Wood v. Harrison

50 Ind. 480
CourtIndiana Supreme Court
DecidedNovember 15, 1875
StatusPublished
Cited by8 cases

This text of 50 Ind. 480 (Wood v. Harrison) 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
Wood v. Harrison, 50 Ind. 480 (Ind. 1875).

Opinion

Downey, J.

This was an action by the appellees, creditors, against the appellant, as a stockholder, of a private corporation known as the Indianapolis Chair Factory.

The complaint, which is in one paragraph, sets forth the organization of that corporation in 1870, under the act for the organization of manufacturing and mining companies, approved May 20th, 1852; that it was organized for the purpose of manufacturing chairs, and was not a banking or road corporation;-that defendant, by subscription, became the owner of four hundred shares of its stock, of fifty dollars each, being in all twenty thousand dollars, and was made a director of said corporation; that while defendant owned said twenty thousand dollars of stock, and was a director of the company, the plaintiffs loaned the corporation money, which, to the amount of several thousand dollars, remains unpaid; that in December, 1870, the company was adjudged a bankrupt; that plaintiffs have proved their debt in bankruptcy; which was allowed at six thousand dollars, and have received, as their pro rata share of the assets of the corporation, two thousand dollars, and the remainder is- wholly unpaid.

To this complaint a demurrer was filed and overruled, and the defendant excepted.

An answer was then filed in four paragraphs ; first, general denial; the second, no question is made upon; the third, as afterward amended, is a plea in abatement, setting up the pendency of bankrupt proceedings, alleging that the indebtedness of the defendant to the corporation or its creditors, if any, vested as assets in the assignee, and that he, therefore, and not the plaintiff, is the proper party to bring suit; and the fourth, as to the note of fifteen hundred dollars, being a part of the debt sued for, sets up that at the time the .debt represented by that note was contracted, there were other stockolders of [482]*482said company, naming them, who, at the time of the answer, were still living, and ought to be made defendants.

To the amended third and the fourth paragraphs, demurrers were sustained, and the defendant excepted.

A reply of general denial being filed to the second paragraph of the answer, a trial was had, resulting in a finding for plaintiffs; a motion for a new trial overruled, exception by defendant, bill of exceptions duly filed, judgment for plaintiffs, appeal to general term, judgment affirmed, and appeal to this court.

The error assigned here brings in question the correctness of the decision of the superior court at general term. We are favored not only with elaborate arguments in the briefs of counsel in the cause, but also with able and exhaustive briefs from counsel not engaged in the cause, but whose clients are parties to other cases, in which .the main question for decision here is involved..

We shall examine the question as to the sufficiency of the complaint. The sixth and fourteenth sections of article 11 of the constitution of the State are supposed to have a bearing upon the question to be deoided. They are as follows :

“ Sec. 6. The stockholders in every bank or banking company shall be individually responsible, to an amount over and above their stock, equal to their respective shares of stock, for all debts or liabilities of said bank or banking company.

“Sec. 14. Dues from corporations other than banking shall be secured by such individual liability of the corporators, or other means, as may be prescribed by law.”

The first General Assembly that met after the adoption of the present constitution enacted a law for the incorporation of manufacturing companies, which was -approved May 20th, 1852, and which contained the following section :

“Sec. 11. The stockholders of such company shall be individually liable, jointly and severally, for all debts due and owing laborers, servants and apprentices, for services rendered; and, to other creditors of the company, they shall be liable to an [483]*483amount equal to the stock held by them respectively.” 1 G. & H. 427. .

In 1859, the General Assembly passed the, following act:

“Section 1. The dues from all private corporations which have been or may be organized under the general laws and under the present constitution of'this State, other than banking and road corporations, and other than those where security has already been provided, shall be secured in the manner hereinafter provided.

“Sec. 2. The stockholders and members of such corporations shall be individually liable for its debts to an amount equal to the interest or stock which they may respectively have therein, and the privileges or immunities which have been heretofore granted to such corporations, shall, upon the same terms, equally belong to all citizens who may desire to incorporate themselves for the same purposes, subject to the individual liability aforesaid.”. Acts 1859, p. 58, 1 G. &H. 276.

On the 4th day of March, 1863, the legislature passed an act by which, among other things, the eleventh section of the act of May 20th, 1852, was repealed. Acts 1863, p. 48.

The Indianapolis Chair Factory, having become a corporation in 1870, and the indebtedness, for which it is sought to make the appellant liable, having accrued at a still later date, it is evident that the act of May 20th, 1852, cannot make the defendant liable.

The question is this, is the defendant liable under and by virtue of the act of 1859, above quoted ? That act does not extend to all private corporations. There are three classes of private corporations to which it does not extend. They are : 1. Banking corporations. 2. Road corporations; and, 3. Those where security had already been provided.

The eleventh section of the dct of 1852 was still in force when the act of 1859 was enacted, and in order to ascertain what corporations are embraced in the third class mentioned in the act of 1859, we must look to that date, and cannot look to some subsequent date. The language is, “other than those where security has already been provided,” etc. “Has been [484]*484provided,” refers to a time which had already passed, when the act of 1859 was enacted. Security had been provided by the act of 1852, so far as corporations for manufacturing were concerned, and hence corporations of that class were excluded from the operation of the act of 1859 as effectually as if they had been excluded by naming them.

Counsel for appellee argue the case as if the third class did not embrace all manufacturing corporations, but only such of them as were organized prior to the passage of the act of 1859. This, in our judgment, is a mistake. "We think the whole class was excluded from the operation of the act of 1859 by plain and unmistakable language.

Counsel on both sides argue the question whether there still remained in the act of 1852, by provisions in other than the eleventh section, security for the dues of manufacturing corporations after the repeal of that section. But we regard this consideration as wholly immaterial. It seems to us too plain to admit of doubt that the repeal in 1863 of the eleventh section of the act of 1852 could not have the effect to make the act of 1859 extend to and embrace a class of corporations expressly excluded by the language of the act. It is not material in this case whether, after the repeal of section 11, there was any law securing the dues of any of the classes of corporations excluded from the operation of the act of 1859 or not.

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Bluebook (online)
50 Ind. 480, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wood-v-harrison-ind-1875.