Epitomized Opinion
This was an action for deceit brought by Sisser against R. E. and R. W. Gammel. The principal misrepresentation set forth was that the Gammels represented that a certain company was a corporation when it was not. While the corporation in question was a going concern, Sisser made application to purchase 30 shares of stock. At the time there was only 8 shares of stock in the treasury. In order to give Sisser his quota R. E. Gammel turned back into the treasury 17 shares and R. W. Gammel turned back 5 shares. Later Sisser was elected director and assisted in passing a resolution increasing the capital stock of the company, and the stock that had been loaned to the company by the Gammels was returned to them. Later the company got into financial difficulties and R. E. Gammel pursuaded all the stockholders, including Sisser, to contribute $100 to keep the. concern on its feet. When the plaintiff’s note became due he refused to pay it, and brought this action. The evidence disclosed that R. W. knew nothing about the transaction, but the plaintiff attempted to hold him on the ground that R. E., in addition to acting for himself, had. acted as R. W.’s agent. The trial rescinded the contract, whereupon error was prosecuted. In reversing the judgment of the lower court, it was held:
1. Although the incorporators did not sign a waiver for the election of directors, yet-the company was at least a de facto corporation, and therefore no misrepresentation was • made as to the character of the organization.
2. As plaintiff was a director in the company for some time and treated the company as a corporation, he -is estopped from later setting up the fact that the concern is no corporation.
3. As the principal and agent cannot be jointly sued except where they act jointly in committing the act in question, there is a misjoinder of causes of action and parties where they are made joint defendants in the same action.