Case ID: mass_14/html/0246-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Franklin Glass Company versus Thomas White
    An action does not lie for an incorporated manufacturing company against a stockholder, for the recovery of assessments laid by the company.
    This was assumpsit by the plaintiffs, a company incorporated for the purpose of manufacturing glass, against the defendant, a member of the company, to recover the amount of sundry assessments made by the company on the several shares of their capital stock.
    The action was submitted to the decision of the Court, on certain agreed facts. The company was incorporated by an act passed the 6th of February, 1812, with power to hold real and personal estate to a certain amount respectively, and with “ all the powers and privileges, and subject to all the duties, requirements, and disabilities, prescribed and contained in an act, entitled An Act defining the general powers and duties of manufacturing corporations.” 
    
    Amongst the provisions of this last-mentioned act there is one authorizing such companies to assess all requisite sums of money upon the several shares, and in case of non-payment of such assessments by any proprietor for thirty days after the time set for the payment thereof, the treasurer is authorized to sell at auction the share or shares of such delinquent proprietor, sufficient to pay, &c.
    The plaintiffs duly organized themselves under their said incorporation on the 1st of March, 1812. On the 31st of March, 1815. the defendant became the owner of one share of the capital stock of the company by purchase. On the 23d of May, 1815, the said corporation made a regular assessment of 125 dollars on each share, on the 12th of June following, another assessment of 50 dollars on each share, and afterwards a third assessment of 50 dollars, payable at certain times fixed by the corporation.
    *The defendant was present, and acted as a stockholder at the meetings of the corporation at which the said assessments were made; had often before expressed his desire, to have money assessed, to pay „the debts of the company ; and he afterwards expressed his satisfaction with what had been done, the said assessments being necessary for the discharge of the debts of the company.
    The defendant had been duly requested to pay the said assessments, and had refused so to do before the commencement of the present action.
    On the facts thus stated, it was agreed that judgment should be rendered upon default or nonsuit, as the opinion of the Court should be upon the right of the plaintiffs to recover in this action.
    
      Ashmun, for the plaintiffs,
    was aware that the case of The Andover and Medford Turnpike Corporation vs. Gould 
       would be relied on in the defence ; but he contended that a substantial difference might be shown between the two cases. The making and maintaining of a turnpike road is an affair of public concern and public convenience, seldom entered upon or prosecuted for the sake of the profit contemplated to arise to the undertakers; and they cannot lawfully effect their object without authority from the legislature. Whereas a company of manufacturers cannot be presumed to have any object in view but their private or personal
    
      gains. They could lawfully carry on their business without legis- ' lative interference ; and they ask for an incorporation merely for the greater convenience in managing their affairs.
    By Stat. 1810, c. 131, a creditor of any turnpike, or other corpo ration having power to receive toll, may cause the franchise of such corporation, with any other corporate property, to be seized and sold on execution; and this is the utmost remedy furnished to the creditors of such corporations ; whereas, by the statute of 1808, c. 65, above referred to, if an incorporated manufacturing company shall neglect for fourteen days to show to an officer, having an execution against the corporation, * sufficient property to satisfy such execution, he may levy the same upon the body or bodies, and the real and personal estate or estates, of any member or members of such corporation. Here is certainly a very essential difference between the two classes of corporations, and which has considerable bearing upon the point in question.
    These manufacturing companies, having authority to pledge the personal credit and estate of each individual member, as fully as those of a joint company of merchants or traders unincorporated, are pledged for the fulfilment of their contracts. It should seem, if the corporation pay any money in discharge of such contract, that they should have the same remedy against the individuals for an indemnity as the creditors had before such payment.
    The reason given by the court in Andover, &c., vs. Gould, why assumpsit does not lie to enforce the payment of assessments, is that the act incorporating the proprietors of the turnpike prescribes the only mode in which such payment shall be enforcéd, viz., by the sale of the shares; and the court observe that it must be pn. ■ sumed that the legislature considered this an adequate remedy ; for it cannot be supposed that corporate powers were applied for to subject the adventurers to a probable loss.
    In the act of 1808, there are no words negativing the remedy sought for in this action ; and the principles of the common law and of common right are strongly in favor of it. It is laid down by Espinasse, in his digest, and the cases cited in support of the proposition go the full length of it, that “ if a person becomes a member of any society or company, he thereby agrees to abide by all legal claims arising against him from the by-laws or local regulations of that society to which he belongs.” 
    
    
      Allen for the defendant.
    
      
      
        Stat 1811, c. 96.
    
    
      
      
        Stal. 1808, c. 60.
      
    
    
      
      
         6 Mass. Ttrp. 40
      
    
    
      
       1 Esp. Dig. 7. — Barber-Surgeons’ Company of London vs. Pelson, 2 Lev 252 Mayor of London vs. Story, Carik, 92.
    
   By the Court.

We cannot perceive sufficient distinction between the present case and that of the Andover, &c., Turnpike vs. Gould, to justify us in giving to this a #different decision. By the act concerning manufacturing corporations, the sale of the shares of those proprietors who are delinquent in paying their assessments is the only remedy provided for the corporation ; and the provision is made in almost the very same words as are used in the general act respecting turnpike corporations.

In the case cited from Espinasse, the penalties or assessments were set upon the persons, not upon the shares, as is the case under our statutes. Nor does it appear that any specific mode was provided in those cases to enforce payment; whereas it was laid down by Chief Justice Parsons, in delivering the opinion of the Court in Gould’s case, before referred to, “ as a rule founded in sound reason, that, when a statute gives a new power, and at the same time provides the means of executing it, those who claim the power can execute it in no other way.”

The remedy provided for creditors of these manufacturing corporations, against the bodies and estates of the individual corpora-tors, does not prove that the corporations have the same remedy against their members.

It is true that a private company of merchants, not incorporated, have their remedy against one of their company who does not furnish his agreed share of the stock; but all the rights and duties of such an association aré by the common law; whereas the plaintiffs’ are created by statute, and must derive all their rights and remedies from the provisions of the statute.

Plaintiffs nonsuit.