Murphy v. Wheatley
| Decision Date | 17 January 1905 |
| Citation | 59 A. 704,100 Md. 358 |
| Parties | MURPHY v. WHEATLEY et al. |
| Court | Maryland Court of Appeals |
Appeal from Circuit Court No. 2 of Baltimore City; George M. Sharp Judge.
Suit by John A. Murphy against William F. Wheatley and others. From a decree for defendants, plaintiff appeals. Reversed.
Augustus C. Binswanger and William Reynolds, for appellant.
Vernon Cook, for appellee Miners' & Merchants' Bank of Lonaconing.
Arthur W. Machen, Jr., for appellee Jenkins. L.J. Cohen and M.R Walter, for appellees Maynadier et al.
This is an appeal from a decree of circuit court No. 2 of Baltimore City sustaining a demurrer to an amended bill filed on behalf of the creditors of the City Trust & Banking Company against its stockholders to enforce their statutory liability for its debts. The original bill is not in the record, but it appears that it was filed on June 17, 1903, and was demurred to, and the demurrer was sustained. On September 17th an amended bill was filed, which alleges that the trust company had theretofore been adjudged insolvent and dissolved and a receiver of its affairs appointed by the said circuit court in another case; that the present suit had been brought on behalf of all the creditors, and that a number of creditors had come into the case by petition, and had been made coplaintiffs by order of court; that the plaintiff is a creditor of the trust company for money deposited therein to the extent of $1,000; and that the defendants are stockholders thereof, and that they became such in the number of shares and as of the dates set forth in a schedule already on file as an exhibit in the case, and that the plaintiff became a creditor at the time when the defendants were stockholders. It further alleges that each stockholder is liable to the creditors of the company for its debts to an amount equal to twice the par value of his stock, under section 85l, art. 23, Code Pub.Gen.Laws (Laws 1892, p. 156 c. 109), to which, the bill avers, the special chartered rights of the company are made liable by the terms of Act 1896, p. 628, c. 344, by which it was incorporated. It is also alleged that a number of creditors, whose names are given, had, since the filing of the original bill in the present case, instituted separate actions at law in the several courts in Baltimore City against sundry individual stockholders, including some of the defendants to this suit, to enforce their liability for the corporate debts for the exclusive benefit of the said respective creditors. The bill then asserts that the plaintiffs are entitled, in order to avoid a multiplicity of suits, to have the further prosecution of the suits at law enjoined, and the rights of all of the creditors against the defendant stockholders determined and enforced according to equitable principles in the present case. The prayer of the bill is for an injunction to prevent the maintenance of the suits at law, for a decree requiring the defendants to pay, to the extent of their respective liability, the sums due by the trust company to the several plaintiffs, and for general relief.
It is apparent from the terms of the charter of the company, a copy of which is filed as an exhibit with the bill, that it answers to the description contained in the first section of Act 1892, p. 153, c. 109, of the corporations to which the provisions of that act are intended to apply. The charter definitely authorizes the company to do a safe deposit, trust, guaranty, loan and fidelity business.
A number of the defendants demurred to the bill, assigning as grounds of demurrer: (1) That the bill did not disclose a good case; (2) that the court had no jurisdiction to grant the relief prayed for in the bill; (3) that the bill was multifarious; (4) that the plaintiffs had an adequate remedy at law. The circuit court, by the decree from which this appeal was taken, sustained the demurrers and dismissed the bill. No opinion was filed in the case by the learned judge below, nor does the decree disclose the grounds upon which he sustained the demurrer, and we will therefore examine the several causes of demurrer assigned in the pleadings.
The first question which presents itself for our consideration is whether there exists any liability on the part of the stockholders of the City Trust & Banking Company to its creditors. In the view of the draftsman of the bill the expression found in the fourteenth section of the company's charter, "the said corporation shall be subject at all times to the provisions of the act of eighteen hundred and ninety-two, chapter one hundred and nine," imposed upon its stockholders such a liability. On the other hand, it was strongly contended in the argument of the case on the appeal that, the expression thus quoted from the company's charter being neither ambiguous nor obscure in its terms, and not mentioning stockholders or their obligations, it must be interpreted according to the usual meaning of the language used in it, and be held to have been intended only to subject the corporation to those provisions of the act of 1892 which relate to corporations, and not to impose any obligations upon the stockholders as individuals. We do not deem it necessary to pass upon that contention, because we are of the opinion that section 85l, art. 23, Code Pub.Gen.Laws (Laws 1892, p. 156, c. 109), ex proprio vigore, and independently of any reference to it in the charter of the City Trust Company, imposes upon the stockholders of that corporation the liability to which it refers. It provides that "each stockholder shall be liable to the depositors and creditors of any such corporation for double the amount of stock at the par value held by such stockholder in such corporation." The pivotal question in the interpretation of this section is to what antecedent does the word "such," used in qualifying the word "corporation," refer? As the section formed part of Act 1892, p. 153, c. 109, we properly look to the previous sections of that act for an answer to the question. Now, in every section of that act preceding the one under consideration the same expression "such corporation" is uniformly used until the first section, which is section 85a in the Code (Laws 1892, p. 153, c. 109), is reached, where we find the corporations to which the act refers described as "every safe deposit, trust, guaranty, loan and fidelity company or association incorporated under any law of this state or any other state, district or territory of the United States or any foreign country" doing business in this state. Certainly the most natural and rational interpretation 85l is to hold that its provisions were intended to apply to all corporations of the classes enumerated in section 85a, which would include within its operation the City Trust & Banking Company.
The comprehensive expression used in section 85a "incorporated under any law of this state," must have been intended to include both general laws and special laws. Throughout article 23 of the Code, when its provisions are intended to apply only to corporations created under general law, they are appropriately described as corporations "formed under this article," or "under the provisions of this article," or "under the general laws of this state"; and when the provisions are intended to apply to corporations "formed under any special law of this state" they are so described. It inevitably follows that when, as in the present case, the law in terms applies to every corporation of a specified kind "incorporated under any law of this state," it was intended to embrace all corporations of that kind formed under either general or special laws. The declared purpose of the act of 1892 was to add certain sections to article 23 of the Code, which is the general corporation law of this state, enacted in obedience to a constitutional mandate, and therefore its various provisions must be given full force and effect as part of that law. In Cleaveland v. Mullin, 96 Md. 603, 54 A. 665, we held that the Atlantic Trust & Deposit Company, incorporated under a special act of assembly, was subject to the operation of section 88f of article 81 of the Code (Laws 1894, p. 149, c. 114), which requires "every corporation incorporated under any general or special law of this...
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