Gulliver v. Roelle

• Decision Date: 30 September 1881
• Parties: MARGARETHA E. GULLIVERv.JOSEPH ROELLE.
• Court: Illinois Supreme Court

100 Ill. 141

1881 WL 10601 (Ill.)

MARGARETHA E. GULLIVER

v.JOSEPH ROELLE.

Supreme Court of Illinois.

Filed at Ottawa Mar. 18, 1881.Rehearing denied September Term, 1881.

OPINION TEXT STARTS HERE

APPEAL from the Superior Court of Cook county; the Hon. JOSEPH E. GARY, Judge, presiding.

Messrs. SHUFELDT & WESTOVER, for the appellant:

1. The legislature had the right, under the constitution, to make the provisions of the general law of March, 1869, applicable to all insurance companies theretofore organized and transacting business in this State. Constitution of 1848, art. 10.

2. Independent of the foregoing proposition, in the case at bar, the accepted amendment to the charter of the company expressly stipulating that the company should be subject to any general law thereafter passed on the subject of insurance companies, brings the company fully under all the provisions of the general law of March, 1869. McLaren v. Pennington, 1 Paige Ch. 102; Miller v. The State, 15 Wall. 478; Tomlinson v. Jessup, Id. 454; Suydam v. Moore, 8 Barb. 358; In re Reciprocity Bank, 22 N. Y. 9; Sherman v. Smith, 1 Black, 587; In re Oliver Lee's Bank, 21 N. Y. 9; Stanley v. Stanley, 26 Me. 191; Butler v. Walker, 80 Ill. 345.

3. The liability upon the appellee, a stockholder, under section sixteen of the law of March, 1869, is to the creditors of the corporation personally, and is no part of the company's assets. Paine v. Stewart, 33 Conn. 516; Bank of Poughkeepsie v. Ibbotson, 24 Wend. 473; Moss v. McCullough, 7 Barb. 279; Harger v. McCullough, 2 Denio, 119; Burr v. Wilcox, 22 N. Y. 551; Dutcher v. Central Nat. Bank, 11 Nat. B. Reg. 457; Culver v. Third Nat. Bank, 64 Ill. 529. 4. The appellant, a creditor of the company, has an action at law against appellee, a stockholder, for the amount of appellant's claim against the company, limited by the amount of appellee's liability, to-wit, an amount equal to his stock. Culver v. Third Nat. Bank, 64 Ill. 529; Paine v. Stewart, 33 Conn. 516; Stanley v. Stanley, 26 Me. 191; Burr v. Wilcox, 22 N. Y. 551; Spear v. Crawford, 14 Wend. 20; Garrison v. Howe, 17 N. Y. 458; Adkins v. Thornton, 19 Geo. 325; Bank of Poughkeepsie v. Ibbotson, 24 Wend. 473; Lowery v. Inman, 46 N. Y. 119; Harger v. McCullough, 2 Denio, 119; Judson v. Rossie Galena Co. 9 Paige, 597.

5. The case of Butler v. Walker, 80 Ill. 345, is nearly parallel with the case at bar, and unless overruled is decisive of this.

Messrs. HOYNE, HORTON & HOYNE, for the appellee:

Section 19 of the general Insurance law of 1869, makes an express exception with respect to the capital stock and the investment and assets of companies that were already organized under special charters.

Capital stock is the sum divided into shares which is raised by mutual subscription of the members of a corporation, and upon which calls may be made. Bouv. Law Dic. 240; Angell & Ames on Corp. secs. 556, 517; 1 Sandf. Ch. 280; 28 Barb. 318; 4 Zeb. 195.

There is another very important exception made by section 19, that companies already organized under special charters “shall also be entitled to all the powers and privileges granted by said charters.” This clearly manifests an intention to save to all such companies all the powers and privileges they had before, without limitation or restriction.

We cite a few authorities on the principle, well recognized in the construction of all statutes, that the courts will not so construe them as to affect vested rights, or give them a retroactive effect. Dash v. Van Vleeck, 7 Johns. 477; Van Valkenbergh v. Torrey, 7 Conn. 252; Sayre v. Kisner, 8 Ward, 661.

A statute will not be construed to be retroactive if all its language will bear a prospective construction. An intent to violate the constitution will not be assumed. New York and Oswego Midland Railroad Co. v. Van Horn, 57 N. Y. 473.

This court has repeatedly had occasion to decide, that as a general rule a statute is to operate in future only, and is not to be construed so as to affect past transactions. A retrospective effect will not be given, unless it clearly appears such was the will of the legislature, especially where it tends to produce injustice or inconvenience. Thompson v. Alexander, 11 Ill. 55; Marsh v. Chestnut, 14 Id. 227; Bruce v. Schuyler, 4 Gilm. 221; Somerset v. Dighton, 12 Mass. 383.

Messrs. COOPER, PACKARD & GURLEY, also for the appellee:

The declaration sets out an indebtedness from the Germania Insurance Company to the plaintiff, and alleges that the defendant is liable for that indebtedness because he was a corporator of that company, all the stock of which was never paid in, etc. Neither the charter of the company nor any amendment thereto requires that the stock shall be fully paid in, or any certificate thereof recorded, and hence no liability is shown by the facts alleged.

To hold a stockholder for the debts of a corporation because the latter has not collected all the stock subscriptions from its other stock subscribers, recourse must be had to the charter creating it, or to some statute the effect of which is that of an amendment to such charter. Angell & Ames on Corp. (10th ed.) sec. 41; ibid. secs. 591, 595.

There was no individual liability for the debts of the Germania Insurance Company imposed upon its stockholders by the general Insurance law of 1869.

After declaring that the old companies, previously incorporated and doing business in this State, are brought under all the provisions of the law, the statute proceeds to make three exceptions, each one of which, we submit, is fatal to appellant's cause of action:

1st. That “their capitals may continue of the amounts and character named in and authorized by their respective charters during the existing terms of such charters.”

2d. That “the investments of the capital and assets of such companies may remain the same as prescribed by their charters, anything in this act to the contrary notwithstanding.”

3d. That “such companies shall also be entitled to all the privileges and powers granted by said charters.”

Conceding that by section 19 of the act of 1869 the Germania Insurance Company was brought under all the provisions of that act, yet it does not follow that its trustees and corporators are liable for its debts, as prescribed by section 16.

In Hawthorne v. Calef, 2 Wall. 10, the repeal of a law making subscribers of a corporation liable for its debts after a debt was contracted, was held unconstitutional.

Upon this point, see further: Cunan v. State of Arkansas, 15 How. 304; Green v. Biddle, 8 Wheat. 1; Bronson v. Kinzie, 1 How. 311; McCracken v. Haywood, 2 Id. 608; Woodruff v. Trapnal, 10 Id. 190; Slee v. Bloom, 19 Johns. 456; Wheeler v. Frontier Bank, 23 Me. 308; Ireland v. Palestine Co. 19 Ohio St. 369; Enfield Toll Bridge Co. v. Conn. River, 7 Conn. 44.

Mr. JUSTICE WALKER delivered the opinion of the Court:

The questions presented by this record have been before us on previous occasions, but we do not content ourselves by saying stare decisis. More elaborate and thorough arguments have been made and filed than had been presented in the former cases, and new issues and questions have been raised and discussed. We have, therefore, owing to their importance, reviewed the grounds on which those decisions were based. In doing so, we have devoted more time to their investigation and discussion than is usual in deciding cases. No case in this court has, perhaps, ever received more thorough investigation. We will now proceed to announce some of our reasons and the conclusions reached.

The main question involved is, whether the 16th section of the general Insurance law imposes any liability on shareholders in companies organized under that act, and if so, does section 19 of the same act impose the same liability on shareholders in companies organized under special charters, and brought under the provisions of the general law? The 16th section reads: “The trustees and corporators of any company organized under this act shall be severally liable for all debts or responsibilities of such company, 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 hereinbefore provided.”

The true meaning of the words “trustees and corporators,” as used in this section, is the matter of dispute in this case. On one side it is claimed that the word “corporator” is used as and for a shareholder; whilst on the other it is denied that it has or was intended to have such a meaning, but is used as synonymous with commissioner or promoter in organizing the company. It can scarcely admit of a doubt that the general and popular meaning of the word ““corporator” concurs with the highest lexicographical authority,--that it means a member of a corporation; and all know that to be a member of a stock company a person must be a shareholder, or to be a member of a mutual company, a policyholder. This is so plain that the citation of authority is unnecessary. And there can be no doubt that such is the sense in which the term is used in the 2d section of article 10 of the constitution of 1848. That section provides: “Dues from corporations not possessing banking powers or privileges shall be secured by individual liabilities of the corporators, or other means, as may be provided by law.” It is impossible to suppose the body which framed this section ever supposed that holding the persons named in a charter for purposes of organization liable, would afford security to the creditors of these great bodies, transacting annually millions of dollars of business. That body could have intended nothing short of the liability of stockholders, or some other equivalent security. This being so, the constitutional requirement operates as an imperative command on the General Assembly, and being under that obligation, we must presume that body, in framing a general incorporation law, would endeavor to discharge the duty thus imposed. We can...