Gridley v. Jameson

• Decision Date: 30 June 1882
• Citation: 103 Ill. 211,1882 WL 10309
• Parties: ASAHEL GRIDLEYv.ALFRED S. BARNES et al.THOMAS J. COXv.JOHN A. JAMESON.
• Court: Illinois Supreme Court

103 Ill. 211

1882 WL 10309 (Ill.)

ASAHEL GRIDLEY

v.ALFRED S. BARNES et al.THOMAS J. COX

v.JOHN A. JAMESON.

Supreme Court of Illinois.

Filed at Springfield Mar. 28, 1882.Rehearing denied June Term, 1882.

OPINION TEXT STARTS HERE

APPEALS from the Appellate Court for the Third District;--heard in that court on appeals from the Circuit Court of McLean county; the Hon. OWEN T. REEVES, Judge, presiding.

Messrs. WILLIAMS, BURR & CAPEN, Mr. IRA J. BLOOMFIELD, and Messrs. WELDON & MCNULTA, for the appellants:

The Lamar Insurance Company having been in existence and doing business before the general Insurance law of 1869 was passed, the 16th section of that act can only be held applicable to a shareholder as a penalty for permitting the corporation to continue to do business, after the passage of that act, in contravention of its terms. Weidenger v. Spruance, 101 Ill. 287; Diversy v. Smith, 9 Bradw. 437; Gulliver v. Roelle, 100 Ill. 141; Cable v. McCune, 26 Mo. 380; Halsey v. McLean, 12 Allen, 438; Merchants' Bank v. Bliss, 35 N. Y. 412; Steam Engine Co. v. Hubbard, 101 U. S. 108; Thompson's Liability of Stockholders, sec. 84; Sedgwick on Construction of Stat. and Const. Law, 32.

All actions for penalties are barred in two years. Rev. Stat. 1874, p. 675, sec. 14.

That the cause of action under section 16 of the general Insurance law, and that under section 25 of the company's charter, are different, one being on a contract and the other on a penalty, and are barred by different statutes of limitations, see Corning v. McCullough, 1 Comst. 47.

The Statute of Limitations continues to run against a new cause of action set up by way of an additional count, until such count is filed. Illinois Central R. R. Co. v. Cobb, 64 Ill. 128; Illinois Central R. R. Co. v. Phelps, 94 Id. 548; Showkegan Bank v. Cutler, 49 Maine, 319; German v. Judge, 27 Mich. 139; Hawthorn v. State, 57 Ind. 286.

Mr. HAMILTON SPENCER, and Mr. W. S. COY, for the appellees:

We make no question as to the limitation in respect to statutory penalties. We are suing for no such penalty. The stockholder's liability is original, and is created by section 25 of the charter. The declaration was not framed upon section 16 of the general Insurance law.

Mr. JUSTICE SCHOLFIELD delivered the opinion of the Court:

In these cases actions of debt were brought by the plaintiffs, against the defendants, as stockholders of the Lamar Insurance Company, to recover certain specified indebtedness of that company to the plaintiffs, respectively. So far as the questions to be considered are concerned, there is no substantial difference between the cases. In both, the causes of action accrued more than two years before the bringing of suit, and under the stipulations of the parties the defence of limitation is properly before the court.

If we shall regard the liability of the defendants as resting on the 16th section of the general law in relation to insurance, which was approved March 11, 1869, and in force July 1, of that year, the causes of action are, as we think, clearly covered by the 14th section of the Statute of Limitations. Rev. Stat. 1874, p. 675. The 16th section of the general law in relation to insurance imposes a liability on the trustees and corporators of insurance companies, severally, for all debts or responsibilities of such companies, to the amount by him or them subscribed, until the whole amount of the capital of such company shall have been paid in, and a certificate thereof recorded, as provided in that act. In Weidenger v. Spruance, 101 Ill. 287, we held this liability upon the stockholders is imposed by way of penalty only; and the 14th section of the Statute of Limitations provides: “Actions for * * * a statutory penalty * * * shall be commenced within two years next after the cause of action accrued.”

But counsel for the plaintiffs deny this suit is brought for a penalty, and say that it is brought under the 25th section of the charter of the Lamar Insurance Company. That section is as follows: “That no stockholder of the corporation hereby created shall be liable, in his individual capacity, for any debt or liability of said company beyond the amount of stock held by him, and it is hereby provided, that if the corporation hereby contemplated is not fully organized, according to the provisions hereof, within one year from and after the passage of this act, then this act shall be void.” This plainly prevents the individual liability of the shareholder exceeding the amount of stock held by him, but it is quite as plain that it does not fix his liability to that amount. It certainly contemplates that he may be made liable to that amount, but there is no attempt by this section to fix any liability whatever. The entire section is one of limitation or restriction only. A fair construction, undoubtedly, is, the stockholder may be made liable (not that he thereby is) to the amount indicated, and so he could not claim that a subsequent law fixing his liability to that amount, and prescribing a mode of enforcing it, impaired the obligation of his contract; and this was the view that obtained with the court in Arenz v. Weir, 89 Ill. 25.

But counsel contend that case is an authority for holding that this section imposes an absolute individual liability upon the stockholder, to the extent of the stock held by him, for any debt or liability of the company, and there is, unquestionably, language in the opinion in that case that, considered by itself, authorizes this view. But the language of the opinion must be considered with reference to the question under discussion. The question whether that section imposed such liability, was not before the court. The question was, whether the declaration was sufficient on demurrer, and it stated what was held to be a sufficient cause of action under the 16th section of the general law in relation to insurance. It was, on behalf of the stockholder, contended, that to apply the 16th section of the general Insurance law to him, was to impair the obligation of his contract on becoming a stockholder; and in answer to this, the 25th section of the charter, ...