Wallingford Manufacturing Co. v. Fox

| Vt. | Feb 15, 1840

The opinion of t'he court' was delivered by'

Williams,J.

— The plaintiffs were incorporated in November, 1838, and bring this action to recover three assessments on certain shares of the capital stock, alleged-to belong to the defendant. One of the assessments, only-,-was made after the act of incorporation.- If the plaintiffs cart recover this'assessmenf, it is not' very- material whether the recovery can embrace the two former, as' by making a new one, according to the tenor of their by-laws, they can obtain the same result as they could by a recovery in this action. It appears that certain individuals, including the defendant',- associated together in February, 1837, under the same name as the present plaintiffs, and provided for the appointment of agents, making assessments- and holding meetings. It was also provided that an act of incorporation might be obtained, and that a transfer of the capital stock, &c., might be made to the company which might be incorporated.- The act was not obtained that year, but was obtained the next year thereafter. The questions which have been made, are 1, whether there is any promise to pay the assessments, in the articles of association, and if so, whether the plaintiffs can sue on that promise; and 2,- whether the defendant is a' member of the company and' liable to be sued for the assessments made by them ? •

Upon the first question, it is to be remarked that the promise relied on was made before the company had an existence. The right to enforce any contract made with that association, existed anterior to the existence of the corporation. There was a remedy, either at law or equity, to enforce any contract made with them. As whatever contract was made, was not with the present company, the right of action and the remedy to enforce the performance cannot be transferred to the present plaintiffs. There must be some assent, either express or implied, on the part of the defendant to become a member of the corporation, on the same terms and conditions as were contained in the articles of association, before an assessment could be made and an action sustained thereon. It is unnecessary for us to say what would have been the consequences if an act of the legislature had been obtained, incorporating those who signed the articles of association, and adopting the provisions of the articles as the fundamental laws of the company. Whether the defendant would-, by the very act, become a member of the company, unless he expressed his dissent, we need not decide, as this question does not necessarily arise in this case.

The act, passed in 1838, was not of this character. It formed a new company, not mentioning any association already formed, but authorizing the taking' and dividing the stock, sale and transfer thereof,- and- making assessments, in the same manner as other new corporations are created and formed. It is difficult to see how the members of the old association could slide into, and become amalgamated with the corporation thus created, without some act on their part assenting thereto.

This view also disposes of the second question, as no assent on the part of the defendant is found. He was not a member of the corporation and liable for any assessments made by them. And further, by the articles of association, the defendant, by neglecting to pay the assessments made in pursuance of those articles, forfeited his stock and ceased to be a member. Whether he can be made liable for those assessments, by a suit at law or in equity, is not a question now before us, but we are of opinion that he is not liable in this action to the present plaintiffs. The judgment of the county court is therefore reversed.