and hence had the benefit of the contract. But this contention is not borne out by the record. The statement in the findings that Toplitt testified that the corporation took over the assets of the Newport Clothing Company is not equivalent to a finding that this was the fact, but is only a finding that the witness so testified (see Vilas v. Seith, 108 Vt. 18, 22, 183 A. 854; Peck v. City Trust Co., 104 Vt. 20, 28, 156 A. 403), and indeed there is nothing to show that the merchandise in question was a part of such assets.
While we must indulge all reasonable intendments in favor of the judgment and read doubtful findings so as to support it, if we reasonably can do so, we cannot supply the omission of an essential fact not fairly inferable as resulting from the facts as found. Wright v. Godin, 108 Vt. 23, 26, 182 A. 89; Manley Bros. v. Somers, 100 Vt. 292, 297, 137 A. 336.
The other findings even more effectually dispose of the contention. The burden was upon Glass to prove the necessary elements of his claim; among them, that the corporation received and accepted the merchandise. The finding that it did not affirmatively appear that it ever came into the possession of the corporation amounts to a failure to find the fact. Wright v. Godin, supra; Partridge v. Cole, 98 Vt. 373, 377, 127 A. 653. The argument that what the trial court meant by the word "affirmatively" was that the fact was shown by circumstantial rather than by direct evidence is, we think, more ingenious than convincing. "By affirmative proof is meant such evidence of the truth of the matters asserted as tends to establish them and this regardless of the character of the evidence offered." Jenkins v. Hawkeye Commercial Men's Assoc., 147 Iowa, 113, 124 N.W. 199, 30 L.R.A. (N.S.) 1181, 1184.
The finding that the merchandise was purchased by and delivered to Toplitt for the Newport Clothing Co., Inc., adds nothing to the defendant's liability, since, as we have seen, the corporation, being nonexistent at that time, could not be bound on any theory of agency in the absence of a subsequent adoption or ratification. And the finding that Glass extended credit to the Newport Clothing Co., Inc. has no greater effect because this extension of credit to an anticipated, but as yet unborn, debtor is, standing alone, of no avail. The judgment in favor of Glass was not justified by the facts as found. It is, therefore, unnecessary to consider the defendant's exceptions to the findings.
The judgment in favor of the Style Shoppe is reversed, and the action, so far as this plaintiff is concerned, is dismissed, with costs to the defendant. The judgment in favor of Barnet Glass is reversed, and judgment for the defendant to recover its costs. The judgment against the trustee, the Richford Savings Bank and Trust Company, is reversed and the trustee is discharged.