Emerich v. People's Coal Co.

Cuyahoga Circuit Court

Emerich v. People's Coal Co.

33 Ohio C.C. Dec. 275, 21 Ohio C.C. (n.s.) 83

DecidedFebruary 4, 1907

StatusPublished

This text of 33 Ohio C.C. Dec. 275 (Emerich v. People's Coal Co.) is published on Counsel Stack Legal Research, covering Cuyahoga Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Emerich v. People's Coal Co., 33 Ohio C.C. Dec. 275, 21 Ohio C.C. (n.s.) 83 (Ohio Super. Ct. 1907).

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Opinion

MARVIN, J.

We reach the conclusion, after a careful consideration of these cases, that was reached by the referee, that the provision of the constitution in reference to the liability of stockholders in corporations, as it existed prior to the recent amendment, is self-executing. Whether that be so or not, we reach the conclusion that the legislation of 1903, whereby it was sought to relieve a stockholder from liabililty, is in contravention to the provisions of the constitution, that the act is therefore invalid, including the repealing clause, so that the liability of the stockholder is governed by the statutes as they were prior to that amendment. An opinion has not been prepared on all of the propositions, although every one of them that are involved in this case have been carefully considered.

On this matter of the constitutionality of the law, attention is called in our own state to the ease of State v. Sherman, 22 Ohio St. 411, from which I will not stop to read, and ontside of Ohio, to the case of Willis v. St. Paul Sanitation Co., 48 Minn. 140 [50 N. W. 1110; 16 L. R. A. 281; 31 Am. St. 626], where it is held that Art. 10, paragraph 3, of the constitution of Minnesota providing that each stockholder in any corporation (excepting those organized for the purpose of carrying on any kind of manufacturing or mechanical business), shall be liable to the amount of stock held or owned by him, is self-executing.

[276]*276In Woodworth v. Bowles, 61 Kans. 569 [60 Pac. 331], it is held that the provision of the constitution of Kansas, Art. 12, Sec. 2, thereof which provides that dues from corporations shall be secured by individual liability of the stockholders to an additional amount equal to the stock owned by each stockholder, and such other means as shall be provided by law, is not self-executing.

But in Whitman v. Oxford National Bank, 176 U. S. 559 [44 L. Ed. 587; 20 Sup. Ct. 477], in the opinion delivered by Justice Brewer of Kansas in considering this same provision of the constitution of Kansas, he says that the words in this constitutional provision “shall be secured” are not merely directory to the Legislature to make provision for such liability, but themselves declare it. To this extent the Constitution is self-executing.

In Farmers’ Loan & Trust Co. v. Funk, 49 Neb. 353 [68 N. W. 520], it is held that Art. 11, Sec. 7, of the constitution of Nebraska, which provides that every stockholder in a banking corporation or institution shall be individually responsible and liable to its creditors over and above the amount of stock by him held to an amount equal to his respective stock or shares so held, for all liabilities accruing while he remains such stockholder, etc., is self-executing.

We reach the conclusion, therefore, that the liability of the stockholders to the creditors is exactly as it was prior to the statute of 1902. The subscription made by all those persons who subscribed to the blanks made them stockholders.

We reach the conclusion that was reached by the referee as to each of the parties in the case, and a decree will be drawn accordingly and exceptions noted.

Winch and Henry, JJ., concur.

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MARVIN, J.

We reach the conclusion, after a careful consideration of these cases, that was reached by the referee, that the provision of the constitution in reference to the liability of stockholders in corporations, as it existed prior to the recent amendment, is self-executing. Whether that be so or not, we reach the conclusion that the legislation of 1903, whereby it was sought to relieve a stockholder from liabililty, is in contravention to the provisions of the constitution, that the act is therefore invalid, including the repealing clause, so that the liability of the stockholder is governed by the statutes as they were prior to that amendment. An opinion has not been prepared on all of the propositions, although every one of them that are involved in this case have been carefully considered.

On this matter of the constitutionality of the law, attention is called in our own state to the ease of State v. Sherman, 22 Ohio St. 411, from which I will not stop to read, and ontside of Ohio, to the case of Willis v. St. Paul Sanitation Co., 48 Minn. 140 [50 N. W. 1110; 16 L. R. A. 281; 31 Am. St. 626], where it is held that Art. 10, paragraph 3, of the constitution of Minnesota providing that each stockholder in any corporation (excepting those organized for the purpose of carrying on any kind of manufacturing or mechanical business), shall be liable to the amount of stock held or owned by him, is self-executing.

[276]*276In Woodworth v. Bowles, 61 Kans. 569 [60 Pac. 331], it is held that the provision of the constitution of Kansas, Art. 12, Sec. 2, thereof which provides that dues from corporations shall be secured by individual liability of the stockholders to an additional amount equal to the stock owned by each stockholder, and such other means as shall be provided by law, is not self-executing.

But in Whitman v. Oxford National Bank, 176 U. S. 559 [44 L. Ed. 587; 20 Sup. Ct. 477], in the opinion delivered by Justice Brewer of Kansas in considering this same provision of the constitution of Kansas, he says that the words in this constitutional provision “shall be secured” are not merely directory to the Legislature to make provision for such liability, but themselves declare it. To this extent the Constitution is self-executing.

In Farmers’ Loan & Trust Co. v. Funk, 49 Neb. 353 [68 N. W. 520], it is held that Art. 11, Sec. 7, of the constitution of Nebraska, which provides that every stockholder in a banking corporation or institution shall be individually responsible and liable to its creditors over and above the amount of stock by him held to an amount equal to his respective stock or shares so held, for all liabilities accruing while he remains such stockholder, etc., is self-executing.

We reach the conclusion, therefore, that the liability of the stockholders to the creditors is exactly as it was prior to the statute of 1902. The subscription made by all those persons who subscribed to the blanks made them stockholders.

We reach the conclusion that was reached by the referee as to each of the parties in the case, and a decree will be drawn accordingly and exceptions noted.

Winch and Henry, JJ., concur.

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33 Ohio C.C. Dec. 275, 21 Ohio C.C. (n.s.) 83, Counsel Stack Legal Research, https://law.counselstack.com/opinion/emerich-v-peoples-coal-co-ohcirctcuyahoga-1907.

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