108 Ky. 21 | Ky. Ct. App. | 1900
Opinion or the court by
Apeibming.
It is earnestly insisted for the appellant that when he put $35,000 of his fortune in this enterprise it was on condition that the remainder of what he had was not to be responsible for the corporate debts, and, while the Legislature had the power to modify the charter of the corporation, and impair the value of what he had put into it, it could not reach out into his private estate, and- place that also in the power of the corporation by making it liable for the corporate debts. Several important questions are necessary to the decision of the case: (1) Does the statute above referred to make stockholders in corporations in existence when it was enacted liable personally to the extent of the amount of their stock for all debts of the corporation created after September 28, 1897? (2) Had the Legislature power to make such a law a-s to existing corporations? (3) Can appellant demand relief from a contract made with notice of his legal rights? These questions will be disposed of in the order stated.
“The stockholders of each corporation shall be liable to creditors for the full amount of the unpaid part of the stock subscribed for by them, and stockholders of corporations not organized for educational, religious, -charitable or benevolent purposes, or for the purpose of building, constructing or operating turnpikes or bridges, lines of railroad, telegraph or telephone, or developing or improving lands, mines, or waterways, or constructing or operating water, gas or electric plants, or operating for petroleum, natural gas or salt water, shall be individually responsible, equally and ratably, and not one for the other, for all contracts and liabilities of such corporation to the extent of the amount of their stock at par value, in addition to the amount of such stock; but persons holding stock as fiduciaries shall not be personally liable as stockholders, but the estates- in their hands shall be liable, in the same manner and to the same extent as the property of other stockholders; and no transfer of stock shall operate' as a release of any such liability existing at the time of such transfer: provided, the action to enforce such liability shall be commenced within two years from the time of transfer.” Section 547.
“The provisions of all charters and articles of incorporation, whether granted by special act of the General Assembly, or obtained under any general incorporation law, which are inconsistent with the provisions of'this chapter concerning similar corporations, to the extent of such conflict, and all powers, privileges or immunities of any such corporation which could not be obtained under the provisions of this chapter, shall stand repealed on Sep*28 tember 28, 1897; and if the officers, managers or agents oí such corporation shall, after said date, exercise any powers, privileges or immunities repealed by this section, or inconsistent with the provisions of this chapter,- relating to similar corporations, or which could not be obtained under -this chapter, the officer, manager or agent so offending, and the corporation for which he acts, shall each be guilty of -a misdemeanor, and fimed for each offense not less than one hundred nor more than one thousand dollars, and upon the conviction of the corporation, the trial jury may, at their discretion, direct the forfeiture of its charter -or articles of incorporation, in which case the court shall so adjudge. After the twenty-eighth 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.” Section 573.
It is earnestly argued by counsel for appellees that only the powers, privileges, and immunities of the corporation are affected: that exemption from liability for-the debs of the corporation is not a franchise of the corporation, but a privilege of the stockholders, and- is not affected by the statute quoted. Without discussing the meaning of the section, if the last sentence had been omitted, we think it clear that part of the section leaves no room for this argument. It declares that after September 28, 1897, the provisions of the. chapter shall apply alike to all corporations created or organized under the laws of the State. By the previous provision of the chapter the liability for the debts of the corporation had been imposed on the stockholders to the extent of their stock; and this provision, like all the rest, was plainly intended to apply
2. It is true that the corporation had no power of itself to implicate its stockholders in a liability which they had declared they would not incur. But their only right to exemption from liability for the debts of the corporation was by virtue of the statute giving it the power to exempt its stockholders from this liability. This statute the Legislature had the right to repeal, not only by virtue of the provision of the Constitution above quoted, but by reason of a statutory reservation of this legislative power by the act of 3856, passed long before the enactment of the statute under which the corporation! was organized. The stockholders formed the corporation on the conditions held out by the laws of the State. One of these conditions was that the act under which they were created might be amended or altered by the Legislature at pleasure, as it might deen necessary. The Legislature might, in the first place, have provided that the stockholders should be liable for the corporate debts; and when it provided that they should not be so liable, but reserved the right to alter or amend the law, or to repeal any grant or franchise obtained under it, those who had acted under the statute with full notice of these facts can not complain that any constitutional right of theirs is violated by the alteration of the law. The rule is thus stated in Thomp.
3. The remaining question is: Is appellant entitled to a dissolution of the corporation, or to terminate his connection with it, in order to avoid liability for the corporate debts after September 28, 1897? If he has this right, then the holder of one share of stock in all of, these corporations created before the act of April 5, 1893, had the same right. Such a result was certandy not contemplated. A large part of the business of the State was then done by such corporations, and such a construction of the statute at the time would have brought about countless confusion and litigation paralyzing the prosperity of the State. In organizing this corporation, the stockholders in effect agreed that the corporation might affect their individual interest to the extent of the authority conferred upon it, and that this authority might :be altered or changed by the Legislature. The disability of the corporation to bind the stockholders beyond the amount of the stock, like any