Petition of Penniman

• Decision Date: 15 May 1876
• Citation: 11 R.I. 333
• Parties: PETITION OF LUCIUS S. PENNIMAN for a Writ of Habeas Corpus.
• Court: Rhode Island Supreme Court

11 R.I. 333

PETITION OF LUCIUS S. PENNIMAN for a Writ of Habeas Corpus.

Supreme Court of Rhode Island.

May 15, 1876

Under the provisions of the Gen. Stat. R.I. cap. 142, § 20 stockholders in manufacturing corporations are liable to arrest on execution issued upon a judgment against the corporation.

After a stockholder in a manufacturing corporation had been committed on an execution against the corporation pursuant to Gen Stat. R.I. cap. 142, § 20, which is identical in its provisions with Rev. Stat. R.I. cap. 128, § 19, the General Assembly passed the following act, being Public Laws, cap 600, March 27, 1877: -

" Section 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.

Section 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 obtained upon any ground upon which such corporation could have contested the same in the action in which such judgment was recovered" : -

Held, on a petition for a writ of Habeas Corpus, that this act affected the creditor's remedy, but did not impair the obligation of the contract, in the sense of the Constitutions of the State of Rhode Island and of the United States.

Held, further, that this act was not repugnant to the constitutional provisions of the state or of the United States.

PETITION for a writ of habeas corpus . The facts are stated in the opinions of the court.

Edwin Aldrich & John D. Thurston, for the petitioner.

Tillinghast & Ely, for the committing creditor, contra, cited Marcy v. Clark, 17 Mass. 330; Stedman v. Eveleth, 6 Met. 125; Richmond v. Willis, 13 Gray, 182; Curtis v. Harlow, 12 Met. 3.

DURFEE, C. J.

This is a petition for a writ of habeas corpus to relieve the petitioner from imprisonment in the Providence County jail. The petitioner is held by virtue of a commitment under an execution issued upon a judgment recovered against the American Steam & Gas Pipe Company, described in the execution as a corporation created by the General Assembly of Rhode Island. The execution is in the usual form of executions against corporations, and makes no mention of the petitioner. The officer, however, in his amended commitment states that the petitioner is now and was, when the judgment debt was contracted, one of the stockholders and members of the company, and as such liable for the debt, the company being a manufacturing corporation established in the city of Providence, subject to cap. 128 of the Revised Statutes, and cap. 142 of the General Statutes, and never having filed any return in the city clerk's office in said city, as required by said statutes, and that the petitioner is committed for want of goods and chattels, or real estate of him or the corporation, to satisfy the execution. The committing creditor, who appears to oppose the release of the petitioner, contends that the commitment is authorized by Gen. Stat. R.I. cap. 142, § 20, inasmuch as the neglect of the company to file the required return or certificate subjects the stockholders to a liability for the company debts. The section is as follows: -

" 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."

The petitioner contends that this section ought not to be so construed as to subject a stockholder to imprisonment for a debt of the corporation, unless he would be liable to imprisonment for the debt if it was his individual debt; and that, under Gen. Stat. R.I. cap. 211, an execution for debt does not run against the body of the debtor, except under circumstances which do not appear upon the record of the case against the American Steam & Gas Pipe Company to exist. In other words, the petitioner contends that, inasmuch as the statute (cap. 211, § 14) authorizes the issuing of executions against the body, in an action for debt, whenever the debt accrued before the 31st day of March, 1870, or whenever the debtor shall have been arrested and held to bail on an original writ or writ of mesne process, or whenever it shall be made to appear to the court rendering the judgment or to any justice thereof that he is about to depart the state without leaving therein sufficient real or personal estate to satisfy the judgment, or that he has been guilty of fraud in contracting the debt, or in the concealment, detention, or disposition of his property, and only in these cases: so, in an execution for debt against a manufacturing corporation, the body of a stockholder can only be taken when one or another of the circumstances above recited has occurred.

We do not think this is an admissible construction. Chapter 211 prescribes the forms of executions, and directs how and when they shall be issued and returned. Upon a judgment for debt, an execution is issuable against the property of the debtor, as of course, and against his body as well as his property in the cases before enumerated.

If, however, the judgment is against a corporation, the execution can only run against property, for the corporation has no body to be taken. But cap. 142, § 20, provides that upon such an execution the persons and property of the stockholders may be taken in the same manner as upon executions issued against them for their individual debts. The words " in the same manner" do not, in our opinion, refer to chapter 211, for that chapter prescribes the forms of execution, but does not direct the manner in which they shall be served, or the manner in which persons or property shall be taken upon them. As we have seen, however, the chapter does prescribe the form of an execution against both property and person; and the meaning of section 20 of chapter 142 is, we think, that the persons and property of stockholders may be taken upon an execution issued against the corporation in the same manner as upon such an execution issued against them for their individual debts, for it is only upon such an execution that both persons and property can be taken. The statute readily bears this construction, and we only hesitate to adopt it because we do not easily perceive why the liability of a stockholder for the debts of the corporation should be more stringent than his liability for his individual debts. On the other hand, it is difficult to see how, under the construction proposed by the petitioner, the section can be carried into full effect; for the statutes make no provision for the intervention of either court or justice, after the issuing of an execution, to authorize or direct its service upon the body. The section remains the same in the General Statutes as it was originally in the Revised Statutes; and we ought to give it the effect which it originally had, so far as we can consistently with the alterations which have been made in the law regulating the form and service of writs and executions. We do this when we adopt the construction contended for by the committing creditor. We therefore feel constrained to adopt that construction, and also to refuse the writ of habeas corpus unless the petitioner, on an examination of the amended commitment, can find some other reason for granting it.

Petition refused .

The above petition was heard before DURFEE, C. J., and MATTESON, J.

After the foregoing petition had been refused, the General Assembly of Rhode Island enacted cap. 600 of Public Laws, March 27, 1877. This act is given in full by Potter, J., in the opinion of the court which follows. Thereupon Penniman, March 28, 1877, filed another petition for a writ of habeas corpus and for a discharge. The discharge was opposed by judgment creditors of the American Steam & Gas Pipe Company, on the ground that cap. 600 was inconsistent with art. 1, § 12, of the Constitution of the state, and with art. 1, § 10, of the Constitution of the United States, which prohibit legislation " " impairing the obligation of contracts." Penniman was released March 31, 1877, on filing satisfactory jail bonds, and his petition was heard April 4, 1877, by Durfee, C. J., and Burges, Potter, and Stiness, JJ.

Edwin Aldrich & John D. Thurston, for the petitioner.

James Tillinghast & Harvey N. Shepard, contra, for the creditor Perham.

William B. Beach, contra, for the creditor Tweedle.

POTTER J.

William Tweedle of Providence recovered judgment against the American Steam & Gas Pipe Company, and on the execution against said corporation, for want of the goods and chattels of the corporation, or of said Penniman to be found by the officer in his precinct, the officer committed said Penniman to jail, he being, as alleged in said return, a stockholder of said corporation and liable for said debt, said corporation not having made the returns required by statute. Penniman was also committed on a similar execution against said corporation in favor of Charles S. Perham of Boston.

He was committed by virtue of the provisions of the act concerning manufacturing corporations, Gen. Stat. R.I. cap. 142, § 20 which provides that in certain cases, i. e. when the corporation does not make the return...