Formation and Organization of Corporations  Until the AoI is filed in the office of the register of deeds of the country,

ffice of the register of deeds of the country, there

96 Wis. 641 – Bergeron v. Hobbs is no color of legal right to act as a corporation.
Newman, J. o Bayfield is not under a color of right since the AoI must 1 st be filed
as condition precedent. With this, they are neither de jure nor de
US case for collection of sum of money. Defendants argued that they formed a
corporation, and as thus cannot be personally liable for the amount being collected. It was facto.
discovered during trial that the articles of organization of the defendants and the certificate  It is not necessary to prove a co-partnership by evidence. The co-
of election of officers had been recorded at the register of deeds, but were not kept on file partnership of the defendants was established by implication of law.
there.
DISPOSITIVE PORTION
Wisconsin SC ruled that defendants did not form a corporation, and were not a de facto Circuit court judgment affirmed.
corporation; thus, they are liable as co-partners.
DISSENT (MARSHALL, J.)
Bayfield was a corporation de facto; thus, the defendants are not personally liable.
DOCTRINE  Beach and Thomp. agree that a pretended corporation is personally liable for not
As a general rule, where an attempt to organize a corporation fails, by omission of some being a corporation in fact.
substantial step or proceeding required by the statute, its members or stockholders are  Judge Thompson, however, states that if a corporation never came into being
liable as partners for its acts and contracts. (and failing to comply with all conditions precedent) it is personally liable as a de
facto corporation. However, he further says that if the corporation does exist, it
escapes personal liability. Such theory lacks harmony. If such were the case
FACTS (and applied in other states) nothing would qualify as a de jure corporation.
1. Bayfield Agricultural Association (which was organized by the defendants) employed  It is therefore held that Defendant is a de facto corporation. The elements of such
several persons to perform labor in improving their grounds and in erecting fences clearly appear on record:
and buildings. It assigned to plaintiff time checks for such operation. a. There’s a law under which it might have existed
2. Plaintiff brought an action to recover the amount for said time checks, alleging that b. By mistake, it was recorded and returned instead of leaving it at the register
defendants were a co-partnership. of deeds as the law required
3. Defendants did not rebut the unpaid debt to plaintiff, but denied co-partnership and c. It exercised corporate powers
alleged that they were liable as a corporation Such elements prima facie established good faith.
4. Upon trial, it appeared that Bayfield County Agricultural Association’s articles of  Plaintiff cannot deny such in their relations, supposing that the corporation was a
organization and a certificate showing the election of officers had been recorded in corporate body till long after his contract relations with the Defendant association
the office of the register of deeds of Bayfield, but were not on file there. They had ceased.
been deposited and recorded, but failed to remain.
5. Circuit Court ordered defendants to pay the amount of the time checks.
DIGESTER: Cristelle Elaine V. Collera
ISSUE with HOLDING
1. W/N the recording of the articles of incorporation and the certificate of election
of officers was sufficient compliance with the law to form a corporation – No.
 The filing of the proper papers in the proper office is made a condition
precedent to the vesting of the corporate powers, according to statute. Mere
recording and, later, removal of the papers, from the office (which happened
here) fails to serve the full purpose which the legislature intended to
accomplish.
 The term “filing” and the verb “to file,” as related to this subject, include the
idea that the paper is to remain in its proper order on file in the office
(delivered and received by the proper officer).
 Since there are valuable rights and exemption from personal liability to be
secured, strict observance is required. The defendants failed in this respect,
and were not vested with corporate powers.

2. If not, W/N the defendants are liable as co-partners – Yes.

 Defendants cannot assume to be a de facto corporation, and seek immunity
from individual liability.