Savage v. Shaw

• Decision Date: 16 May 1907
• Parties: SAVAGE v. SHAW et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

195 Mass. 571

81 N.E. 303

SAVAGE v. SHAW et al.

Supreme Judicial Court of Massachusetts, Middlesex.

May 16, 1907

COUNSEL

Frederick H. Nash, for appellant.

Guy W Cox and James F. Bacon, for appellees.

OPINION

SHELDON J.

The plaintiff on July 5, 1904, recovered a judgment against the Marlborough Street Railway Company in an action of tort for injuries received by him while a passenger on a car of that company. His judgment has remained unpaid; and he seeks in this bill to hold the defendants, as directors of that company, for its payment, under the provisions of Rev. Laws c. 112, § 19. This statute provides that 'the directors of a street railway company shall be jointly and severally liable, to the extent of its capital stock, for all its debts and contracts until the whole amount of its capital stock as originally fixed by its agreement of association, or if a chartered company, by its directors, shall have been paid in and a certificate stating the amount thereof so fixed and paid in shall have been signed and sworn to by its president, treasurer, clerk and a majority of its directors, and filed in the office of the secretary of the Commonwealth.' See now St. 1906, p. 490, c. 463, pt. 3, § 29; Westinghouse Electric Co. v. Reed, 80 N.E. 621; American Steel & Wire Co. v. Bearse, 80 N.E. 623. The question accordingly which lies at the threshold of the case is whether the plaintiff's judgment was a debt of the corporation within the meaning of that statute.

The liability now in question was created by St. 1864, p. 156, c. 229, § 6, by which it was enacted that the directors should be liable, within the limits there stated, 'for all debts and contracts made by the company.' This was made to read in the revision of 1882 that the directors of every street railway company should, within the same limits, be liable 'for all its debts and contracts.' Pub. St. c. 113, § 14. The language of the Revised Laws already quoted is, as to this matter, substantially that of the Public Statutes. The verbal changes thus made in the original act of course cannot affect the construction of the statute. Hardy v. Yarmouth, 6 Allen, 277; Morrison v. McDermott, 6 Allen, 122, 123; Dudley v. Adams, 5 Allen, 96, 97; Commonwealth v. Hall, 4 Allen, 305, 307. We must therefore construe this statute as if the liability which it creates were declared to be for 'all debts and contracts made by the company.'

It is settled that this liability does not extend to torts committed by the corporation. Child v. Boston & Fairhaven Iron Works, 137 Mass. 516, 50 Am. Rep. 328; Heacock v. Sherman, 14 Wend. (N. Y.) 58. Whether it includes a judgment recovered in an action of tort, was expressly left undecided in the case first cited. The question has however arisen in other jurisdictions; and it frequently has been held that such words as 'debts' or 'debts and contracts' of corporations, in statute imposing a personal liability upon the directors or stockholders, cannot be construed to include judgments for torts of the corporation. Chase v. Curtis, 113 U.S. 452, 5 S.Ct. 554, 28 L.Ed. 1038; Leighton v. Campbell, 17 R.I. 51, 20 A. 14, 9 L. R. A. 187; Bohn v. Brown, 33 Mich. 257; Cable v. McCune, 26 Mo. 371, 72 Am. Dec. 214; Cable v. Gaty, 34 Mo. 573, 86 Am. Dec. 126; Doolittle v. Marsh, 11 Neb. 243, 9 N.W. 54. Cases in which the judgment relied on was founded upon a claim under a contract, though unliquidated, are not in conflict with these decisions. Mill Dam Foundry v. Hovey, 21 Pick. 417, 455; Haynes v. Brown, 36 N.H. 545. The case of Carver v. Braintree Manuf. Co., 2 Story, 432, Fed. Cas. No. 2,485, was sufficiently considered by this court in Child v. Boston & Fairhaven Iron Works, 137 Mass. 516, 520, 50 Am. Rep. 328; and we are of opinion that the case of Powell v. Oregonian Railway (C. C.) 36 F. 726, ^[1] is at variance with the great weight of authority, unless it can be supported upon the ground that the original claim in that action was one which grew out of the covenants of a lease, and that is not the ground upon which the decision was put.

And we are of opinion that this statute cannot reasonably be construed to include among the 'debts and contracts made by the company' judgments like the one here in question. The word 'debt' is indeed one of large import, and ordinarily may be taken to include all that is due under any form of obligation as well as under any promise. Bowen v. Hoxie, 137 Mass. 527, 531; Gray v. Bennett, 3 Metc. 522, 526. But in this statute the words 'debts and contracts' are both qualified by the limitation 'made by the company.' The enactment is one of a penal character, imposing upon the defendants liabilities which they never agreed or intended to assume, and must be construed with some strictness. Gray v. Coffin, 9 Cush. 192; Chase v. Lord, 77 N.Y. 1; Bruce v. Platt, 80 N.Y. 379, 381; Irvin v. McKeon, 23 Cal. 472; Chase v. Curtis, 113 U.S. 452, 457, 5 S.Ct. 554, 28 L.Ed. 1038. The natural import of the language of the statute is that it contemplates ordinary debts or obligations voluntarily contracted by the corporation rather than involuntary obligations imposed upon it by law in consequence of the negligent or tortious acts of its agents or servants. Doyle v. Kimball, 23 Misc. 431, 52 N.Y.S. 195; Esmond v. Bullard, 16 Hun, 65. The judgment does establish a legal obligation on the part of the defendant therein to pay the amount recovered; and in this commonwealth, as in most jurisdictions, the judgment against the corporation is conclusive in the suit against the directors and stockholders of the existence and amount of the debt or demand as declared on. Old Colony Boot & Shoe Co. v. Parker, 183 Mass. 557, 67 N.E. 870; ...