111 Ky. 318 | Ky. Ct. App. | 1901
Lead Opinion
Opinion of the court by
Affirming.
The appellee, Sol Levy, brought this suit as a creditor of the Ge-rman-American Title Company, to- enforce the payment of its stockholder’s -double liability to creditors of the corporation, under section 547 of the act of April 5,,
The stockholders claim that, as the German-American Real-Estate & Investment Company was incorporated under the provisions of chapter 56 of the General Statutes, and before the enactment of the private corporation act of April 5, 1893, now chapter 32 of the Kentucky Statutes, and they have not accepted the provisions of that act in the manner pointed out by section 554, by a reacknowledgment of their articles of incorporation, they are not liable, under section 547, for double the amount of their stock to creditors of the corporation; while the appellee claims for the creditors that, as the corporation was -organized after the present Constitution went into effect, no acceptance of its provisions was necessary, and, as its articles of incorporation ,hiad been acknowledged by each stockholder after its organization, it was not necessary that they should again do s-o, and that by amending its charter of the 1st of February, 1894, in accordance with the provisions of section 559 of the act of 1893, and operating under this -amendment, -by ■changing their corporate name, and making other material and important’alterations in its government, the reorgan
Section 554 of chapter 32 of the Kentucky Statutes provides that all the corporations then existing under the laws of this State may be reorganized by executing and recording articles of incorporation as provided by that act, and that after they have done so, and complied with the other laws relating thereto, the- assets of such old corporation shall be vested in, and become the property of, the new corporation, without deed or transfer, and they then become a corporation under the new law, with all the powers and liabilities conferred and imposed by the act. Section 570 provides that no old corporation shall avail itself of any of the provisions of the act until it shall have accepted the provisions of the new Constitution. -Section 574 provides that charters of an old corporation may be amended in the manner provided by the statutes, after its acceptance of the provisions of the new Constitution» Section 559 provides for the amendment of the charters of any corporation by the consent in writing of at least two-thirds of its capital stock, after such amendment shall be signed and acknowledged by a majority of the directors, -and filed and recorded as articles of incorporation are required to be; and section 573 of the act says that all charters which are inconsistent with the provisions of the act concerning other similar corporations shall stand repealed, and on the 28th of September, 1897, to th-e extent of such conflict.
When we consider these sections together, it is clear that the General Assembly intended to put private corporations in this State upon the same footing, and to
It is claimed by counsel that the judgment is erroneous in awarding interest from the date of the institution of the suit, instead of from the 26th of February, 1901, when the agreement waiving a reference to the commissioner was filed. W.e think not. If necessary to pay the debts
Dissenting Opinion
dissenting opinion:
There is but one question in this case. It is whether the Genman-American Real-Estate & Investment Company, by adopting an amendment to its articles of incorporation whereby it changed its name to the German-American Title Company, and made a few changes, -not particularly material, in the qualifications- of its directors, etc., rendered its stockholders subject to the double liability imposed by the new corporation law. The answer to that question depends solely upon the construction of the new corporation act adopted in 1893. When the new corporation law was adopted, under the new Constitution, the manifest intention was to provide a means whereby, in time, the corporations of the State should be classified, and those of each class placed upon the same footing. It was provided that all corporations thereafter created should be created under the general law, by which their classification was fixed. The statute looked to the ultimate result of bringing all, or' as many as possible, of the corporations theretofore created under the same classification. There existed a large number of corporations established by legislative fiat to which special privileges had been granted by the Legislature. Some of these had been incorporated before the act of 1856, and relied for the maintenance and preservation of their privileges upon the doctrine of contract rights, established in the Dartmouth College cases. Many of those incorporated after 1856 were supposed to be protected in
As to corporations theretofore created, the stockholders of which did not desire to subject themselves to the liabilities imposed by the new act, provision was made. Under section 573, they were given until September 28, 1897, at which time it was provided that any provision of their charters or articles of incorporations, whether granted by special act or obtained under the general law, which were inconsistent with the provisions of this chapter concerning similar corporations, should stand repealed; and the concluding sentence of this section reads: “After the 28th day of September, 1897, the provisions -of this chapter shall apply to all corporations created or organized under the laws of this State, if said provisions would be applicable to them if organized under this chapter.” The stockholders of such corporations were given some four years to determine whether they would subject themselves to the liabilities imposed by the new corporation law or not. They might dissolve their corporations', or they might continue them, and become subject to the new law. They had that time to consider. If they wished to do so, they might reorganize under the new corporation law, and become a corporation owning all the property of the old corporation, but subject to exactly the same liabilities, and having exactly the same rights, as if they had been incorporated under the new law. This was pro-
There is no constitutional question, here. Nobody doubts that the Legislature might constitutionally have imposed upon every existing corporation (not protected by the provisions of the Federal Constitution) the double liability as to all contracts thereafter made by it. Nobody doubts that it might have attached that consequence to the adoption of amended articles of incorporation. The question is, what did it do? It surely, by section 573, gave four years in which existing corporations might determine whether they would subject themselves to the liabilities of the new law. It surely also provided, in section 554, a mode whereby they might, by unanimous consent, sooner become subject to those liabilities, if they desired. Lid it also, by section 559, which provided that any corporation might .amend its articles in an easier mode than the one which had existed under the old law,— that is, by a two-thirds vote, — intend that it should become subject thereby to the liabilities of the new law. If such •was the intention, it was easy to say so. The courts must presume that all citizens know the law, but thei written law should not be so construed as to make that presumption
The .reasoning of the court, would be sound if the Legislature had not, in express terms declared when the double liability should attach to the stockholder. By the express provisions of the statute, it attached immediately in all new corporations formed under the act; but in existing corporations formed before the act was passed it did not attach until September, 1897, unless they reorganized under the act. The plain meaning of this was to give until September, 1897, for the existing corporations and their stockholders to adjust their affairs, and avoid liabilities which it had been expressly agreed they were to be exempt from when the corporation was formed. So, unanimous consent was required of the stockholders to reorganize under the new .act, in order that a part might not, before September, 1897, Impose upon others the double liability which they might be unwilling to assume. The Legislature having seen fit to provide two contingencies in which the double liability should exist, the court is not at liberty to add,
'The courts presume that everybody knows the law-. They presume, also, that the laws are published, so that everybody may in fact know the law. The real publication to the world of a statute is sometimes much lat&r than the assumed promulgation. But, in civilized countries', the law exists somewhere, where the citizens can have access-to it, and see what the language is, even if he can not understand its meaning. Since the dawn of legal history, it
There is no question of acceptance. This corporation was created under the new Constitution. It did not have to accept the provisions of that instrument in order to have the benefit of the provisions of the new law which applied to it. Section 559, as to amendment, did apply to it. It accepted and acted under section 559. It claimed the benefit of that section. But it did not thereby claim the benefit of, or make itself subject to, all the provisions of the whole chapter. If it did, then all corporations which have acted under section 576, and accepted its provisions, have also accepted and become subject to the provisions of the whole chapter, and are subject to the double liability by printing the word “Incorporated” after their corporate names. The opinion imposes a liability without warning. It does more. It imposes the liability after notice that a locus penitenliae was granted, in which the stockholders of corporations might determine whether they would subject themselves to that liability. It was a liability which no corporator could have dreamed he was incurring by continuing a member of the corporation. Its imposition is, in my judgment, to add to the terms of the statute, and create by implication a liability which its express terms forbid. I therefore dissent from the judgment of the court.