Penniman Case

Citation26 L.Ed. 602,103 U.S. 714
PartiesPENNIMAN'S CASE
Decision Date01 October 1880
CourtU.S. Supreme Court

ERROR to the Supreme Court of the State of Rhode Island.

The facts are stated in the opinion of the court.

Mr. Benjamin F. Thurston in support of the judgment below.

Mr. Harvey N. Shepard, contra.

MR. JUSTICE WOODS delivered the opinion of the court.

The General Statutes of Rhode Island, chap. 142, contain the following provisions:——

'SECT. 11. Every manufacturing corporation included within the provisions of this chapter, shall file in the town clerk's office of the town where the manufactory is established, annually on or before the 15th day of February, a certificate, signed by a majority of the directors, truly stating the amount of its capital stock actually paid in; the value, as last assessed for a town tax, of its real estate; the balance of its personal assets, and the amount of its debts.

'SECT. 12. If any of said companies shall fail to do so, all the stockholders of said company shall be jointly and severally liable for all the debts of the company then existing, and for all that shall be contracted before such notice shall be given, unless such company shall have been insolvent and assigned its property in trust for the benefit of its creditors, in which case the obligation to give notice by the filing of such certificate shall cease.'

'SECT. 20. Whenever the stockholders of any manufacturing company shall be liable, by the provisions of this chapter, to pay the debts of such company, or any part thereof, their persons and property may be taken therefor on any writ of attachment or execution, issued against the company for such debt, in the same manner as on writs and executions issued against them for their individual debts.

'SECT. 21. The person to whom such officers or stockholders may render themselves liable as aforesaid may, instead of the proceedings aforementioned, have his remedy against said officers or stockholders by bill in equity in the Supreme Court.'

While these provisions of the statute law were in force, Tweedle recovered judgment against the American Steam and Gas-pipe Company, a manufacturing corporation created by the General Assembly of Rhode Island, and subject to the provisions above recited. Penniman was a stockholder in that corporation. The certificate required by sect. 11 had not been filed. He was, consequently, individually liable in person and property for the satisfaction of the judgment. Therefore, the sheriff, holding the execution issued on the judgment, and finding no goods and chattels of the corporation or of Penniman, arrested him and committed him to jail.

While he was in jail, under the commitment, the General Assembly of Rhode Island, on March 27, 1877, passed an act 'defining and limiting the mode of enforcing the liability of stockholders for the debts of corporations.' It was as follows:——

'SECT. 1. No person shall hereafter be imprisoned, or be continued in prison, nor shall the property of any such person be attached, upon an execution issued upon a judgment obtained against a corporation of which such person is or was a stockholder.

'SECT. 2. All proceedings to enforce the liability of a stockholder for the debts of a corporation shall be either by suit in equity, conducted according to the practice and course of equity, or by an action of debt upon the judgment obtained against such corporation; and in any such suit or action such stockholder may contest the validity of the claim upon which the judgment against such corporation was obtainedu pon any ground upon which such corporation could have contested the same in the action in which such judgment was recovered.

'SECT. 3. All acts and parts of acts inconsistent herewith are hereby repealed.

'SECT. 4. This act shall take effect from and after the date of the passage thereof.'

Penniman did not take or offer to take the poor-debtor's oath, on the taking of which he would have been entitled to discharge from imprisonment, but, while he was still in jail under the commitment, applied to the Supreme Court of the State for his release by virtue of the provisions of the act just recited.

His discharge was opposed by Tweedle, the committing creditor, on the ground that the first section of the act, by virtue and force of which he claimed to be discharged from imprisonment, was repugnant to and in violation of sect. 10, art. 1, of the Constitution of the United States, and was, therefore, null and void, because it impaired the obligation of the judgment upon which the commitment had been made, and of the contract on which the judgment was founded.

It was adjudged by the Supreme Court that the section was constitutional and valid, and that by virtue thereof Penniman was entitled to be discharged from further custody under the commitment. He was discharged accordingly.

This judgment of the Supreme Court is brought here on error for review.

It is only necessary to consider that part of sect. 1 of the act above recited which relieves a party from imprisonment upon the execution. Penniman invokes that provision and no other. He was merely relieved from imprisonment, and it is that and that only of which Tweedle complains. Statutes that are constitutional in part only will be upheld, so far as they are not in conflict with the Constitution, provided the allowed and the prohibited parts are severable. Packet Company v. Keokuk, 95 U. S. 80. So that if so much of the section under consideration as relieves a debtor from imprisonment for debt is constitutional and can be severed from the other parts of the enactment, the judgment of the Supreme Court of Rhode Island should be affirmed.

That part of the section which relates to the imprisonment of the debtor, and that which relates to the seizure of his property, are entirely distinct and independent, and either one can stand and be operative, though the other should be declared void. We may, then, in deciding this case, consider sect. 1 as if it read: 'No person shall hereafter be imprisoned, or be continued in prison, . . . upon an execution issued upon a judgment obtained against a corporation of which such person is or was a stockholder.'

The only question, therefore, which we are called on to decide is whether this provision, enacted after the recovery of the judgment against the corporation, by virtue of which the defendant in error was imprisoned, is a law which impairs the obligation of contracts.

In other words, Can a State legislature pass a law abolishing imprisonment for debt on contracts made or judgments rendered when imprisonment of the debtor was one of the remedies to which his creditor was by law entitled to resort?

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