Trippe v. Huncheon

82 Ind. 307
CourtIndiana Supreme Court
DecidedMay 15, 1882
DocketNo. 8172
StatusPublished
Cited by13 cases

This text of 82 Ind. 307 (Trippe v. Huncheon) is published on Counsel Stack Legal Research, covering Indiana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trippe v. Huncheon, 82 Ind. 307 (Ind. 1882).

Opinions

Morris, C.

The appellant, who was the plaintiff below, stated in his complaint, that on the 19th day of December, 1873, Edwin G. McCullom recovered a judgment in the Laporte Circuit Court against the Kankakee Valley Draining Company, for $2,553.16, which still remains unpaid and unreversed; that said judgment was recovered for work and labor performed by said McCullom as the secretary of said company, and that said judgment was duly assigned to the appellant, on the 9th day of January, 1878; that, when the judgment was rendered, each and all of the appellees were members of said company and had been from its organization ; that the company was a corporation, organized December the 16th, 1868, by virtue of an act of the Legislature of Indiana, authorizing the construction of levees_ and drains, approved June 12th, 1852, and an act supplementary thereto, approved June 4th, 1861, and that by the 4th section of the act of March 4th, 1859, all the appellees were made liable for the debts of said company.

It is further stated that McCullonfs claim was a debt contracted by said company, and that said judgment is the debt of the company and the appellees; that the appellees were members of said company from December the 16th, 1868, until its dissolution on February the 2d, 1875; that the appellees subscribed, and caused to be recorded in said county, articles of association under the laws aforesaid, on the 30th day of December, 1868; that on the 24th 'day of March, 1871, said company, by its board of directors, adopted as supplements to its original charter, to take effect from April the 1st, 1871, the provisions of the act approved February 23d, 1871, authorizing the construction of levees, etc.; that on the 7th of May, 1873, the appellees organized said company under the act of March the 10th, 1873, and that it continued to [309]*309be a corporation de facto, under the laws of the State, until February the 2d, 1875, when it was dissolved and its franchises declared forfeited by order of the Laporte Circuit Court A transcript of the judgment declared on and of the proceedings by which the corporation was dissolved, and copies of the original articles of association of the company, the resolution of the board of directors adopting the act of February 23d, 1871, and of the proceedings by which it is alleged that the appellees organized under the act of March the 10th, 1873, were'filed with the complaint.

The appellees demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The court sustained the demurrer, and, the appellant electing to stand by his pleading, final judgment was rendered in favor of the appellees.

The only error assigned is the ruling of the court upon the demurrer.

The appellant insists that the exhibits filed with his complaint do not constitute a part of it, and can not be considered by the court in passing upon the demurrer. "We think that the articles of association by which the Kankakee Valley Draining Company was organized originally, and the papers by which it is claimed that the appellees organized under the act of March the 10th, 1873, may be regarded as a part of the complaint. The other exhibits are not part of the complaint.

We also think that the complaint, with the articles of association filed with it, sufficiently shows that the Kankakee Valley Draining Company was a corporation created and existing under the laws of the State. •

The appellant says: “ There is nothing to show that the Kankakee Valley Draining Company was within the saving clause of the act of December the 14th, 1872, consequently it must be presumed that thjs company went out of existence as a corporation, except as continued by operation of the general law for three years, the time necessary to close up its business. The complaint alleges, and the demurrer admits, a reorgan[310]*310ization of the company under the law approved March the 10th, 1873, which was in force at the rendition of the judgment. In the absence of anything showing the contrary, it will be presumed that the original claim on which the judgment was rendered, accrued after the reorganization of the company in 1875.”

It is not alleged in the complaint that the contemplated work of the original corporation, organized in 1868, did not exceed sixteen miles in length. It must, therefore, be held to have ceased to exist as a corporation from the time the act of the 14th of December, 1872, took effect. Cooper v. Arctic Ditchers, 56 Ind. 233.

It appears from the complaint that the Kankakee Valley Draining Company continued to do business after the act of 1872 took effect, as it had before. It is alleged in the complaint that the appellees organized themselves as a corporation under the act of March the 10th, 1873, by the name of the original company. It is this new corporation for which, the appellant claims, the services of McCullom were rendered, and its members, the appellant insists, are liable to pay the judgment mentioned in the complaint.

Assuming that the organization of the appellees as a corporation under the act of 1873 is sufficiently averred in the complaint, they would be liable, as members of the corporation, only for such debts as had been contracted by that corporation. It is nowhere alleged in the complaint that the services of McCullom were rendered for the new corporation. The inference, from the facts stated is, that the services for which the judgment was obtained, were rendered for the old company. McCullom recovered $2,553.16 forservices as secretary of the company. The act of 1873 provides for the election of a clerk. The judgment at most could only have included the value of services rendered by McCullom for the new company between the 17th of May, 1873, the time it was organized, and the last of November, 1873, the time of the commencement of his suit.

[311]*311But it is urged that the judgment in favor of McCullom is, if not conclusive, prima facie evidence of a debt contracted by the new company — that it is a debt itself within the meaning of the 26th section of the act of 1873, upon which the appellees are liable, and by which they are bound. The 26th section of the act is as follows:

“ The members of every such association shall be individually liable for all debts contracted by, and all damages assessed and accrued against the association during their membership.”

This imposes upon the members of such a corporation, as individuals, not as corporators, an absolute, primary obligation to pay all debts contracted by the company of which they are members. Their liability is created by the statute, and is distinct from any obligation which they, as corporators, owe to the corporation or its creditors. The corporation has nothing to do with this liability, nor has it the right or the power to represent its members as to this individual obligation. It is a matter between the creditors of the corporation and its members, not as corporators, but as individuals.

In the case of Allen v. Sewall, 2 Wend. 327, Savage, C. J., says: “Individual liability in the act must be understood in contradistinction to corporate liability, and the defendants must therefore be held responsible to the same extent, and in the same manner as if there was no act of incorporation. The plaintiffs undoubtedly might have sued the corporation, but they had their election under the 6th section of the act to consider the association an unincorporated copartnership.

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Bluebook (online)
82 Ind. 307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trippe-v-huncheon-ind-1882.