Dewey v. St. Albans Trust Co.

57 Vt. 332 | Vt. | 1885

The opinion of the court was delivered by

Rowell, J.

This is a petition in said cause by the receiver of said company, setting forth that debts to the amount of §580,000 have been proved and allowed against said company, and a dividend of twenty per cent ordered to be paid thereon, and that the same has been paid to the extent of the funds in his hands ; that there is not enough property and assets of said company remaining that can be collected and made available to satisfy the residue of said debts into more than $100,000 — the amount of the chartered capital stock of said company, so that, before and at the time the petitioner was appointed receiver, said capital stock had become, and was and now is, impaired by losses and otherwise to the full amount thereof; that therefore it became and now is tlie duty of the directors of said company to forthwith repair the same by assessment thereon and on the holders thereof, but that they have neglected and refused so to do, or in any other way to make good such loss, although specially thereunto requested by the petitionér; and praying the court to order such assessment to be laid, and paid to the petitioner or into court, for the purpose of enabling the petitioner to pay the residue of said debts.

The facts found.and certified up sustain the allegations of the petition, and show that the company stopped business on August G, 1883, and has done no corporate act since.

Section 20 of the charter of said company — St. 18G8, No. 157 — provides that “if at any time the capital stock paid into said corporation shall be impaired by losses or otherwise, the directors shall forthwith repair the same by assessment.”

It is contended on behalf of the petitioner, that by force of this provision, the stockholders are bound to the creditors of said company to contribute to the amount of their capital stock towards the payment of the debts of the company, the assets of the company being insufficient; that the obligation thereby imposed is an asset, to be used for the benefit of creditors; that the case stands as it would if it had been incorporated into the stock subscription, that the subscribers would not only make, up the full capital subscribed, but would maintain it in its integrity, each contributing his just proportion. In other words, it is contended that said provision imposes a personal liability on the stockholders for the debts of the company, and obliges them to keep the capital stock of the company at all times unimpaired for the benefit of existing creditors.

But we are unable to adopt this view. No such liability exists at common law; and we must suppose that if the mind of the Legislature was specially drawn to the subject of departing from the common law in this respect, and conceived a purpose'to make the stockholders thus liable, such purpose would have been indicated with some distinctness, and the language used, fairly adequate to express with reasonable certainty the real sense intended by the Legislature. But the language of the provision before us, taken in connection with the whole act, is not fairly adequate to express an intention to impose personal liability on the stockholders; nor yet to impose on them the obligation of keeping the capital stock unimpaired for the benefit of existing creditors; but it looks rather to a continuance of business by the company, and was intended to prevent such continuance with an impaired capital: and it was adequate to that intent, for if the company undertook to continue business without repairing an impaired capital, the general law, to which its charter made the company subject, made it the duty of the bank commissioner to apply to the Court of Chancery for an injunction against the company and the appointment of a receiver — Gen. Sts. c. 86, ss. 31, 32; and the St. of 1874, No. 87, s. 5, conferred on the inspector of finance in the inspection and examination of savings banks and trust companies, all and singular, the powers that were conferred on the bank commissioner by c. 86 of the Gen. Sts.; and by s. 3601, R. L., the provisions of law applicable to banking associations were made applicable to insolvent trust companies, except as to application of assets. Although the ancient rule, that statutes in derogation of the common law are to be strictly construed, has been considerably relaxed in modern times, if indeed it now has any solid foundation in our jurisprudence, yet it should ever be remembered that the rules of the common law are not to be changed by doubtful implication, nor overturned except by clear and unambiguous language.

The duty to repair capital rested on the directors, if they desired to continue business, whether the company was insolvent in fact or not. Suppose the assets to be $150,000 only, and the. debts $100,000; the capital is impaired one half. Or suppose the assets and the debts to be just equal; the capital is all gone. But in neither case could creditors interpose to compel the capital to be repaired, for they would have no interest in the matter, as the assets are sufficient to pay the debts ; and yet, the duty to repair the capital would not be discharged, but would continue notwithstanding. This shows that the purpose of repairing capital is, not to provide means wherewith to pay the debts of a defunct institution, but rather to afford an earnest for the further prosecution of business.

The petitioner contends for an assessment to the amount of the par value of the stock only, and concedes that he can ask no more. But this very concession shows the reed on which he leans; for if an assessment can be made at all, no reason can lie given for stopping short of assessing enough to pay all the debts in full, which would take many times the amount of the stock.

Note the explicitness with which the Federal statute has imposed liability on shareholders of national banking associations. They “ shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof.” R. S. s. 5151. Again: i; Persons holding stock as executors, administrators, guardians, or trustees, shall not he personally subject to any liability as stockholders,” but the estate in their hands is liable instead. Sec. 5152. How unlike the provisions of the statute under consideration. .Indeed, it is scarcely conceivable that the Legislature intended to impose the liability here contended for, and yet came so far short of using language adequate to that end.

Petition dismissed with costs.