BELL v. COMMERCIAL INV. TRUST CO.

BELL v. COMMERCIAL INV. TRUST CO.
1926 OK 510
246 P. 1102
118 Okla. 230
Case Number: 16777
Decided: 06/01/1926
Supreme Court of Oklahoma

BELL
v.
COMMERCIAL INV. TRUST CO., Inc.

Syllabus

¶0 Corporations--Legality of Incorporation Admitted by Suit or Counterclaim Against Corporation.
A person who sues a corporation as such thereby admits the legality of its incorporation and is estopped from denying it in that suit. The same is true when a person files a cross-petition or counterclaim against a corporation.

Wyley E. Crabtree and Frank N. Hickman, for plaintiff in error.
A. C. Saunders, for defendant in error.

 
ESTES, C.

¶1 Parties will be referred to as they appeared in the trial court, inverse to their order here. The Commercial Investment Trust Company, Inc., alleged to be a corporation, had judgment against defendant, Eva H. Bell, on verdict of jury, for $ 474.27 and interest, as balance on a promissory conditional sales contract, executed by defendant, Bell, to Mott Motor Company for balance of purchase price of an automobile, and by that company, for value, assigned and delivered to plaintiff. Defendant filed verified denial of the corporate existence of plaintiff, admitted the execution of the contract sued upon, and pleaded payment of the balance of the claim. Defendant also, by way of cross-petition against the plaintiff, pleaded two specific items of damage and prayed that plaintiff take nothing, and that she, defendant, have judgment against plaintiff for $ 1,000.

¶2 The only error assigned for review by defendant in this appeal is whether she is estopped to deny the corporate existence of plaintiff, it being conceded that defendant duly denied such corporate existence by her verified answer, and thereby cast this burden of proof upon the plaintiff.

"An estoppel to deny corporate existence may arise from a judgment or other matter of record. An estoppel to deny the corporate existence may also arise from an express or implied admission of the fact in an action or proceeding brought by or against an alleged corporation. One who sues an alleged corporation as such thereby necessarily admits that it is a corporation and is estopped to deny its corporate existence, * * * and for the same reason, a defendant is estopped to deny plaintiff's corporate existence by counterclaiming and asking judgment against it as a corporation." 14 C. J. 248; Ward v. Minnesota, etc., R. R. Co. (Ill.) 10 N.E. 365; Rialto Co. v. Miner (Mo.) 166 S.W. 629; Black River Imp. Co. v. Holway (Wis.) 55 N.W. 418; McKnight v. Mineral Point (Wis.) 1 Pin. 99.

¶3 In Swofford Bros. Dry Goods Co. v. Owen et al., 37 Okla. 616, 133 P. 193, 198, this court quoted with approval the following from Clark and Marshall on Private Corporations, 275:

"A person who sues a corporation as such thereby admits the legality of its incorporation, and is estopped from denying it in that suit. And the same is true where a person files a cross-bill or petition, or counterclaim against a corporation."