47 So. 901 | Miss. | 1908
delivered the opinion of the court.
In 1904 there was organized and incorporated a corporation known as the Dodson Plow Company, domiciled at Columbus. •Some time later the corporate name was changed to the New South Plow Company and the capital stock was increased. The corporation found it necessary to borrow considerable sums of money aggregating some $35,000, from various banks in Columbus and Aberdeen, and to secure these sums executed deeds of trust on all its property for the benefit of the banks and of one Charles R. Smith, who was an accommodation indorser on certain of the company’s paper. It seems that the corporation virtually suspended operations after the execution of these trust deeds and may be said to be without assets and hopelessly insol
There can be no doubt that the infringement of a patent is a tort: 16 Ency. Pl. & Pr. 79. It is argued, howevex-, that, though this be an action ex delicto, yet the tort may be waived,
“It is impossible to perceive any valid objection to this doctrine. So long as the trespasser retains, in its original shape, the property taken, he may logically deny that he holds it under a contract, and demand that he be proceeded against in tort, and that the tort be established against him; but when he has parted with it, either for money or other property, or when he has mingled it in its use, or changed its form, he should not be permitted to deny the assumption to pay its value-.which the law imputes from his method of dealing with it.” This is all that is held in these cases, and certainly no warrant can here be found for abolishing all distinctions between actions ex delicio and ex
We think there can be no real dissent from the conclusion that an infringement of a patent is a tort, and that there can be no recovery upon the theory that the damages were awarded for any breach of an implied contract. The question before us is, therefore, broadly, whether the'term '“debts,” as used in our statute, can be held to include damages awarded for the commission of torts. It should be remembered that wre must look to our statutes, and to our statutes alone, in determining this question of liability; for at common law the stockholders were not liable for any of the obligations of a corporation, whatever their character and in whatever manner incurred. Terry v. Little, 101 U. S. 216, 25 L. Ed. 864. It is necessary, therefore, to give careful scrutiny to the exact terms of the statute.
Section 909 provides: “In all corporations each stockholder shall be individually liable for the debts of the corporation contracted during his ownership of stock, for the amount of any balance that may remain unpaid for the stock subscribed for by him, and may be sued by any creditor of the corporation; and such liability shall continue for one year after the sale or transfer of the stock. The stock in all corporations shall be transfei*able by the indorsement and delivery of the stock certificate and the registry of such transfer in the books of the corporation.”
Section 923 provides: “No part of the capital stock in any corporation shall be withdrawn or diverted from its purpose, nor a dividend declared, when the company is insolvent, or would be
Section 924 provides: “The amount of debts which any trading corporation or company may contract or owe shall not exceed the amount of its capital stock paid in; and in case the debts exceed that amount, the directors who contracted such debts shall be individually liable for the excess over the amount of capital stock, and may be sued therefor by any creditor, whether the debt be due at the time of suit brought or not, if such creditor was without notice or knowledge of the excess at the time his debt was made.”
It will thus be seen that the statute speaks of “debts contracted” and “debts existing,” and for the payment of these obligations the directors and stockholders are liable. These being the terms employed, we are not left without guidance in the authorities. The rule is thus stated by Beach: “The 'debts’ of a corporation, for which its members are made liable by statute, are such claims against it as arise from contract, and do not include a judgment against the company for tort, even through the tortious act might have been considered a breach of contract, nor costs in such action.” Beach on Brivate Corporations, § 151. To the same effect is another approved authority: “The statutory liability imposed upon the stockholders in corporations is a liability exclusively for debts and demands accruing against the corporation by reason of its contracts. It cannot, therefore, be enforced to pay damages recovered against the corporation in an action in tort.” 1 Cook on Corporations, § 217.
One of the earliest and most emphatic cases on the subject is Heacock v. Sherman, 14 Wend. (N. Y.) 58, construing and applying a statute much more comprehensive than our own. It is there said: “The eighth section of the act incorporating the
This was quoted with approval, and indeed, made the basis ■of decision, by the supreme court of the United States in Chase v. Curtiss, 113 U. S. 452, 5 Sup. Ct. 554, 28 L. Ed. 1038. In that case Justice Matthews, in referring to a contention which is here made that the demand, when reduced to judgment, becomes a debt within the meaning of the statutes on the subject, says :
“But, if this proves anything, it proves too much, and, instead of showing the thing to be proved, that the judgment is conclusive evidence of a debt, it establishes, on the contrary, that a liability on the part of the corporation for a tort, though after-wards reduced to judgment against it, is not a debt of the corporation, even .when in judgment, within the meaning of the statute imposing upon the trustees the penalty sought to be enforced in this action for not making and publishing an annual report showing, among other things, the amount of its existing debts. Eor, keeping in view the statement now urged by counsel of the impossibility, in advance of liquidation by the verdict of •a jury, of even approximately, much less accurately, stating the amount of such a liability, can it be supposed that the duty to do so is developed upon the trustees within either the letter or spirit of this statute, under penalty of becoming personally liable to pay whatever judgment may be thereafter rendered on account thereof against the corporation? Surely not. Such •claims are not within the contemplation of the act. The mischief to be prevented by its requirements has no relation to liabilities of that description. The creditors to be protected are those only who become such by voluntary transactions, in reference to which, for their benefit, the information becomes^ important as to the debts of the company.”
The issues and contentions here involved were made the sub
“The question, however, here is, What class of demands is embraced within the words ‘debts contracted ?’ Our legislature did not go the length which others have in fixing the liabilities of the stockholders of these manufacturing corporations. They did not enact, as in many other states it is enacted, that the stockholders should be responsible for every liability established against the corporation and which its assets turned out insufficient to meet. Such statutes as these, creating a general and determined liability, not dependent on circumstances, becoming as it were a part of the very essence of the charter, may reasonably admit of a very different construction from the law which seems to recognize the general principle of individual irresponsibility, subject to a very limited exception, and only ventures to hold out such responsibility as a penalty for a failure on the part of its managers to perform certain acts directed in the law, and supposed to furnish some advantages to the public. The statute, which Judge Story construed in Carver v. Braintree Mfg. Company, 2 Story, 432, Fed. Cas. No. 2,485, was of this remedial character. That act declared that every member of the manufacturing company named should be liable in his individual capacity for all debts contracted whilst he was a member. There was no penalty for an omission or a commission. It was simply a recognition of the individual liability principle on the face of the charter. Called upon to construe such a charter, Judge Story held it to be remedial, not penal, and, so viewing it, he gave the word ‘debt,’ which was the term used, a very liberal and extensive signification, to forward the manifest purposes of the law and the interest of society.
“Had our legislature taken the same step and boldly inserted such a provision in all their charters of this class of corporations, Judge Story’s views, forcible and reasonable as they are, ought to have great weight in determining the construction of
“The liability of the St. Louis Marine Railway & Dock Company to the plaintiffs was not a ‘debt’ within the legal acceptation of that term, as declared by Blackstone and other writers of established authority. It was not ‘a sum of money due by certain and express agreement.’ Whether the suit against the company which resulted in the judgment sought to be enforced against tlm defendant was one which would properly fall within the class of actions considered as founded on contract, or in that class which is based upon tort, is a more difficult question to de
“We regret that in the examination of this subject Ave have been without any precedent to guide us. The only case directly in point is the one cited from Massachusetts (Milldam Foundry v. Hovey, 21 Pick. 417), and that is undoubtedly against
We have thus set out these views at some length, for the obvious reason that they contain what we conceive to be the true theory upon all the propositions involved in this case. The opinion distinguishes, and distinctly limits, if it does not wholly disregard, the case of Carver v. Braintree Mfg. Company, 2
These authorities not only settle the proposition as to the non-liability of the stockholders for damages arising from tort, but many of these cases further consider the contention that the
Affirmed.