Leighton v. Campbell

• Citation: 17 R.I. 51,20 A. 14
• Parties: LEIGHTON v. CAMPBELL et al.
• Decision Date: 17 May 1890
• Court: United States State Supreme Court of Rhode Island

20 A. 14

17 R.I. 51

LEIGHTON

v. CAMPBELL et al.

Supreme Court of Rhode Island.

May 17, 1890.

On demurrer to declaration.

Action of trespass on the case by Robert R. Leighton against John P. Campbell et al.

Edwin D. McGuinness and John Doran, for plaintiff. Joseph V. Ely and Rathbone Gardner, for defendants.

DURFEE, C. J. This is an action of trespass on the case, brought by the plaintiff against the defendants as directors of the Cranston Bleaching, Dyeing & Printing Company, a corporation created by the general assembly, and also against two of them as president and treasurer, respectively, of said company, to subject said defendants to the payment of a judgment recovered against the company by the plaintiff, in an action of trespass on the case, for damages for injuries received by him in consequence of its negligence. The declaration contains seven counts, of which five are designed to charge the defendants under Pub. St. R. I. c. 155, §§ 2, 3, one to charge them under section 4, and the remaining one to charge them under section 15. Said section 2 makes it the duty of the president and directors, with the treasurer and clerk, within 10 days after the last installment of the corporate stock has been paid in, to make a certificate, stating its amount, signed and sworn to by the president, treasurer, and clerk, and by a majority of the directors, and lodge it to be recorded in the office of the town clerk of the town where the corporation is established; and in case of an increase to do likewise in regard to the amount added and paid in. Said section 3 provides that, if any of said officers shall refuse or neglect to perform said duties, "they shall be jointly and severally liable for all debts of the company contracted after said ten days, and before such certificate is recorded." The declaration in the five counts first mentioned alleges a neglect on the part of the defendants to perform the duties imposed by said section 2, and seeks to charge them, on account of such neglect, under said section 3. The defendants demur to the declaration, and contend that they are not liable under said sections 2 and 3, because said sections make them liable only for the debts of the company contracted after said 10 days, and not for the company's torts. The plaintiff contends—First, that said section 3 should be construed to include demands ex delicto as well as ex contractu; and, second, that his demand, though it was originally a claim in tort for damages, has become a debt by having been reduced to a judgment, and that, being a debt, it is recoverable, under said section 3, from the defendants.

The plaintiff cites in support of his contention, Mill-Dam Foundery v. Hovey, 21 Pick. 417, 455, and Carver v. Manufacturing Co., 2 Story, 432. These cases relate to the liability of corporators under a Massachusetts statute subjecting them to individual liability for the "debts and contracts" of the corporation, or for the "debts contracted" by it, and not to the liability of officers of corporations under other provisions. In the first case it was held that the phrase covered a claim for unliquidated damages arising ex contractu. In the second it was held that the phrase "debts contracted," being broadly construed, covered a liability incurred by the infringement of a patent, or, in other words, a liability for tort. Judge STORY, in giving this construction, relied somewhat on the authority of Mill-Dam Foundery v. Hovey, but still more on his view that the provision imposing the liability was to be regarded as remedial, and was therefore to be liberally construed; in fact, virtually conceding that in any other view the construction would be too broad. In Child v. Iron-Works, 137 Mass. 516, the court say, in criticism of Carver v. Manufacturing Co.: "There are no cases decided by the courts of the commonwealth in which a stockholder has been held liable for a tort of the corporation, and the decision of Mr. Justice STORY stands unsupported by any direct authority, either before or since." There are cases in other states in which it has been held that the words "debts contracted" do not subject the corporators to liabilities for the torts of the corporation. Heacock v. Sherman, 14 Wend. 58; Bohn v. Brown, 33 Mich. 257; Cable v. McCune, 26 Mo. 371. In the case at bar, however, the question relates not to the corporators, but to officers, under provisions relating to them exclusively as such, imposing duties on them, and making them liable in case they neglect or refuse to perform them. These provisions, as contradistinguished from the provisions in regard to corporators, are deemed to be penal, and for that reason to be strictly construed. Chase v. Curtis, 113 U. S. 452, 5 Sup. Ct. Rep. 554. We do not think that any court would hold that the words "debts contracted," if strictly construed, would include unliquidated claims for damages arising ex delicto. Child v. Iron-Works, supra.

We pass to the plaintiff's second contention, which is that the...