Rider v. Fritchey

49 Ohio St. (N.S.) 285
CourtOhio Supreme Court
DecidedMarch 22, 1892
StatusPublished

This text of 49 Ohio St. (N.S.) 285 (Rider v. Fritchey) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rider v. Fritchey, 49 Ohio St. (N.S.) 285 (Ohio 1892).

Opinion

Spear, C. J.

A preliminary question arises upon an objection made by defendant in error that because the plaintiff in error has brought into this court as defendant, only the pa-intiff below, the court cannot have jurisdiction for [291]*291want of necessary parties. If a reversal of the judgment would deprive defendant in error of any right as to parties below not present here, there would be force in this objection. But if the petition does not make a case against any of the alleged stockholders, it cannot prejudice the defendant in error that the other parties below are not parties in this court.

The petition is attacked here on two grounds. 1. That it is insufficient for want of an averment that the street railroad company was incorporated since the adoption of the constitution of 1851. 2. That there can be no liability in the present case against stockholders because stockholders are not liable for obligations of the corporation growing out of torts.

1. In support of the first proposition the argument is that in order to maintain the petition’ it must be held that stockholders in all corporations incorporated under the laws of Ohio are liable for the debts or liabilities of the corporation, which cannot be, for the reason that as to many, if not all. corporations organized prior to the adoption of the present constitution, no statutory liability whatever was imposed on stockholders. Hence an allegation such as is contained in the petition in this case that the “company is a corporation duly incorporated under the laws of the state of Ohio,” is not an allegation of organization under a law which imposes liability upon stockholders.

The point is one of some nicety, but We are hot impressed with its sufficiency. It will be noted that no demurrer was interposed by the plaintiff in error to the petition. On the contrary, he answered and went to trial. He filed no motion for new trial, took no bill of exceptions, nor did he ask a special finding of facts. The attention of the trial, court was not called to this alleged defect in the petition, nor does it appear to have been urged in the circuit court. Indeed it is stated in defendant’s brief, and not denied, that, upon the argument in the last named court, it was con-ceeded that the company was incorporated under the act of April 10, 1861, which act imposes liat hity in the identical terms of the constitution. It would appear that the party [292]*292is rather late in making this objection,'especially as he has apparently suffered no prejudice. However, waiving this, we think it proper to judicially notice that no statute existed prior to the adoption of the present constitution authorizing the incorporation of a street railroad company, and, having in mind the duty enjoined by our code, to construe pleadings liberally in order to assist the parties in obtaining justice, we are of opinion that the allegation that the “company is a corporation duly incorporated under the laws of the state of Ohio,” is a sufficient averment that it was incorporated under a law enacted since the adoption of the present constitution. And as no such statute would have been valid which did not impose the constitutional liability, (State ex rel. v. Shermau, 22 Ohio St. 411), and as it is not to be assumed that the legislature would enact an invalid statute, the further conclusion would follow that the company was incorporated under a law which did subject stockholders to liability for obligations of the corporation.

2. A more serious question arises with respect to the second point. Can the stockholders of an Ohio corporation be held for obligations of the corporation growing out of torts? It follows from'what has already been stated, that we must assume that this street railroad company was organized under a law which imposed upon stockholders just such liability as the constitutional provision requires. We look, therefore, to the constitution as our guide. The provision, section 3, of article 13, is: “Dues from corporations shall be secured, by such individual liability of the stockholders, and other means, as may be prescribed by law; but, in all cases, each stockholder shall be liable, over and above the stock by him or her owned, and any amount unpaid thereon, to. a further sum, at least equal in amount to such stock.” The question turns upon the import of the word “dues.”

It has been contended that provisions creating individual liability on the part of the stockholders are in derogation of the common law, and are, therefore, to be construed strictly. Authorities in support of this rule are not wanting, and, in so far as such liability is attached by way of penalty for the [293]*293omission of some act required by the statute, as in some of the states, it is probable that_the weight of authority favors the proposition. But all concede that this is a remedial provision, and to hold that there must be applied to it the same test as if it were a penal law, is to hold that all remedial laws must be so construed, for every remedial law must of necessity be in derogation of the common law. Where the provision is simply remedial, though it does impose an obligation which did not attach at common law, we see no reason to insist Upon what is called a strict construction, but believe that the ordinary rule which requires the court to inquire simply as-to the intent ot the law-makers, reading the provisions as they were intended to be read, will best attain the ends of justice. This leads us to look to the intent of the section quote& Speaking in general terms, it must be manifest that the intent was to provide that those who derive advantage from the authority of the state, given by our incorporation laws, shall, at the same time, assume responsibility .for the acts of the artificial creature which they have called into legal being, affecting the rights of others. Having in mind this general intent, and the provision being remedial, it should, we think, be construed with a view to remove the evil and extend the benefit proposed.

It is conceded that if a cause of action for a tort can be treated as a “debt,” the liability of the stockholders for it would follow. The affirmative of this is asserted, and the following authorities are cited in its support. Carver v. Manufacturing Company, 2 Story, 432; Milldam Foundry v. Hovey, 21 Pick. 417; Grey v. Bennett, 8 Met. 522; Smith v. Omans, 17 Wis. 395, and White v. Hunt, 6 N. J. R. 418. To the contrary of this, counsel for plaintiff in error cite: Bohn v. Brown, 33 Mich. 257; Cable v. McCune, 26 Mo, 371; Doolittle v. Marsh, 11 Neb. 248; Heacock v. Sherman, 14 Wend. 59; Archer v. Rose, 3 Brewster, 264; Child v. Iron Works, 137 Mass. 516; Cook’s Stock and Stockholders, §220; Morawetz, §§ 608, 613; Nanson v. Jacobs, 6 S. W, Rep. 246 (Mo.); Evans v. Lewis, 30 Ohio St. 14; Crouch v. Gridley, 6 Hill, 250; Kellogg v. Schayler, 2 Denio, 73, and [294]*294Zimmer v. Schleehauf, 115 Mass. 52. A review of these authorities would be important if a holding upon the proposition were necessary to a decision of the case before us. "We think it is not.

It would seem to be the undoubted duty of the court to ‘.give the word “dues,” as found in the section quoted, such construction as will secure the apparent object of the constitution-makers in its adoption.

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Kellogg v. Schuyler
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Zimmer v. Schleehauf
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Smith v. Omans
17 Wis. 395 (Wisconsin Supreme Court, 1863)
VanDeuzer v. Peacock
11 Neb. 245 (Nebraska Supreme Court, 1881)
Bohn v. Brown
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Carver v. Braintree Manuf'g Co.
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Bluebook (online)
49 Ohio St. (N.S.) 285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rider-v-fritchey-ohio-1892.