3 Paige Ch. 409 | New York Court of Chancery | 1831
The second section of the act of April, 1814, (3 Laws of N. Y. 199, b.) makes the assignment, under the order of the proper officer, a full discharge, not only to the corporation but also to the president, directors and stockholders of the company, from all debts due at the time of the assignment. But as all the debts due to these complainants were contracted before the passing of that act, it was void as to those debts, as a law impairing the obligation of contracts. And according to the decision of the supreme court of the United States, in Sturges v. Crowningshield, (4 Wheaton’s Rep. 122,) and the doctrine established in our own courts since that decision, the debts due to these complainants were not discharged either as against the corporation or the individual stockholders.
The statute authorizing the discharge of the corporation as an insolvent debtor does not profess to make that discharge a dissolution of the company. On the contrary, there are provisions in the act which show conclusively that the legislature did not intend it should have that effect. And if the surplus of the assigned property was equal to one half the former capital of the company, the corporation was authorized to go on with the business of insurance. There was nothing in this case to prevent the complainants, who had not already obtained judgments for the amount of their demands, from suing the corporation, at any time during its legal existence, notwithstanding the discharge. And as the stockholders are only liable for the debts which were due from the corporation at the time of the expiration of its charter, if any of these
If the debts were actually due from the corporation at the time of its dissolution, it can make no difference whether they were due from the corporation by judgments, or specialty, or only by simple contract. The right of action against the stockholders is founded upon the statute; and the form of the action against them must be the same, whatever may be the nature of the original indebtedness of the company. If an action at law is brought against the stockholders, it must be either an action of debt or assumpsit, founded upon their liability created by the statute. As a general principle, wherever a party is under a legal liability to pay money to another in consequence of some supposed benefit received as the consideration for such liability, and where no particular form of action is prescribed by the common law, or by statute, to recover the amount so due, an action of assumpsit may be maintained upon an implied promise, founded on such legal liability. But if the liability of the defendant is founded upon some negligence or misconduct on his part, by which the plaintiff has sustained an injury, an action on the case is in general the appropriate remedy. I think this is a case in which actions of assumpsit might have been brought against the several stockholders to recover the amount due from each according to their respective liabilities. It is equally clear, however, that the creditors of the company might have brought actions of debt instead of as
I am satisfied, however, that this is not a.suit over the subject matter of which a court of equity has exclusive and peculiar jurisdiction, within the meaning of the fiftieth section of the statute. The complainants had a remedy, though I admit a very difficult and imperfect one, by actions at law against the several stockholders, for the amount which each was liable to contribute towards the payment of the respective debts due from the company.
Again ; this plea is bad in point of form. It is evident that there are not several and distinct rights of action set up in the bill, some of which are alone cognizable in equity and the others subjects of concurrent jurisdiction. If the complainants or any of them had a remedy at law as to a part of their debts,
The question whether there is any equity in this case, on the face of the complainant’s bill, cannot properly be raised upon the argument of this plea. Although at law there is a rule that, upon a demurrer, the party must fail whose pleading is first defective in substance, it does not apply to a plea in this court, which must stand upon its own merits alone. A plea cannot be substituted in the place of a demurrer here. (1 vern. Rep. 78. 2 Paige's Rep. 180.) If therefore the discharge of the company and its stockholders under the insolvent act of 1814 is valid as against the debts due to these complainants, on the ground that these have come in and received their dividends in the assigned property, under the act, Shis plea cannot be sustained.
As the plea is defective both in form and substance, it must ye overruled with costs.