Opinion
No. 33002.
January 24, 1938.
1. NAMES.
Generally, a private person may use any unappropriated trade-name which he may select under which to conduct his business.
2. CORPORATIONS.
Where private person conducts business under corporate name appropriate to a foreign corporation, and represents to persons with whom he deals that the name is that of a real foreign corporation, and attachment is taken against the ostensible corporation as a nonresident, such person is estopped from denying corporate entity, especially where asserted cause of action arises out of a transaction had in regular course of dealing with ostensible corporation.
3. CORPORATIONS.
A corporation cannot be created as against the state by mere agreement, admission, assent, or other acts of private persons.
4. CORPORATIONS.
Private persons may estop themselves, as between themselves, by agreements, admissions, representations, or conduct from denying existence of corporation, so that for purpose of their private litigation their business claiming to be a foreign corporation may become a corporation to all intents and purposes.
5. CORPORATIONS.
Where Mississippi resident did business under name of "Tennessee Brokerage Company, Inc.," and her salesman represented that the business was conducted by a Tennessee corporation with branch office in Mississippi, attachment was properly taken as against a foreign corporation, and was valid against funds to its credit in Mississippi bank.
6. JUSTICE OF THE PEACE.
Where Mississippi resident did business ostensibly as a Tennessee corporation, and attachment was brought as against Tennessee corporation, resident must intervene and defend as the actual original party defendant, rather than as a third party claimant, and circuit court properly dismissed her appeal from justice court decision, brought on theory that Tennessee corporation did not exist (Code 1930, section 153).
APPEAL from the circuit court of Sunflower county. HON. S.F. DAVIS, Judge.
John W. Crisler, of Clarksdale, for appellant.
In Mississippi there is no such thing as a special appearance. When a party comes into court he is there for all purposes. It is immaterial whether he designates himself defendant, claimant, petitioner, movant, or intervener, he is there fully and completely, and he cannot by a designation either broaden his rights or limit his liability. When he enters the lists the gates of the arena are closed against retreat and he is there until the contest is ended. In the courts of Mississippi the designation is nothing, the appearance everything.
McCoy v. Watson, 154 Miss. 307, 122 So. 368; Afro-American Sons Daughters v. Webster, 172 Miss. 602, 161 So. 318; J.A. Maloney Co. v. Tatum, 134 Miss. 714, 99 So. 129.
As an example of the extent to which the Mississippi courts have gone in disregarding the designation of the parties or the capacity in which they appear, we refer to Jones v. Railroad Company, 75 Miss. 913.
Jurisdiction in an attachment suit can be sustained on only two grounds: first, that the defendant is a resident of the county where the suit is brought; and second, that assets of the defendant were levied on in that county. If neither of these grounds exists the court is without jurisdiction.
Section 127, Code of 1930; Baum Co. v. Burns, 66 Miss. 124, 5 So. 697; Campbell v. Triplett, 74 Miss. 365, 20 So. 844.
In the case at bar it is undisputed that the appellant was a resident of Panola County. Should we then show to the court that the writ of attachment was void there would be no lawful levy, and the Sunflower County court was without jurisdiction. In such a situation the motion to quash must be sustained.
Where suit is brought against a non-existent defendant, the whole proceeding is void ab initio and its invalidity may be called to the attention of the court at any stage of the proceeding.
47 C.J., 193 (368) and 66 (138).
The remedy by attachment is available only against the property of persons natural or artificial, and, as a general rule, the party against whom an attachment is available must stand in the relation of debtor to the plaintiff in the action.
6 C.J. 40 (22); Metropolitan Street Ry. v. Adams Exp. Co., 145 Mo. App. 371, 130 S.W. 101; Life Ins. Co. of Virginia v. Page, 172 So. 873.
It seems to us that the Supreme Court of Mississippi has directly and unequivocally settled this question in the case of Purnell v. Frank, 68 Miss. 639, in which it was held that a writ of attachment for rent against a deceased person was plainly void.
It seems to us, from a consideration of these authorities, that the conclusion is inescapable that the writ of attachment in the case at bar was void. If the writ of attachment was void then necessarily there was no lawful levy. If there was no lawful levy the courts in Sunflower County had no jurisdiction, for neither ground of jurisdiction essential in an attachment suit existed.
Irrespective of appellant's residence these proceedings could not bring her into court on debt issue.
Ordinarily a defendant in an attachment is required to answer on the debt issue after the quashing of the attachment; but this is true only where the proceedings are valid. If the proceedings are void, the defendant is not in court on the debt issue. In this case the defendant, appellant here, could not have been required to answer on the debt issue even if she had been a resident of Sunflower County. The entire proceeding was void.
Sawyers v. Smith, 41 Miss. 554; Wood v. Baily, 77 Miss. 815, 27 So. 1001.
James O. Eastland, of Ruleville, for appellee.
Section 151 of the Code of 1930 is as follows: "All the provisions of law in relation to third persons claiming property levied on by virtue of feri facias shall extend and apply to claimants of property levied on by virtue of writs of attachment. The trial of the right of property shall not be had until after judgment in favor of the plaintiff in the attachment suit, and proceedings in garnishment shall be in accordance with the provisions of law on that subject."
Section 3424, Code of 1930, provides as follows: "When any person not a party to the execution shall claim to be owner of or to have a lien upon any personal property levied upon, etc."
It is seen from Section 151 of the Code of 1930 that in attachment suits when a third person claims the property attached the law with reference to trial of right of property fully applies, and further, that the trial of the right of property shall not be had until after judgment in favor of the plaintiff in the attachment suit.
Appellant's testimony shows that Mrs. Taylor was and is the Tennessee Brokerage Company, Inc. She was therefore a party to the attachment suit. She was the defendant in that suit, and being the defendant and being a party to the suit, under Sections 3424 of the Code of 1930 she cannot appear as a third party claimant because she was the principal defendant.
6 C.J., page 374, sec. 832.
In this case the judgment against Tennessee Brokerage Company, Inc., was not appealed from. The Circuit Court, therefore, did not err in sustaining appellee's motions and dismissing the appeal because all the proof showed without conflict that Mrs. Taylor, appellant, was an original party to the suit, and being an original defendant and having a judgment against her as an original party to the suit, she cannot then appear as a third party claimant and try the right of property.
Appellant is estopped to deny that she is a corporation and in truth and fact she is a de facto corporation.
Casey v. Galli, 94 U.S. 673, 24 L.Ed. 168; 14 C.J., page 235, sec. 254, page 245, sec. 271, and page 226, sec. 234.
The attachment was not void and appellant's motion to quash the attachment was properly overruled. Appellant was sued under the name and in the capacity that she represented herself to be. The law permits no one to take conflicting positions. She represented herself to the public to be a corporation, she represented herself to appellee as a corporation, she is for the purpose of this litigation a corporation de facto. By her acts and conduct she is estopped from saying Tennessee Brokerage Company, Inc., is not a corporation. She is most certainly estopped from saying that Tennessee Brokerage Company, Inc., is neither a natural or artificial person. She was by her evidence a defendant in the original attachment suit, and while a party to the original attachment suit she appeared as the third party claimant and filed a claimant's affidavit and demanded that the appellee, Aldridge, be mulched in damages because he, in good faith, and in reliance upon her own representations, sued her in the capacity that she represented herself to be.
Some time during the month of January, 1936, appellee purchased from the Tennessee Brokerage Company, Inc., a car of hay. The hay was shipped from Gibbs, Tenn., on a bill of lading with draft attached; the draft being drawn by Tennessee Brokerage Company, Inc., through a bank at Clarksdale, Miss., on appellee at Bank of Ruleville, Ruleville, Miss. Appellee paid the draft to the Bank of Ruleville, took thereby the bill of lading, unloaded the hay, and upon weighing it found the shipment considerably short in weight. Thereupon appellee filed an attachment suit in a justice of the peace court, at the domicile of the Ruleville bank, against the Tennessee Brokerage Company, Inc., as a nonresident corporation and garnished the Bank of Ruleville which had in its hands the proceeds of the draft, standing to the credit of the Tennessee Brokerage Company, Inc. The bank answered the writ of garnishment and admitted that it was indebted to Tennessee Brokerage Company, Inc., in the entire sum of the proceeds of said draft theretofore paid to it by appellee as aforementioned.
Within a few days appellant filed her claimant's affidavit, under section 153, Code 1930, wherein she stated that she "enters her appearance in this cause solely as claimant," and stated further therein that the attached money "belongs solely to her and that the Tennessee Brokerage Company, Inc., a corporation organized under the laws of the State of Tennessee and a nonresident of Mississippi, has no right, title or interest of any kind in said money." It appears from the recitals of the judgment of the justice of the peace that when the case came on to be heard "it was agreed by the plaintiff and the claimant that the claimant's issue should be tried along with the rest of the case, all together," and that the court rendered judgment in favor of plaintiff therein, appellee herein, against the brokerage company in the sum of $88, and against the attached funds, and disallowed the claimant's claim. Within the time allowed by law appellant appealed to the circuit court; the appeal bond reciting that "the condition of this obligation is such that on February 11, 1936, a judgment was rendered in the above cause in favor of the said C.H. Aldridge as plaintiff in said cause, and denying the claim of the principal herein, as claimant in said cause," etc.
When the matter came on to be heard in the circuit court, it had been ascertained that the position and contention of appellant was that there was not, and had never been, any such an entity, corporate or otherwise, as the Tennessee Brokerage Company, Inc.; that this was simply a tradename under which appellant conducted her business; that she in fact was and is a resident of Panola county in this state; and that the brokerage business under the trade-name aforesaid was conducted for her by her husband at Clarksdale, Miss. Her position was ascertained to be, and is now, that since there was no such legal entity as Tennessee Brokerage Company, Inc., there was no party defendant in the attachment suit; that the attachment was therefore void, or, if not void, was wrongfully sued out, and that she could properly raise the issue by tendering a claimant's affidavit, rather than intervening as the real party defendant. When this position of appellant was disclosed to the circuit court, the court on motion dismissed the claimant's appeal, on the ground that appellant was and is no third party claimant, and could occupy no admissible attitude toward the litigation other than as an original party defendant, which position she had not sought to take, but, on the contrary, had expressly defined her attitude "solely as a claimant."
The undisputed proof shows that appellant conducted her said business under the corporate name aforesaid, that her office signs carried that name, as well as all her office stationery, including order blanks, and, further, that her salesmen in taking orders from appellee represented to him that the business was that of a corporation organized under the laws of Tennessee, but with a branch office at Clarksdale in this state; that appellee had no other information, and no information sufficient to put him on notice or inquiry that the business was other than so represented. As already noted, the draft was drawn on appellee in that name, and the attached funds stood in the bank to the credit of the ostensible corporation of that name.
A private person may, as a rule, use any unappropriated trade-name which he may select as the name under which he conducts his business. If he select a corporate name indicating that the name is that of a corporation of a foreign state, and represent to those with whom he deals that the name is that of a real corporation of said foreign state, he must, in the interest of plain justice, be estopped from denying what he has so represented when an attachment has been taken against said supposed corporation as a nonresident, particularly so, when, as here, the asserted cause of action arises out of a transaction had in the regular course of dealing with said ostensible corporation. Although, as against the state, a corporation cannot be created by the mere agreement, admission, assent, or other act or admission of private persons, yet, as between themselves, and so far as concerns their own private litigation and contestations, they may by their agreements, their admissions, their representations, or their conduct estop themselves from denying the fact of the existence of the corporation, so that for the purpose of such private litigations the business claiming to be a corporation, and a foreign corporation, may become such to all intents and purposes as much as though it were an actual corporation de jure. 14 C.J., p. 226, section 234. As said by the court in Casey v. Galli, 94 U.S. 673, 680, 24 L.Ed. 168: "Parties must take the consequences of the position they assume. They are estopped to deny the reality of the state of things which they have made appear to exist, and upon which others have been led to rely. Sound ethics require [in such a case] that the apparent, in its effects and consequences, should be as if it were real, and the law properly so requires."
We must conclude, therefore, that the attachment was properly taken as against the ostensible foreign corporation and is valid as against the funds to its credit in said bank; that if appellant desired to intervene and defend she was required to do so as the actual original party defendant, and not as a third party claimant, and that the court was correct in refusing her recognition as a claimant and in dismissing her appeal as such.
In arriving at this conclusion we have not overlooked the argument by appellant that when she came into the attachment court as a claimant, she was there for all purposes; that there is no such thing as a special appearance in this state; and that, therefore, she should be considered as an original defendant in the attachment suit; and that her appeal bond, as a claimant, should be considered as an appeal bond of herself as a defendant. In one part of her brief she maintains that there was no defendant at all in the attachment suit, that that proceeding was therefore a nullity, and in another part she says that she should be considered the original defendant. She chose her ground when she came in as a claimant and must be held to it; she could not be both a defendant and at the same time a third party claimant, there being no irregularity or invalidity in the attachment, as we have already pointed out.
Affirmed.