Ohio Ins. Co. v. Nunnemacher
| Decision Date | 11 December 1860 |
| Citation | 15 Ind. 294 |
| Parties | The Ohio Insurance Company v. Nunnemacher |
| Court | Indiana Supreme Court |
APPEAL from the Floyd Circuit Court.
The judgment is reversed, with costs. Cause remanded.
W. T Otto and J. S. Davis, for appellant.
(1.) By counsel for appellant: It is well settled, that where there has been a fraudulent breach of trust by the directors, the primary party to sue is the corporation, for she is the injured party, and the remedy is against the directors, who are individually and personally responsible. Robinson et al v. Smith, 3 Paige 222; Hodges v. New England Screw Company, 1 R.I. 312; Baylors v. Orne, 1 Freeman Ch. R. 174. The directors are as much responsible to their principal as the agents of an individual. 4 Denio 301; Cunningham v Pell, 5 Paige 607; Verplanck v. Mer. Ins. Co, 1 Edwards 84; Attorney General v. Wilcox, 1 Craig. & Phil 1; Nathan v. Whitlock, 3 Edwards 215. As the manner of the increase was left to the discretion of the directors, no other tribunal can supervise their action. The King v. Mayor of London, 3 Barn. & Adol. 271.
J. and A. B. Collins, for appellees
(2.) The authorities cited by appellee's counsel will be found in note to case as reported. 10 Ind. 234.
This case was before us in 1858, and decided upon rulings below, touching the evidence. The then judgment in the cause was reversed, and a new trial ordered. The facts are so fully stated in the opinion delivered on the former examination, and reported in 10 Ind. p. 234, that we shall not recapitulate them here.
The question which the record now presents for our determination is this: Had existing stockholders in the Ohio Insurance Company the legal right, on an increase of the capital stock of said company, under the charter, to take such increased stock, to the exclusion of all other persons? Nunnemacher holds the affirmative of this question and relies on Gray v. The Portland Bank, 3 Mass. 364, as authority for doing so. Whether that case was rightly decided on its own facts, we shall not inquire; but the decision in it, we have no hesitation in saying, can not be applied as a general rule of law to all stock corporations. That decision seems to have been based upon the legal proposition that a corporation is a contract between the corporators, as a partnership is a contract between the partners, and that the original contract by which the corporation is formed, embraces, or includes in it, the right, in existing corporators, of taking all increase of stock, in proportion to the amount then severally held by them in the existing stock. This proposition we can not assent to as law. A corporation is a creature existing, not by contract; but, in this country, is created or authorized by statute; and its rights, and even modes of action, may be, and generally are, defined and marked out by statute; and where they are, they can not be changed, even by the contracts of the corporators. There may be a contract among individuals to enter into a corporation; but when they have become a corporation, the charter, not contract, determines their rights. The ...
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Scott v. Anderson Newspapers, Inc., 4-583A158
...It is governed by the law which created it, and by those legislative enactments which in terms apply to it. Ohio Insurance Co. v. Nunnemacher (1860), 15 Ind. 294, 296. There may be a contract among individuals to enter into a corporation; but when the contemplated corporations comes into ex......
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... ... has been invoked in a proper case. Head v ... Providence Ins. Co., 2 Cranch, 127, 2 L.Ed. 229 ... (see, also, Rose's U.S. Notes); Ohio Ins. Co. v ... Nunnemacher, 15 Ind. 294; Leonard v ... Insurance Co., 97 Ind. 299; Presbyterian Assur ... Fund v. Allen, 106 Ind. 593, 7 N.E ... ...
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