919 and others.
and others v.
October 30, 1886.,
The personal liability of a director of a private corporation, under section 3291, Rev. St. Vt., for the excess of indebtedness above two-thirds of its paidnp capital stock contracted by his consent, is to be considered as a liability founded on contract, and an action to enforce it can therefore be begun by trustee process.
TO ENFORCE PERSONAL LIABILITY Of!' DlRECTOR TRACTUAL OBLIGATION.
Trustee Process. Henry A. Harman, for plaintiff. James K. Batchelder, for defendant and trustee. James Barrett and James C. Barrett, for trustees.
WHEELER, J. Section 3291, Rev. Laws Vt., provides, in respect to private corporations, that no debts shall be contracted by the cor· poration exceeding in amount two-thirds of the capital stock actually paid in, and any director assenting to the creation of such indebted· ness shall be personally liable for the excess; and section 1067 provides that actions founded on a contract, express or implied, may be commenced by trustee process. This action is brought against the defendants, as directors of the Bennington Woolen-mills,' a private corporation, to which this provision of the Revised Laws applies, to en· force their liabilitv thereunder for an excess of indebtedness over the amount of capitat"stock paid in, assented to by them, and has been commenced by trustee process. Motions have been made and heard to dismiss the suit as not founded on a contract, express or implied, and therefore not authorized to be commenced by trustee process. The liability of the directors is placed directly, by the statute, upon their assent to the creation of the indebtedness. They are to be presumed to know this law, and to know that, when they assent to the creation of such indebtedness, they assent to a liability ontheir part for the of such indebtedness above the paid-up capital. The liability is not imposed because of anything done or omitted, apart from the making of the contract constituting the debt, but on ac· ·count. of the part taken by the directors in making that ctontract. By assenting to the act which makes the debt, tbey make themselves liable for the part of the debt that exceeds the capital. This part of the debt is prohibited, bu t not so, nor claimed to be so, but that it is upon the corporation. The contract creating the debt is not so illegal as to be void, and the assent of the directors is not. Their liability appears to be founded on their assent, which is in its nature .a cont,ract. In the charter of the Jamaica Leather Company (LawsVt. 1858) it was provided that this company should not, at any time, contract
debts exceeding three-fourths the amount of its capital paid in; antI that, if such indebtedness should exceed the amount aforesaid, the directors and stockholders should be personally holden to the creditors of said company. An action was brought to enforce this liabilityagainst stockholders, and the nature of the obligation came up for consideration. Windham Provident Inst. v. Sprague, 43 Vt. 502. In speaking of the stockholders, Ross, J., in delivering the opinion of the court, said: "They can keep the indebtedness of the company within the limits fixed by the legislature, or they can extend that indebtedness beyond that limit, and voluntarily take upon themselves the relation of joint debtors to the creditors of the company." ThiH construction, by the highest court of the state, of statutes of the state so similar, is controlling, (Flash v. Conn, 109 U. S. 371; S. C. 3 Sup. Ct. Rep. 263;) and this construction does not appear to be in conflict with decisions in other states. Where a liability is declared for some act or neglect in no way connected with the contracting of the debt, as for neglecting to file reports, it is undoubtedly penal, (Wiles v. Suydam, 64 N. Y. ;1.73; Bank v. Bliss, 35 N. Y. 412; Garriston v. Howe, 17 N. Y. 458 r Halsey v. McLean, 94 Mass. 438;) but where, as here, the liability for the debt arises out of the assent to the contraGt creating the debt, it would seem to be that of a contracting debtor, and no case to the contrary has been noticed. Motions denied.
and others v. NEW
L. E. & W. R. Co.1
(Oircuit Oourt, E. D. Pennsylvania. October 23,1886.)
CARRIERS-OF GOODS-PENNSYLVANIA STATUTE OF JUNE 13. 1874-GOODS TAKEN UNDER PROCESS. Under the Pennsylvania statute of June 13, 1874, (Purd. Dig. [Ed. 1885] 146. pI. 8,) common carriers and other bailees are not responsible to the owner of goods, wares, and merchandise intrusted to them, nor to the holder of the bill of lading or other receipt for the same, when the goods, etc., are taken from them by legal process.
Opinion in Case Stated. Plaintiffs were commission merchants, doing business in Philadelphia. They made advances on six bills of lading, issued by the defendant at Mansfield, Tioga county, Pennsylvania, for hay, oats, etc., shipped over their road. The consignor obtained the goods fraudulently. When the owners discovered the frauds, they issued attach. ments under the Pennsylvania statute of July 12, 1842, (Purd. Dig. 989,) and seized two car-loads of hay which had not left Mansfield. The car-load of oats was seized at Elmira, New York, under two atby C. Berkeley Taylor, Esq., of the Philadelphia bar.