Jennings v. Dark
| Citation | 92 N.E. 778,175 Ind. 332 |
| Decision Date | 28 October 1910 |
| Docket Number | 21,557 |
| Parties | Jennings v. Dark et al |
| Court | Supreme Court of Indiana |
Rehearing Denied March 14, 1911.
From Hendricks Circuit Court; James L. Clark, Judge.
Action by Harry E. Jennings against Charles E. Dark and others. From a judgment for defendants, plaintiff appeals.
Affirmed.
William J. Whinery, Edgar M. Blessing and Pickens, Cox & Kahn for appellant.
Howe & Batchelor, Jameson & Hay and James P. Baker, for appellees.
Appellant 's complaint is in four paragraphs. The first two are grounded upon a claim of statutory liability as stockholders in an insurance corporation, claimed to have been organized under the act of January 14, 1850 (Local Laws 1850 p. 30) as amended February 22, 1893 (Acts 1893 p. 133); the last two, upon a liability as copartners in an association of persons claiming to be incorporated, wherein actual incorporation was not effected; and hence a liability is claimed as of a copartnership. Demurrers were sustained to the first, third and fourth paragraphs, and overruled as to the second, upon which a trial was had, a special finding of facts made, conclusions of law stated, and judgment rendered for appellees.
Errors are here urged on the ruling on the demurrers to the first, third and fourth paragraphs of the complaint, upon exceptions to the conclusions of law, and in overruling the motion for a new trial.
The facts found show the enactment of the statute of 1850, supra, and that in 1891 defendant McGilliard, for a valuable consideration, purchased and took an assignment from one McCulloch, a son and heir of Hugh McCulloch, who was one of the grantees in said charter, of whatever interest said McCulloch might then have in said charter as a son and heir of said Hugh McCulloch; that McGilliard had no knowledge of any of the other parties named in said charter, or of their heirs or assigns, and at the time no corporation was in existence, or doing business under said charter, nor had any corporation prior to that time transacted any business under said charter; that McGilliard and a number of other persons attempted to organize a corporation for the purpose of doing an insurance business under said charter, by virtue of the authority and rights obtained through said assignment, and established themselves as an insurance company, under the style of "The Indiana Insurance Company of Fort Wayne," with general offices in Fort Wayne, Indiana, and carried on a general insurance business throughout this State and other states, issuing policies of insurance, establishing agencies, electing boards of directors, and officers, such as president, secretary and treasurer, and continued such business as a corporation under said name until February 22, 1893, when the parties in interest procured the passage of said act of 1893, changing the name to "Fort Wayne Insurance Company"; that in 1899 the Fort Wayne Insurance Company became insolvent, and a receiver was appointed by the Lake Superior Court, in which court an order was made directing the sale, by the receiver, of the assets, books and charter of said so-called corporation, under which order the receiver did sell, or attempt to sell, and said McGilliard and others purchased, or attempted to purchase, the assets, books and charter, and the sale was approved by the court, and the charter was assigned, or attempted to be assigned, to said McGilliard and others, free from any claims or liens of the creditors or stockholders of the Fort Wayne Insurance Company; that in June or July, 1901, said McGilliard, Charles E. Dark, W. W. Dark, Edward E. Dark, Wilmer Christian and David Cline attempted, by virtue of the authority and rights held by them through said purchase, to organize an insurance company under the name of the Equitable Insurance Company of Indiana, with its principal office in the city of Indianapolis, Indiana; that said McGilliard was a stockholder in said Fort Wayne Insurance Company, but none of the other persons named as the organizers of the Equitable Insurance Company held stock in the Fort Wayne Insurance Company; that McGilliard in his participation in the attempted organization of the Equitable Insurance Company did not represent, or pretend to represent, the capital stock held by him in the Fort Wayne company; that said persons at their meeting for the purpose of organizing the Equitable Insurance Company, and in their records of said meeting, denominated themselves the stockholders of the Fort Wayne Insurance Company, and by resolution changed the name to the Equitable Insurance Company of Indiana, changed the location of the home office from Fort Wayne to Indianapolis, retained the stock at $ 200,000, with $ 100,000 only of the stock issued, and accepted, or attempted to accept, the provisions of the act of March 6, 1883 (Acts 1883 p. 135, §§ 4072-4078 Burns 1908), respecting corporations created and existing at and before November 1, 1851, and filed a copy of the resolution in the office of the Secretary of State, who issued a certificate of the fact; that said so-called Equitable Insurance Company of Indiana issued common stock, elected officers, and conducted a general insurance business from its general offices in the city of Indianapolis until the appointment of a receiver; that the stock certificates recited that the company was incorporated under the laws of the State as the Equitable Insurance Company of Indiana, with a capital stock of $ 200,000, divided into shares of $ 100 each, subject to the terms of the charter of the company, and were in the usual form, signed by the president, and attested by the secretary; that by an agreement of the stockholders an issue of $ 25,000 of preferred stock was authorized, and part of the issue sold; that these certificates recited that the company was organized under the laws of the State of Indiana, and that the shares of preferred stock--$ 100 each--were nonassessable and nontaxable; that the company guaranteed to redeem them in five years, and to pay semiannually a cash dividend of eight per cent per annum, on January 1 and July 1, with the right to cancel at the end of one year, or any interest-maturing date; that these certificates were signed by the president and attested by the secretary; that no record was made of the action of the stockholders authorizing the issue of the preferred stock; that defendant McGilliard was the owner of twenty-five shares and Hackedorn and Wagner each owned one share of common stock, that Charles E. Dark owned twenty-two shares, McGilliard, seven shares, Hackedorn, ten shares, Christian, five shares, McGilliard and Charles E. Dark as partners, eight shares, W. W. Dark, one share, Jameson, five shares, Wilson, one share, Tarlton, five shares, E. R. Owen, one share, B. F. Owen, ten shares, Holman, ten shares, White, one share, Edward H. Dark, one share, W. W. Dark and Edward H. Dark as partners, one share of the preferred stock; that Wagner and Hackedorn owned their preferred stock from July 14, 1902, to July 1, 1903, Christian, Jameson, Wilson, Tarlton, E. R. Owen, B. F. Owen, White and McGilliard owned their preferred stock on April 1, 1903, and have owned it ever since; that Charles E. Dark, W. W. Dark, and Edward H. Dark surrendered their preferred stock in July, 1902, and it was canceled on the company's books; that they were paid the par value thereof; that all the common stock, except that held by Wagner and Hackedorn from July 14, 1902, to April 2, 1903, was sold, assigned and transferred on the books of the company on or before July 14, 1902; that Tarlton, Jameson, E. R. Owen, B. F. Owen, White and Wilson in noway participated in the business, management, or the meetings of directors or stockholders, but received one or two dividends on their stock; that the defendant McLain at no time held any stock in his own right, but for a time held five shares of the preferred stock of McGilliard, as collateral to a loan that had been paid, but McLain has the custody of the stock.
The facts are found as to the ownership in plaintiff of the property insured, the issuance of the policy April 4, 1903, the loss by fire May 15, 1903, and a loss to plaintiff of $ 500, the appointment of a receiver in the Lake Superior Court, July 15, 1903, of the assets of the Equitable Insurance Company of Indiana as an insolvent corporation; that on July 3, 1906, plaintiff filed his claim for damages in the receivership proceedings, and the claim was allowed; that there were no assets at any time in the hands of the receiver out of which the claim could be paid; that no attempt was at any time made by the parties interested to incorporate under the general laws for the incorporation of insurance companies, other than as has been shown; that the seal was impressed as "The Equitable Insurance Company of Indiana, Chartered January 14, 1850."
Charles E. Dark died since the commencement of the suit, and W. W. Dark, as administrator of his estate, was substituted in his stead. Defendants Christian, Charles E. Dark, W. W. Dark, Edward E. Dark, McGilliard, Hackedorn, Holman and Wagner participated in the meetings of the stockholders and were elected officers, such as president, secretary, assistant secretary, and directors in the company, prior to the dates when they sold their common stock, and each received dividends upon the preferred stock held by him.
Upon these facts the court concluded that plaintiff was not entitled to recover against any defendant.
In determining whether the sustaining of the demurrers to the first, third and fourth paragraphs of complaint was harmful to appellant, we may look to the finding of facts, and in so doing we discover that it covers the entire subject-matter of each paragraph, which...
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