Case ID: sc-eq_20/html/0209-01.html
Source: Caselaw Access Project
Author: {"author": "Harper, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Ex’ors. of Haslett et al. v. Wotherspoon et al.
    
    Where an association becomes incorporated, and the incorporation accepts an assignment of all the property of the association, for the purpose of carrying out their object, they are primarily liable for their debts. .
    Where the assets of a corporation are not sufficient to satisfy all its creditors, the individual corporators are individually liable to make good the deficiency, including that which may arise from the insolvency of any of the corporators, to the extent of the capital professed to be paid in, as set forth in the charter.
    Capital properly means the property which one has, clear of debt.
    A corporation, and its corporators, individually, are liable for the interest on simple contract debts recovered against them at law, and for the costs of the suits for their recovery, provided that the aggregate sum of their liabilities (these included) shall not exceed the amount of capital which they professed to be paid in, as setforth in the charter.
    If an association, formed for any purpose, afterwards becomes incorporated, there must be some act or expression on the part of the individuals of tire association, to signify their acceptance of the charter, in order to charge them in the character of corporators.
    This case, which came up for a final hearing in February, 1847, at Charleston, will be best understood from the following full report of the pleadings:
    STATE OF SOUTH-CAROLINA, Charleston District. In Chancery.
    
      To the Honorable the Chancellors of the said State :
    
    Humbly complaining, shew unto your Honors, your orators, John Haslett, Alexander Robinson and William Lloyd, executors of the last will and testament of John Haslett, Esq., of the city of Charleston, deceased, for and on account of themselves, and all other creditors oí the Charleston New Theatrh Company, who shall come in and contribute to the expense of this suit; that, heretofore, to wit, in the year 1835, a number of gentlemen in the city of Charleston, defendants in this suit, voluntarily associated themselves together as members of a Joint Stock Company, for the purpose of building a theatre in the said city, by means of funds to be raised by themselves ; and at a meeting of the subscribers to this project, held on the 10th day of March, 1835, it was resolved, that 'a committee of five trustees should be elected from amongst the said subscribers, to manage all matters connected with the building of the said theatre, and generally to act for the interests of all concerned in furthering the objects of their association ; whereupon, the following gentlemen were duly elected trustees, to wit: Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cogdell and William A. Carson, Esqs. who forthwith proceeded to the discharge of the various du ties devolved on them, as the managing committee of the said theatre company: that the said trustees, on behalf of themselves and their associates, having contracted to purchase a lot of land as a site for the theatre, it was resolved, at a meeting held by them, on the 12th day of March, 1835, that they would immediately proceed to procure plans, and estimates for contracts, for building the said theatre, according to a general plan then adopted by them: that in consequence of an invitation to that effect, proposals were soon after submitted to the said trustees, by Messrs. Fogartie & Sutton, bricklayers, for the brick work necessary for the building of the said theatre, for the sum of fourteen thousand dollars, and by Messrs. Ephriam Curtis and Company, carpenters, for the wood work necessary thereto, for the sum of thirteen thousand five hundred dollars; which said proposals were accepted by the said trustees, on the 17th day of February, 1837, and were after-wards embodied in the shape of written agreements between the said trustees, for and on account of themselves and their associates, of the one part, and the said contractors, Fogartie & Sutton, and Ephriam Curtis and Company, respectively, of the other part: that the said contracts for building the said theatre, were faithfully performed, to the entire satisfaction of their employers, the trustees aforesaid, who, from time to time, paid large sums of money to the said Fogartie & Sutton, and Ephriam Curtis and Company, on their building contracts aforesaid, by the hands of George W. Logan, Esq., who had been appointed by said the trustees, as the treasurer of the said Theatre Company: that on the 27th day of Februry, 1838, Ephriam Curtis, of the firm of Ephriam Curtis and Company, for money then due them by the said Theatre Company on their contract above mentioned, gave his draft to Francis Lance, Esq., for the sum of fifteen hundred dollars, payable thirty days after date, on George W. Logan, treasurer as aforesaid, which said draft was duly accepted by the said George W. Logan, as the treasurer of the said Theatre Company, but not paid at maturity, for want of funds: that on the tenth day of March, 1838, Robert Wotherspoon, Esq., then Chairman of the Board of Trustees, for the" purpose of paying Messrs. Fogartie & Sutton a large sum of money then due them on their contract aforesaid, gave to the said Fogartie &> Sutton his draft for the sum of two thous- and dollars on George W. Logan, treasurer, payable eight days after date, and chargeable to the account of the said building contract of Fogartie <fc Sutton, which draft was also duly accepted, but not paid at maturity, for want of funds: that the said drafts are now the property of your orators, as executors of the last will of their testator, John Haslett, as part of the assets of his estate left by him at his decease.
    Your orators further shew unto your Honors, that after the said contracts were entered into between the said trustees and the said contractors, Fogartie & Sutton, and Ephriam Curtis and Company, in fact, after the theatre itself had been erected, and ready for use, to wit — on the 17th day of December, 1837, the said .trustees, Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cogdell and William A. Carson, Esqs., and their associates in the said Theatre Company, were incorporated by the Legislature of South Carolina, a body corporate, for the purpose of building and conducting a theatre in the city of Charleston, by the name and style of the Charleston New Theatre Company, with a then capital of sixty thousand dollars: that the charter so granted was duly accepted at a meeting of the subscribers to the association aforesaid, held on the 28th day of February, 1838, in pursuance of a call to that effect in the several newspapers of Charleston, and that the said Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cogdell and William A. Carson, Esqrs. were continued in the managing direction of the said corporation, under their former style of trustees, and were, from time to time, elected by the said company, as the trustees or directors thereof, until the company became utterly insolvent, and ceased to meet for the transaction of any business connected with the said theatre.
    Your orators further shew unto your Honors, that their testator, confiding in the solvency of the said incorporated company, which was held out to the world in their charter, with an actual and paid in capital of sixty thousand dollars at the time of their incorporation, brought an action at law against the said Charleston New Theatre Company, on the drafts aforesaid, in which action a vefdict was had for the plaintiff therein, and judgment entered up against the said Theatre Company, on the first day of February, 1840, for the sum of $4,016 95, of which sum the amount of $1500 was afterwards, to wit, on the 21st day of Febuary, 1841, paid to your orators’ testator, in part satisfaction of the debt due on said judgment, by George W. Logan, Esq., treasurer of the said company, by whom all previous payments had been made on the contracts aforesaid, out of which the said debt aros.e.
    And your orators have been advised, that the confidence of their testator, that the said Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cogdell and William A. Carson, and their associates in the said incorporated Theatre Company, possessed at the time of their incorporation an actual capital of sixty thousand dollars, was well and truly founded on the plain intent and meaning of their charter, and was strengthened, also, by the fact, that the Legislature had taken no precaution to provide for the paying in of the said capital, or any part thereof, prior to and before the said individuals should be allowed to exercise their corporate privileges, nor imposed any personal responsibility of a pecuniary kind on the members of the Company, as the Legislature had taken special care to provide in the case of other associations incorporated by the same Act.
    And your Orators further shew unto your Honors, that the execution which issued on the judgment aforesaid, against the goods and chattels and real estates of the Charleston New Theatre Company, has been returned by the Sheriff of Charleston District, unsatisfied; because he could find no property, real or personal, belonging to the said Company, out of which the money due on the said execution could be made.
    And your Orators in fact shew unto your Honors, that the said Theatre Company is hopelessly insolvent; and that they have no visible means of paying their debts, except their building, the New Theatre, the fee simple of which, subject to the mortgages thereon, has been lately sold under an execution against the said company for a small sum of money, without paying any part of your Orators’ debt; and that the said Company have ceased to hold any meetings for the trans action of business, or the election of officers for several years past, and that the said Company is, to all practical purposes, entirely dissolved by their own acts ; possessing at present neither the ability nor the disposition to carry their original project into execution, and against whom a judgment in law, or a decree of this Honorable Court, would be of no more avail to your Orators in obtaining payment of their debt, than would be a judgment against any admitted pauper.
    As your Orators further shew unto your Honors, that at the time the said Robert Wotherspoon, James Rose, Henry Gouxdin, Richard W. Cogdell, William A. Carson, and their associates, were incorporated, the said Theatre association were actually indebted to a large amount for the building of the said Theatre, on the contracts aforesaid, made by their managing Committee, the said Trusstees, who have, since the Act of incorporation, assigned and transferred to the said incorporated Company, all the real estate which they held as Trustees of the Theatre association aforesaid.
    And your Orators further shew unto your Honors, that they have been advised that no Act of incorporation could relieve the said Trustees and their associates from the payment of debts, which they owed for the construction of the said Theatre, on contracts made between the said Trustees and the said Fogartie and Sutton and Ephraim Curtis and Company ; and least of all, that no act of the said Trustees and their associates can divest them, so far as the rights of your Orators are concerned, of a liability which .attaches to all and every member of the said Theatre association on their contracts made by the said Trustees, as a committee in behalf of the said association; and although your Orators have been advised that the said Trustees are personally and individually liable on the contracts made by them for building the New Theatre, yet your Orators, actuated by a sense of justice which revolts at enforcing their claims only against those who have in good faith acted as the agents of others, who are equally liable with themselves, have been induced to forego any such remedy against the Trustees merely, and to appeal to your Honors for such relief against the said Trustees and their associates, as the nature of the case requires, in justice and good faith to all the parties concerned.
    And your Orators have accordingly, both by themselves and their agents, applied to and requested the said Trustees and (heir associates, defendants in this cause, to pay them the several sums of money due them on the contracts made by the said Trustees with Fogartie and Sutton, and with Ephraim Curtis and Company, as above mentioned; and your Orators well hoped that such, their just and reasonable requests, would have been complied with, as injustice and equity they ought to have been ; but now so it is, may it please your Honors, the said Trustees and their associates, contriving how to injure and oppress your Oraters in the premises, absolutely refuse to comply with your Orators’ aforesaid reasonable requests. And to countenance such their unjust conduct, they the said Trustees and their associates, pretend that they are not personally liable for any contracts or agreements made by the said Trustees, for building the said Theatre, but that their liability is restricted to the payment of their individual subscriptions, which they have already paid m to the joint fund, and beyond which payment they never agreed or expected to be bound for any expenditures growing out of the building of the said Theatre; whereas your Orators charge the contrary to be true, and that each and every member of the said Theatre association is liable in his own private estate for the entire debts incurred by them for building the said Theatre, on contracts entered into before their incorporation: And that as to subsequent creditors who trusted the Charleston Theatre New Company on the faith of their charter, your Orators charge that the Stockholders of the said Theatre Company are compellable in this Honorable Court, in favor of their creditors, to make up among themselves so much of their capital of sixty thousand dollars, as the said Company has not actually expended in building and conducting a Theatre in Charleston, and to hold the same as a fund to which the said creditors may have recourse for the payment and satisfaction of their debts against the said Company, which they had trusted on the full assurance of their possessing such an amount of capital actually paid in, before the granting and acceptance of their charter. All which actings, doings and refusals of the said Trustees and their associates, are contrary to equity and good conscience, and tend to the manifest wrong and injury of your Orators.
    In consideration whereof, and for as much as your orators are without remedy in the premises at Common Law, and cannot have adequate relief except in the Court of Equity, where matters of this sort are properly cognizable and relievable. — to the end, therefore, that the said trustees, Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cog-dell and Win A. Carson, and their associates in the said Theatre Company, who are impleaded in this Honorable Court, for and on account of themselves, and other members of the said association, who are not made personally parties to this suit, by reason- of the delay, vexation and difficulty that would inevitably result from any attempt to bring such numerous parties before the court, may, upon their several and respective corporal oaths, according to the best and utmost of their several and respective knowledge, remembrance and belief, full, true, perfect and distinct answers make, to all and singular the matters aforesaid, and that as fully and particularly as if the same were here repeated, and they thereunto severally and respectively distinctly interrogated; and more especially, that the said trustees and their associates may, in manner aforesaid, answer and set forth whether the said Trustees did not, on or about the 27th day of February, 1837, or at some other time, enter into certain contracts with Messrs. Fogartie and Sutton, bricklayers, and Messrs. Ephraim Curtis and Company, carpenters, for the building of the New Theatre in Charleston, as your orators have hereinbefore set forth; and whether the said trustees were not parties to the said contracts, for and on account of themselves and their associates, subscribers for building a Theatre in Charleston; and whether they did not, from time to time, by their Treasurer, George W. Logan, Esq. pay large sums of money to the said Fogartie and Sutton, and Ephraim Curtis and Company, for and on account of the said building contracts; and whether the said drafts accepted by the said Logan, as aforesaid, were not for and on account of monies due to the said contractors for their work, labor and materials used and employed in building the said Theatre, and furnished at the request of the said trustees, and whether the said drafts have ever been paid, except partially by a payment of $1500, made by George W. Logan, Esq. Treasurer, on account of the said debt to your complainants’ testator, on the 21st day of February, 1841; and whether your orators have not, by themselves and their agents, made such application and requests as are hereinbefore in that behalf mentioned, and whether the said trustees and their associates have not, each and all of them, refused to' comply therewith, and why; and that the said trustees and the rest of the members of the said Theatre association may be compelled, by and under the decree and direction of this Honorable Court, to pay to your orators whatever may be found due to them on the drafts aforesaid; and that, for and on account of such parties who may hereafter come in as aforesaid, and who are only creditors of the Charleston New Theatre Company as a body corporate, the said defendants may account for the amount of capital that has been paid in by them, as stockholders thereof, and declare whether the same has been expended in building and conducting a Theatre in Charleston; and distinctly set forth what, in fact, was the amount of their capital at the time of their incorporation, and how the same has been invested ; and whether any call has been made upon the stockholders, to make up among themselves, by assessment or contributions, the amount of sixty thousand dollars, or, at least, so much as, with the property of the Company, may be sufficient to pay their debts; and that the said defendants, as stockholders of the said Charleston New Theatre Company, may be directed, by and under the decree of this Honorable Court, by contributions and assessments among themselves, to make up the whole amount of their capital set forth in their charter, not expended in building and conducting a Theatre in Charleston, for the purpose of paying the debts of the said Company, and to hold the same as a trust fund for the benefit of their creditors, who have, in good faith, trusted them, on the reasonable belief that they actually had, at the time of their incorporation, that amount of capital which their charter held them out to the world as possessing; and that your orators may have such other and further relief in the premises as to your Honors shall seem meet, and the nature and justice of the case may require.
    
      May it please your Honors to grant unto your orators a writ of subpoena, to be directed to Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cogdell, and William A. Carson, trustees and stockholders of the Charleston New Theatre Compeny; and to William Aiken, Daniel Blake, Ker Boyce, Thomas A. Coffin, John Crawford, John Fraser, Joseph E. Glover, James Hamilton, Wade Hampton, Leon Herckenrath, William C. Heyward, Moses D. Hyams, Joseph Lawton, Vincent Le Seigneur, David C. Levy, George W. Logan, Thomas O. Lowndes, Charles A. Magwood, N. Russell Middleton, and Ralph J. Middleton, executors of Arthur Middleton, Henry A. Middleton, Oliver H. Middleton, Thomas Milliken, Otis Mills, Moses C. Mordecai, Reuben Moses, William Patton, James L. Petigru, James Rose, Ralph S. Izard, and Stephen D. Doar, executors of Thomas Pinckney, Robert Pringle, Lewis A. Pitray, William Ravenel, Samuel P. Ripley, Thomas J. Roger, Thaddeus Street, John Strohecker, Abraham Tobias, Elias Vanderhorst, Joshua J. Ward, Charles Warley and Aaron S. Willington, members and stockholders in the said company, commanding them, at a certain day, and under a certain penalty, therein to be limited, personally to be and appear before your Honors, in this Honorable Court, and then and there full, true, direct and perfect answer make to all and singular the premises, and further, to stand to, perform and abide such further order, direction and decree therein, as to your Honors shall seem meet.
    And your orators will ever pray, and so forth.
    STATE OF SOUTH CAROLINA, Charleston District. ^ In Chancery.
    The answer of James Rose, Henry Gourdin, Richard W. Cog-dell, William A. Carson, William Aiken, Daniel Blake, Thos. A. Coffin, John Crawford, Wade Hampton, Leon Herckenrath, William C. Heyward, D. C. Levy, T. O. Lowndes, Charles A. Magwood, H. A. Middleton, O. H. Middleton, Otis Mills, M. C. Mordecai, Reuben Moses, J. L. Petigru, William Ravenel, Lewis Trapman, Elias Van-' derhorst and Joshua J. Ward, defendants to the bill of complaint of John Haslett, Alexander Robinson and William Lloyd, executors of the last will and testament of John Haslett, deceased.
    These defendants, now and at all times hereafter, saving and reserving to themselves all and all manner of advantage and benefit of exception, to the manifold errors, uncertainties and insufficiencies, in complainants’ said bill contained, for answer, nevertheless, thereto, or to so much thereof as they are advised is material for them to answer unto, say:— That they admit that in the year 1835 these defendants united with divers other persons, to form a company for building a Theatre, and signed a memorandum to pay the sum of 500 dollars, for the several shares opposite their several names. That the subscribers appointed a committee to manage the business of the Company, and that Robert Wotherspoon and these defendants, James Rose, Henry. Gourdin, Richard W. Cogdell and William A. Carson, were named as the members of that committee, who assumed the agency committed to them, and appointed George W. Logan Treasurer and Secretary ; purchased a lot for the site of a Theatre, and contracted with Fogartie & Sutton, bricklayers, and Curtis & Co. carpenters, severally, for erecting the building, as alleged in complainants’ bill; and that the said R. Wotherspoon, James Rose, Henry Gourdin, R. W. Cogdell, and W. A. Carson, were authorized, as the agents of the subscribers to the Theatre, to make the said contracts. That they have heard and believe that George W. Logan, as the Treasurer and Secretary of the Company, did accept a draft of Ephraim Curtis for 1500 dollars, and did also accept a draft of Robert Wotherspoon, in favor of Fogartie & Sutton, for 2,000 dollars, and that the said bills or drafts were drawn on account of moneys really due and owing to Curtis & Co. and Fogartie & Sutton, respectively, on account of the contracts made with them by the committee aforesaid. And these defendants have heard and believe that the said bills were endorsed to the late John Haslett, the complainants’ testator.
    These defendants admit that by an Act passed on the 20th day of December, 1837, the aforesaid Robert Wotherspoon, and these defendants, James Rose, Henry Gourdin, Richard W. Cogdell and W. A. Carson, and their associates, were incorporated by the style and title of the Charleston New Theatre Company, with a present capital of 60,000 dollars, with the privilege of increasing the same to 100,000 dollars, and the corporate franchise so granted was accepted by the subscribers to the Theatre; and that the same Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cogdell and William A. Carson, afterwards, by the choice of the members, acted as the trustees of the corporation.
    These defendants admit that the said John Haslett sued the Company, by its corporate name, and recovered a judgment against them, on the bills or drafts endorsed to him as aforesaid by Fogartie & Sutton and Curtis & Co. and that a considerable sum is still due on the said judgment; and that the Charleston New Theatre Company is altogether insolvent ; that the Theatre, itself, has been sold, subject to the mortgages made for securing certain large debts of the Company, and possession is held by the purchaser; and that since the said sale the company has done no business, nor performed any corporate act.
    These defendants admit that the associates in the company which was formed for building a Theatre, as hereinbefore mentioned, did not raise or contribute the sum of 60,000 dollars, to the purposes for which they were associated. But these defendants, in fact, say, that the whole amount of subscription paid by the members of the company, as they believe, was 37,315 dollars. That of the subscribers, some, to wit: the defendants, William A. Carson and William Aiken, paid, each, 1500 dollars, or the price of three shares. That others, to wit: these defendants, James Rose, Henry Gourdin, John Crawford, Reuben Moses, Daniel Blake, Thomas A. Coffin and Wade Hampton, and certain other subscribers, to wit: Thomas Pinckney, James Hamiltojr, Isaac E. Holmes, R. M. Allen and Joseph Edward Glover, paid, severally, the sum of 1000 dollars, or the price of two shares; and this defendant, Elias Yanderhorst, paid 750 dollars, or the price of one share and a half share; and all the other members, for one share subscribed; and of the amounts subscribed the whole was paid, as these defendants are informed and believe, except the sum of about 1,235 dollars, none of which is owing by any of these defendants.
    And these defendants, in fact, say that the cost of the building, furnishing and opening the Theatre, amounted, as these defendants believe, to 70,410 dollars, leaving a large amount of debt for which no provision has been made, and which has increased by the accumulation of interest and damages.
    And these defendants admit that the debts of the company, whether contracted before or since the incorporation, ought to be honestly paid, and that as part of said debts is secured by mortgages of the Theatre, those mortgages should be satisfied out of the mortgaged property, as iar as the same will go, and that the residue of the debt, whether secured by mortgage, judgment, bond, or simple contract, should be raised and paid by the members rateably.
    And these defendants submit to do and perform all and whatsoever this Honorable Court may order in the premises, and they deny all fraud, and pray to be hence dismissed with their reasonable costs.
    
      STATE OF SOUTH CAROLINA, ) - Chancerv Charleston District. $ ln °üancery-
    The answer of Ker Boyce, who has been impleaded with James Rose and others, to the bill of complaint of John Haslett and others.
    This Defendant, now and at all times hereafter, saving and reserving unto himself all advantage and benefit of exception to the many errors and uncertainties in the complainants’ said bill of complaint contained, for answer, nevertheless, or unto so much and such parts thereof as this defendant is advised is or are material or necessary for him to make answer unto, answering says : That some persons in the City of Charleston, actuated by a feeling of public entef prise, having desired to build a Theatre in the City of Charleston, applied to this defendant, and induced by the said application, he subscribed for the sum of five hundred dollars, which amount he has fully paid and satisfied.
    And this defendant further answering says, that at the time when he consented to subscribe the aforesaid sum of money, and when he paid the same, he did so under and by virtue of the agreement he made to that effect, in signing his name to a certain paper in which the amount of his subscription was set down, and the purpose for which the same was intended. And this defendant further answering says, that the agreement by which the parties to the said paper respectively were bound, never was intended to have, nor could the same have, any further obligation than continued while the said sum of five hundred dollars was unpaid, and was discharged when that amount was paid to the person authorized to receive the same. That in the said paper, the amount of the liability of such subscriber who has performed his part of the contract, by the payment of the money, cannot be affected by any new liability, without manifest wrong and injury.
    And this defendant further answering says, that he knows nothing of the means or purposes by or for which a charter of incorporation was obtained by an Act of the'Legislature of this State, in behalf of the parties who were subscribers to the said paper containing the amounts to be paid by each individual who was a party to the same. That no charter of incorporation could in any wise modify or affect the rights of the parties whose names were so signed, without their express assent. And this defendant expressly says, that he never did in any manner assent, nor was he at any time required to assent, to any proposition which involved a change of the original agreement, or enlarged a liability on the part of this defendant, for a larger sum than he had agreed to pay.
    
      And this defendant says, that he does not know that the charter of incorporation, stated to have been obtained for the purposes of those who were engaged in building the Theatre, did increase the liability of those parties whose names were signed to, the paper herein before refrred to ; but that if it does, it could not operate on this defendant, without his acceptance of the charter, either by previous or subsequent assent. Neither of which has he ever done.
    And this defendant further answering says, that he has every reason to believe that the parties who contracted for and undertook the building of the Theatre, well knew the nature of.the agreement existing between those who have engaged to contribute the certain amounts set forth in the paper herein before referred to. And that by such knowledge they were well informed that the subscribers to the said paper were bound in a certain sum respectively ; and that it was not intended at the time of subscription, or at any other time, that the said parties should, by or through that agreement so made, for the payment of the said several sums of money respectively, and which have been paid, be bound or held liable for any other or further sum of money.
    And this defendant further answering says, thathe respectfully submits, that the parties complainants in the said bill of complaint filed in this case, have by their own act and deed, conclusively shewn that they did not expect to receive or require payment of any debt or debts that might be due or owing to them in the manner now claimed in the said bill of complaint. That according to their own statement, the parties to whom the said debt was originally due and owing, at different times, drew certain drafts, or in other cases received certain drafts drawn on George W. Logan ; that the said drafts were duly accepted, and the same, in the form of negotiable paper, passed from the hands of the said parties, and were, for valuable or sufficient consideration, transferred to John Haslett, the testator of the complainants in the bill of complaint filed in this case. And this defendant submits, that in the taking and receiving of these drafts, which were by the original contractors as builders transferred to third persons, the parties holding these drafts have no remedy except against the parties who are by law bound for the payment of the drafts then given and accepted by the original contractors, and by them transferred to third persons. And this defendant says, that the debt to the said contractors was discharged by the drafts thus given, and after the parties have consented to be satisfied in this mode, subseifuent holders of these drafts cannot, and are not in justice entitled to assert any privity of contract between themselves and the parties who originally were bound for thepayment of a specific sum >of money, or who are, by virtue of the payment of their proportion agreed to be paid, and paid, members of the corporation.
    And this defendant further answering says, that it is true that in the year of our Lord , certain persons therein named were by an Act of the General Assembly, as also their associates and successors, declared a bod}?- politic for the purpose of erecting and conducting a Theatre in the City of Charleston, by the name and style of the Charleston New Theatre Company, with a present capital of sixty thousand dollars, and the privilege of increasing the same to one hundred thousand dollars. But this defendant respectfully submits, that if it be considered that the possession of the sum of sixty thousand dollars was a condition precedent, and to be performed before the act of incorporation would benefit the parties asking for the same, then, inasmuch as the .same has never been complied with, the act of incorporation has not yet had legal operation.
    That this defendant then stands in the position he held before the charter so applied for, which was his agreement to pay a certain sum, with which he has complied.
    And if the parties named as trustees, and the contractors, entered into hazardous speculations before a sufficient fund was paid in, this defendant should not be asked or required to make up a deficiency thus created. But if it be considered that the capital sum was not a condition precedent, but a penalty that attached upon all who were members of the New Theatre Company, then inasmuch as it is an important alteration of the original agreement to which the parties signed their names, it cannot be considered binding upon any except those who have distinctly and expressly assented to the same.
    And this defendant avers, that he has never so done, nor understood that he was required or expected so to do.
    And this defendant denies all and all manner of combinations, <fcc.
    STATE OF SOUTH CAROLINA, Charleston District. In Chancery.
    The joint and several answer of Louis A. Pitray and Thomas J Roger, two of the defendants to the bill of complaint of John Haslett, Alexander Robinson, and William Lloyd, executors of the last will and testament of John Haslett, deceased, complainants.
    These defendants, now and at all times hereafter, saving and reserving to themselves all and all manner of advantage and benefit of exception to the manifold errors, uncertainties and insufficiencies of the complainants’ said bill of complaint, for answer, nevertheless, thereto, or to so much thereof as these defendants are advised that it is in anywise material or necess ary for them to make answer unto, answering say: They admit that they did, sometime in or about the year of our Lord 1835, severally subscribe a paper by which they individually agreed to contribute the sum of five hundred dollars each, for the purpose of erecting a new theatre, for dramatic performances, in the city of Charleston; but they say, that they have long since paid the whole amount of their said several subscriptions, and that neither by the terms of the said agreement, nor by any other act of their own, did these defendants, or either of them, ever agree to contribute, or authorize the said Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cog-dell and William A. Carson, in the complainants’ bill mentioned, or.any other person or persons whatsoever, to render them, or either of them, liable beyond the amount of then-several subscriptions aforesaid, to, for, or by reason of any contract or engagement, in relation to the erection of the said theatre. In fact, these defendants had no view to profit, or an investment, in making their said subscriptions, but intended the same as a contribution, for which no return was anticipated, for the purpose of erecting a public edifice. This defendant, Louis A. Pitray, being at the time of his said subscription on the eve of removal to France, where he has ever since resided, stated, when he subscribed the paper aforesaid, that his subscription was “a gift;” and this defendant, Thomas J. Roger, upon being afterwards informed that he was a shareholder, subscribed a paper by which he gave all his interest in the theatre to Mr. Abbott, who was at that time the manager thereof: and neither of these defendants ever attended any meeting of the alleged Joint Stock Company, joined in the application for or acceptance of the charter of incorporation, in the complainants’ said bill mentioned, or participated, directly or indirectly, in any act or contract, either of the said Joint Stock Company, or corporation; and they deny all liability, on the part of them, or either ox them, by reason of any such act or contract.
    And these defendants, further answering, say, that they know nothing, of their own knowledge, of the proceedings of the said company or corporation, in complainants’ bill mentioned, nor of the alleged contracts, and the judgments thereon, upon which the complainants claim relief against these defendants. These defendants presume the facts may be as stated in complainants’ bill; but they deny any liability on their parts, by reason of the said contracts, and are advised, and respectfully submit, that if such contracts are binding on any other person, or persons,' than the parties to them, they are at least wholly unauthorized as far as these defendants are concerned. And they further submit, that whatever may have been the original obligations of the said contracts, the same were merged in the judgments thereon entered up against the said corporation; and that even if these defendants were lawfully bound as members of the said corporation, yet neither by the terms of the charter, nor by the general law of the land, can they be made individually responsible for the debts of the corporation : nor have they, by any act or contract of their own, incurred such responsibility.
    All which matters and things these defendants are ready and willing to aver, maintain and prove, as this Honorable Court shall direct and award; without this, that any other matter or things in the said bill contained, and not herein, or hereby, well and sufficiently answered unto, confessed and avoided, traversed or denied, is true, to the’ knowledge or belief of these defendants; and they humbly pray to be hence dismissed, with their reasonable costs in this behalf most wrongfully sustained.
    Upon the hearing of this bill and answers, was pronounced the following circuit decree:
    Johnson, Ch. The following articles of association, entered into by and between the defendants, will, themselves, sufficiently show their nature and object, viz:
    “We, the subscribers, agree to unite in a company for building a theatre, to be called the New Theatre, in Charleston, and to pay for the shares placed opposite our names, at the rate of five hundred dollars per share, and to pay the same to the treasurer of the company, in such proportions and instalments as may be called for by the trustees, Robert Wotherspoon, James Rose, William A. Carson, R. W. Cogdell and Henry Gourdin, or a majority of them, or of the trustees who may be appointed to fill any vacancy in their number: Provided, that this engagement shall have no effect till forty shares are taken, and that when forty shares are taken, the said subscription shall be good for three hundred dollars per share, if so much be necessary for the purchase of the site of the theatre, and that the residue be payable as may be called for by the trustees, when seventy shares are taken.” Adopted, 10th March, 1835. ,
    It is signed by the defendants, who took amongst them something over seventy shares, amounting in all to about $37,000, the whole of which has been paid in, and disbursed in the payment of debts.
    
      The trustees named, in these articles having purchased a site, whereon to erect a suitable building, on the 17th February, 1837, entered into an agreement with Fogartie & Sutton, brick-masons, to do the brick work, and with Ephriam Curtis & Co. to do the carpenters’ work, of the said building; for which Fogartie & Sutton were to be paid $14,000, and Curtis & Co. $13,500. The work was satisfactorily finished, and accepted by the trustees. Curtis & Co., on the 27th February, 1838, gave a draft for $1,500 to Francis Lance, on Geo. W. Logan, who had been appointed treasurer of the company. The draft was duly accepted, but was not paid at maturity, for want of funds. On the 10th of March, 1838, Robert Wotherspoon. the Chairman of the Board of Trustees, gave to Fogartie & Sutton, on account of the money due them on the building contract, a draft on Logan, the treasurer, for $2,000, payable eight days after date; this was also accepted by Logan, but was not paid, for want of funds, and both the drafts were purchased by the complainants’ testator.
    The bill is filed as well on behalf of all the other creditors of the company, who may come in and contribute to the expense, and establish their demands, as of the complainants.
    And the complainants further state, that on the 20th Decern ber, 1837, after the buildmg had been finished, and was ready for use, the Legislature passed an Act constituting the trustees named in the articles of association, and their “associates,” a body politic, by the style and name of the Charleston New Theatre Company, for the purposes of conducting a theatre in Charleston, and that the said trustees were after-wards appointed directors of the said company, and continued in that office until the corporation became insolvent, and its object was abandoned.
    The bill further states, that the testator, confiding in the solvency of the corporation, brought an action at law against it, to recover the amount of these drafts, and that on the 1st February, 1840, judgment was entered for him for $4,016 95, of which $1,500 was afterwards paid by Logan, the treasurer; that an execution sued out on that judgment has been returned nulla bona, the Sheriff being unable to find any property, real or personal, whereon it could be levied, and the complainants in fact say, that the building and lot of land was all the visible property which the company or corporation possessed; that that had been transferred by the trustees named in the articles of association to the corporation, and that it had been sold underfi. fa. against the corporation.
    By the first clause of the Act of incorporation, it is enacted: “That Robert Wotherspoon, W. A. Carson, James Rose, Richard W. Cogdell and Henry Gourdin, and their associates and successors, be, and they are hereby declared, a body politic, for the purpose of erecting and conducting a theatre in the city of Charleston, by the name and style of the Charleston New.Theatre Company, with a present capital of if60,000, and with the privilege of increasing the same to $100,000.” And the bill prays that the defendants may answer, whether the capital of $60,000 was in truth paid in, — and if not, that the corporation may be compelled to contribute to pay what may be sufficient to pay the debts, or to make up the deficiency, or that the subscribers to the articles of the association, if they are other persons than the corporators, be decreed to pay the demands of the complainants by an assessment upon themselves.
    All the subscribers to the articles of association are made defendants. Robert Wotherspoon, one of them, is a certificated bankrupt, and pleads that in bar to the relief sought by the bill against him, and that must be allowed. James Rose, and twenty-four others, have answered jointly, and admit the justness of the complainants’ demand, and the liability of the members of the association for all the debts, whether contracted before or after the act of incorporation, and they state that the theatre and lot have been mortgaged for a part of the debts, and suggest the propriety of selling them to pay the debts, as far as the proceeds will extend. The corporation was also made a party, and their answer is substantially the same as that of James Rose and others.
    Iter Boyce, another of the defendants, admits in his answer that he subscribed the articles of association for $500. He states that he paid it, and insists that he is no further answerable. 1st. Because the articles never were intended to have, nor could they have, any further obligation than to_bind them to pay the sum subscribed, to the person entitled to receive the same. 2d. Because the Act of incorporation did not extend or increase the liability of the subscribers to the articles, beyond the amount subscribed, and if it could have that effect, he is not bound, because he never assented to it in any manner, before or after it was passed. 3d. Conceding the possible liability of the associates to Fogartie & Sutton and Curtis & Co., he insists that their acceptance of drafts from the corporation for the amount due, was a discharge of the liability of the associates.
    The firm of Street & Boinest were also subscribers to the articles, and they put in their defence on the grounds taken in behalf of Mr. Boyce; and so of Thomas Roger, L. A. Pi-
      tray and J. E. Glover. Judgments pro confesso have been taken against the other defendants.
    It appears from the journal of the corporation, that Miv Glover was present at a meeting of the stockholders, on the-28th of February, 1838, when a resolution was adopted, accepting the Act of incorporation, and it is very clear he was mistaken, when he said, in his answer, that he had never accepted or assented to it. His solicitor, Mr. Northrop, has subsequently filed with the proceedings a correspondence between them, which very satisfactorily shows that it originated in his forgetfulness. It does not appear that Boyce, or any of the other defendants who rest on the same defence, ever attended any of the meetings of the directors or stockholders, after the Act of incorporation, and from what I can collect from the evidence, it is, I think, very clear that the management of their affairs was confided, almost exclusively, to the directors. But it is in proof that in the Winter of 1839-40 Mr. Boyce entered into a contract with Mr. Abbott, the manager of the Theatre, to sell him his stock, on condition that “the others” (I suppose the other stockholders) would concur — for Abbott desired to purchase all the stock. Mr. Logan, the Secretary, also testified that Street, of the firm of Street & Boinest, “would several times ask him questions in reference to the business of the company,” and “ spoke to him as a stockholder.” There is no evidence of any act, on the part of Roger or Pitray, in relation to the affairs of the company, after the Act of incorporation. But judgments, pro confesso. had been taken against them, and it was not until after the argument had been gone into, that a motion to open them, and let the defendants in to answer, was made for that purpose, and granted by consent; and if it should become necessary, 1 think the complainants ought to be let into proof of their acceptance of the charter, if they have any to offer.
    The first ground relied on by the resisting defendants, raises the question whether they are bound by any contract made by the company, beyond the amount which they subscribed to the original articles of association. The assumption that this was intended as a mere charity, is the only possible ground of this defence; and it is true that men may voluntarily contribute to the construction of a Theatre, for the public use and benefit, as well as a Church or a Hospital. But that such was not the case here is manifest, as well by. the nature of the undertaking as by the articles themselves. No instance has fallen under my observation, in which a Theatre has been erected merely as a public convenience ; and although, as was obviously the case here, public convenience might enter largely into the consideration of the undertaking, some personal benefit is contemplated. Here the capital stock is divided into shares of equal value, obviously with a view to regulate the distribution of the profits, if any were made, and to apportion the losses. In a contribution to a mere charity, it would have been wholly nugatory. It could not, therefore,, have been intended as a charity, but an association of the parties to contribute'a limited amount of money to a common object, for their common benefit; and whether it be called a partnership, or its character be designated by any other name, it would astonish a merchant to be told tha't the individuals were not liable to creditors beyond the amount of the capital sum put by them, severally, into the common fund. In other words, that having paid in their portion of the capital, they are not liable at all. The language of the Court, in 1 Mylne & Keene, 76, is very strong to the point.
    Besides the complainants, numerous other creditors have come in to establish demands against the defendants, some of which were contracted before and some after the Act of incorporation, and it is insisted that Boyce, and the other defendants associated with him in the defence, are not liable to contribute to the payment of the after-contracted debts.— They put this upon the ground that they never accepted the charter, and that the Act itself was a dissolution of the original association.
    I should find no difficulty, if it were necessary, to deduce from the facts, that Boyce, Glover and Street, of the firm of Street & Boinest, particularly the first two, did, in effect, accept and approve the charter. It is not enough that they were merely passive, as between creditors and the association : they were bound not only expressly to disavow the charter, but to give publicity to it.
    The persons named in the Act of incorporation, viz: Robert Wotherspoon, W. A. Carson, James Rose, Richard W. Cogdell and Henry Gourdin, are the same persons who are constituted trustees by the articles of association. And the objects expressed in the Act, “ erecting and conducting a Theatre in Charleston,” are the same, and it is these persons, “and their associates,” who, by the Act, are constituted a body politic. The names subscribed to the articles, amongst which will be found the names of these defendants, show who' their associates were; and there was nothing to prevent their participating in the benefits of the corporation, if they had thought proper. They were, in fact and in law, members of the corporation. The Act of incorporation might have been obtained without their knowledge or consent, and they may have refused to accept it; but how were the persons dealing with the corporation to know who the corpora-tors were, but through the Act and the articles of association? It need hardly be added here, that one who holds himself out to the world as a member of a partnership or corporation, is equally liable with him who conducts the business, although he remain perfectly passive. None of the defendants deny knowledge of the Act of incorporation, and, residing here, the reasonable presumption is that they did know of its existence; the proof is that it was known to Boyce, Glover and Street, and as between the defendants, their neglect to give notice of their dissent subjects them equally to all the liabilities incurred. They had been associated for the purpose of building and conducting a Theatre, without any limitation as to time. The charter had the same object in view, and was for the common benefit of all, as without it, each would have been severally liable for all the contracts of the company, and it cannot be supposed that one would forego such an advantage, when it could not, in the least, diminish his profits. If it had been a profitable concern, and these defendants had come in to receive their dividends, and the Treasurer had said “ you are not entitled, because you have not expressed your consent, or attended the corporation meetings,” might they not have answered triumphantly, “the Act and the articles show that we are members of the corporation, and it rvas never yet heard that corporators forfeited their right by neglecting to attend the meetings, unless there Avas some express enactment either in the Act of incorporation or its bylaAVS.” As between the .parties to this suit this question is not important, but it may become so when I come to consider the liability of the Corporators to contribute to make up the capital contemplated by the Act.
    Another ground of defence is, that these debts are merged in the drafts drawn and accepted by Wotherspoon and Logan, and the judgments against the corporation upon them, and that this made them the debts of the corporation. This would be, indeed, “a new way of paying old debts.” It this was a debt of the association, the assumption of it by the corporation certainly would not discharge it; and if even the payment of it had actually been made by the corporation, Avithout the consent of the associates, it would have been no bar to an action against them for the same debt. If it were otherwise, worthless paper is not the sort of currency which constitutes a lawful tender in the payment of an honest debt.
    The corporation having accepted an assignment or transfer of all the visible property of the partnership, they are, as between themselves, primarily liable for all the debts. But it is conceded, that the property of the corporation will not be sufficient to pay all the debts, and the question is, how is the deficiency to be supplied?
    At the time the Act of incorporation was passed the Theatre had been built, and was ready for use, and the Act recites, and necessarily on the authority of the persons applying for it, that its capital was then “a present capital of $60,000.” And persons dealing with the corporation, and desiring to know what their means were, might well suppose that the whole sum had been paid in, and was in the hands of their Treasurer. The fact that only $37,000 had been subscribed, or paid in, was calculated to surprise, and operated as a fraud on the creditors, for which the corporation is responsible. The case of Hume v._ The Winy ah and Wan-do Canal Company, Carolina Law Journal, page 217, decided by Chancellor DeSaussure, whose judgment was affirmed by the Court of Appeals, strikes me as decisive of this question. There, a corporation not professing to have any fixed capital, made by-laws, by which each of the corpora-tors was bound to contribute equally, or rateably, to all expenses incurred, and it was held that the corporators were liable to be assessed for all the debts incurred. Now this corporation professed to have 60,000 dollars capital, and if, in the case cited, they were personally bound to the extent of all their engagements, here they are necessarily bound to contribute to the extent of the capital, on the faith of which they obtained credit.
    It follows from what has been said, that under the articles of association, the associates or persons who subscribed the articles, are liable, jointly and severally, for all the debts incurred before the Act of incorporation. That the corporation, having accepted an assignment of all the property of the association, for the purpose of carrying out their object, they are primarily liable for their debts. That the funds of the corporation falling short of paying all the demands, the corporators are bound to contribute rateably to make up the capital of $60,000, to be applied to their payment. That the debts of the corporation proper, are to be first paid out of the property and funds belonging to it, including the amount of capital to be contributed and made up by an assessment on the members, to the amount of $60,000. If this prove insufficient, the debts of the association are to be postponed, and be paid rateably by the subscribers to the articles.
    
      The case of Goddard v. Pratt, 16th Pickering, 412, pushes the liability still further.' There, the members <5f an Iron Manufacturing Company, which had been in operation for some time, obtained an Act of incorporation, by the name of the Wareham Iron Company, but continued to carry on their business in the name of the old firm. The court refused, in a suit against the company, to admit evidence to shew a general reputation, that, in using the name of the firm, the name of the corporation was meant; and held, that although the Act of incorporation might operate as a dissolution of the company, yet the members were liable as partners, when dealing with persons having no notice of the disolution. It proceeds on the principle, that if a retiring partner neglects to give notice, or suffers his name to be used, he will be liable for the debts of the new concern. If, therefore, the corporation assets should turn out insufficient to pay the debts of the corporation, and they have dealt with persons ignorant of the dissolution of the association, the members will be liable as partners.
    
      It is therefore ordered and decreed, that an account be taken of the debts of the Theatre, whether contracted by the association or the corporate body, and of the property and funds applicable to the payment of the same — and that the Master do also inquire and ascertain, in what sum the several members should contribute to satisfy the liabilities of the association, and body corporate, and what must be contributed by the solvent members to make good the deficiencies of such as are out of the jurisdiction, or are unable to pay. The plaintiffs’ costs, to this time, to be paid by the defendants, Boyce, Street, Boinest, Roger, Pitray and Glover; and the other parties to pay their own costs. Subsequent costs to be paid as hereafter directed.
    The defendants, Ker Boyce and Street & Boinest, appealed from the Circuit decree in this case, on the following grounds.
    1st. Because the articles of agreement never were intended to have, nor could they have, any further obligation than to bind the parties who were subscribers, to pay the sum subscribed, to the person entitled to receive the same.
    2d. Because the Act of incorporation cannot affect any except such as accepted of the same. And there is no proof of acceptance on the part of either of these defendants.
    3d. Because, admitting any obligation on the subscribers for more than the amount they agreed to pay, it could only arise from some privity of contract. And this was not, nor could be, proved to exist in this case.
    
      4th. Because the acceptance of the drafts was, even as to the contractors, an extinguishment of their claims on the subscribers : and the transfer of these drafts to a third person, could only give to such third person a personal action against the parties who were bound by the draft.
    5th. Because, in a case where it is sought to charge a party as a corporator, the fact of his assent must be proved, and it is not for the defendant to prove his dissent.
    6th. Because the assent of the parties to contract with the corporation, and to receive payment from the agent, was a waiver of all claim on the original subscribers under the original articles of agreement, except those who had signified their acceptance of the charter of incorporation.
    A. G. & E. MAGRATH, Solicitors for Ker Boyce and Street Sp Boinest.
    
    The defendants, Louis A. Pitray and Thomas J. Roger, appealed from the decree in this case, and moved that the same might, as to them, be reversed, and the bill dismissed with costs; or at least that it might be so modified as to exempt them from liability for any debts contracted after the incorporation of the company, and also from the payment of costs. And in support of their said appeal, they relied upon the following grounds:
    1. That the agreement of 10th March, 1835, did not confer any authority upon the Trustees therein named, to bind the subscribers by their contracts; nor impose any other obligation upon the subscribers, than the payment of their respective subscriptions ; and the said defendants having paid their respective subscriptions, are not further liable in Law or in Equity, either to the Trustees, or to those with whom the latter may have contracted.
    2. That the complainants having brought their action, and recovered judgment against the corporation, have thereby elected to regard the Trustees as the agents of the corporation, and not of the subscribers to the original _ agreement; and are bound by their election so made, and estopped from alleging a liability on the part of the subscribers under the agreement.
    3. That the complainants’ original cause of action was merged in the judgment recovered against the corporation; and if it be not, then the remedy against the subscribers to the agreement was at law, and was barred by the Statute of Limitations before the filing of the bill: and it is submitted, that these defendants should be let into that defence, as the bill charges a liability under the judgment, to which the Statute could not have been pleaded.
    
      4. That these defendants were never members of the corporation, and never contemplated becoming so: an Act of incorporation not being within the purview of the original agreement signed by them: nor did they join in any application for such Act, or in accepting it after it was granted; nor have they attended any of its meetings, or by word, act, or otherwise, admitted themselves members of the corporation, or claimed or exercised any rights as such. Wherefore, it is respectfully submitted, that they cannot be held to any liability to complainants, as corporators.
    5. That even if these defendants had been members of the corporation, they are individually, liable as such for the debts or contracts of the corporation ; nor could they be called upon to contribute thereto, beyond the amount of their respective subscriptions, which have already been long since paid in full. And if accepting the charter, and acting under it, be regarded as an admission that the capital of $60,000 had been paid m, which renders the individual corporators liable to that extent; yet, it is respectfully submitted, that such admission and liability can affect only such members as participated, or concurred, in these acts, and it is neither proved, nor pretended, but is utterly denied by these defendants, that they, in any manner, did either the one or the other.
    6. That if the agreement of the 10th March, 1835, did authorize the trustees to bind the subscribers by their contracts, yet this authority terminated with the acceptance of the Act of incorporation, of December, 1837, when the trustees became the agents of the corporation, and were no longer agents of the original subscribers; wherefore, it is respectfully submitted, that these defendants cannot be individually liable for any debts contracted by the trustees after the acceptance of the charter.
    7. That there is no ground for charging these defendants with the payment of costs; and it is respectfully submitted that, in this particular, the decree should be reformed.
    8. That the decree is, in other respects, contrary to law and to equity, and to good conscience.
    BAILEY & BREWSTER, Defendants' Solicitors.
    
    The Master made the following report:
    “STATE OF SOUTH CAROLINA, 7 Charleston District. ^ In Equity.
    To the Honorable the Chancellors of the said State:
    Pursuant to the order of the Cqjrrt in this case, made by Chancellor David Johnson, I advertised in the newspapers for all the creditors of the Charleston New Theatre to come in before me and prove their debts, and, in consequence thereof, statements of the following demands have been filed in my office:
    Executors op Haslett.
    Balance of debt due them, - $2,623 40
    Interest thereon, from 21st Februaary, 1840, till 1st February, 1845— 4 years, 11 months and 11 days, 905 68
    --- $3,529 08
    W. J. Bennett.
    Amount of judgment, - - 723 45
    Interest on $547 from 29th January, 1842, till 1st Feb’ry, 1845 — 3 years, 3 days,......115' 00
    838 45
    L. Hayden.
    Balance of judgment, - - - 58 50
    Interest on $28 from 1st February, 1842, to 1st Feb 1845 — 3 years, 5 88
    64.38
    Birnies & Ogilvie.
    Amount of judgment, - 427 80
    Interest on $385.84 from 4th June, 1844, to 1st- Feb. 1845 — 7 months, 28 days, - - - - / - 17 74
    445 54
    Moffett & Calder.
    Amount of judgment, - 1,008 70
    Interest on $942.75 from 4th June, 1844, till 1st Feb. 1845 — 7 months, 28 days, - - - - - 38 46
    1,047 16
    Cornelius & Co.,
    Amount of judgment - 816 87
    Interest on $752.79 from 29th Jan. 1842, to 1st Feb. 1845 — 3 years, 3 days, - - - - - - 158 62
    975 30
    Cornelius & Co.
    Acceptance and protest, - - - 162 95
    Interest on $160.95 from 27th January, 1840, to 1st Feb. 1845 — 5 years, 5 days,...... 56 45
    219 40
    30 $7,119 40
    
      Amount brought over,..... $7,119 40
    Elias Thomas.
    Balance of due bill, - $181 69
    Interest from 4th Dec. 1839, to 1st of Feb; 1845 — 6 years, 59 days, - 78 40
    260 09
    J. C. Levy, Executor.
    Acceptance of draft, - - - 114 37
    Interest on $90.37 from 9th July, 1844, till 1st Feb. 1845 — 6 months, 23 days,.....3 56
    117 93
    Rail Road Bank.
    Promissory note and protest, - - 927 14
    Interest on $925 from 30th April, 1841, until, 1st Feb. 1845, being 3 years, 10 months and 1 day, - 248 39
    
    1,175 52
    H. Gourdtn.
    Promissory note, - 1,100 00
    Interest from 27th Jan. 1841, to 1st Feb. 1845 — -4 years, 5 days, - - 264 92
    1,364 92
    Bank of the State.
    Amount paid for insurance, - - 2,000 00
    Interest on the several amounts paid from 1st Feb.’ 1841, to 1st February, 1845,..... 350 00
    2,350 00
    Davids & Harrison, - - - 10 71
    Lawton, J. - - - - - 100 04
    McCartney & Gordon, - - - 8 75
    Johh S. Jones, - - - 125 00
    244 50
    Total amount of claims, - - - - $12,632 36
    A contingent claim, for a large amount, has been filed in behalf of James Rose and others, amounting to $19,413.84, with interest on $15,000 from the 23d November, 1844— which debt is secured by a mortgage of the Theatre, and it is filed to cover any loss that may arise from the sale of the Theatre, in case it should not pay the debt, and in case it should not be deemed to be extinguished by the purchase of the Theatre by J. B. Campbell. In addition to the above debts, there is also one of $6,500 due to the Bank of the State, on the Fire Loan, which is secured by a mortgage of the Theatre, on which there is a considerable arrear of interest due.
    These two last mentioned debts make up an aggregate, without the interest, of about $26,000, and if they are both chargeable on the theatre, the building if sold would not perhaps pay more than $16,000 of the mortgage debt, leaving a deficiency of $10,000, besides interest, to be made up by the stockholders of the company; and this supposed deficiency added to the actual amount of debts proved before me, will constitute an indebtedness of twenty-two thousand six hundred and thirty-two 36-100 dollars due by the Charleston Theatre Company. In my opinion, all the debts set forth in the above detail are properly due-by the incorporated company, and ought to be paid, by the incorporation, while the debt due to the executors of Haslett was incurred for building the theatre before the charter was granted or accepted by the association, — and for the payment of which debt the individual members have always remained and. still continue liable.— Whether the members of the association are not liable for all the debts of the theatre as partners, inasmuch as they have never given any notice to their creditors or the public, either of the dissolution of the partnership or their acceptance of the charter, is a grave difficulty, which prevents me from giving a more decided classification of these debts.
    As to the property with which these debts are to be paid, there is none belonging to the company, for the fee simple of the theatre has been sold under an execution against the company ; and although it was chartered with a present capital of sixty thousand dollars, at the time of the acceptance of the charter, the stockholders have only paid towards the capital of the company the sum of thirty-seven thousaird five hundred and fifteen dollars, leaving a deficiency of twenty-two thousand four hundred and eighty-five dollars; in case the Court should be of opinion that in favor of creditors the company is under a legal obligation to make up the whole amount of their capital. Mr. Campbell, the solicitor for most of the creditors of the theatre, in filing his claim before me urged the suggestion, that the assets of the company, that is their capital not yet paid in, is chargeable with interest from the date of the acceptance of their charter in favor of creditors, in case the capital should prove insufficient to pay the debts, and this point I respectfully refer to the Court, at his request.
    I have every reason to believe, and so report, that the defendants in this cause constitute all the solvent members, both 
      of the association and the incorporated company, and I find that by dividing the debts equally among them, an assessment of five hundred and fifty dollars on each of them would make up a sum sufficient to pay all the debts of the concern, supposing that the theatre will pay fifteen thousand dollars of these debts. If the theatre should fail to pay this amount an increased assessment would be necessary. All which is respectfully submitted. *
    EDWARD R. LAURENS, Master in Equity.
    
    February 13th, 1845.
    On the appeal, the following decree was pronounced by the Court of Appeals:
    Dunkin, Ch. This Court concur entirely with the Chancellor, that the associates, or persons who subscribed the articles of the 10 March, 1835, are liable, jointly and severally, for all the debts incurred for the purpose of the association before the Act of incorporation. In the case of Walburn vs. Ingilby, (referred to in the decree,) “whosoever became a subscriber upon the faith of the restricting clause, or of the limited responsibility which that holds out,musthave himself to blame, and be the victim of his ignorance of the law of the land.”
    The Court concurs, too, on the other points ruled by the decree, except as to the liability of the applicants as corpora-tors under the charter of December, 1837, on which the opinion of the Court is reserved.
    It is ordered and decreed, that the decretal order of the Circuit Court be enlarged, and that, in taking an accomit of the debts of the theatre, the Master distinguish, as far as practi-. cable, between those contracted by the association and those contracted by the corporate body. And that he also take an account of the sums paid in by the several subscribers to the association, as well as by the several corporators; and also, an account of the administration of the funds by the trustees appointed under the articles of the association. The question of costs being also reserved until the final hearing.
    Under this appeal decree, the Master reported as follows:
    STATE DF SOUTH CAROLINA, Charleston District. In Chancery.
    
      To the Honorable the Chancellors of the said State :
    
    Pursuant to the order of the Appeal Court in this cause, made on the 31 March, 1845, directing that the decretal or.derofthe Circuit Court be enlarged, and that in taking an account of the debts of the theatre, the Master distinguish, as far as practicable, between those contracted by the association, and those contracted by the corporate body; and that he also take an account of the sums paid in by the several subscribers to the association, as well as by the corporators; and also, an account of the administration of the funds by the trustees appointed under the articles of association: I respectfully report, that the original subscription for building the theatre, is dated 10th of March, 1835¡ and the names which are subscribed to it, were signed at various times, and that some persons who became members by paying their money signed no memorandum at all. No question is raised by any parties thus situated. That the Act for incorporating the theatre was passed on the 20th day of December, 1837, and was accepted, at a meeting called by the trustees, on the 28th February, 1838.
    The following lists, Nos. 1 and 2,-*will shew what debts were contracted before the 28th February, 1838, and those which were contracted afterwards.
    List No. 1.
    No. 1 . — Haslett. , Sutton & Fogartie had a contract dated 1st March 1837, for mason work, in building the Theatre, for 14,500 dollars ; extra work between 1st April, 1837, and 15th December, 1837, 1500 dollars. On the 3d January, 1838, they drew on Logan, Treasurer, in favor of R. E. Sutton, for 2000 dollars. This was credited as cash on their contract; endorsed to Haslett. E. Curtis & Co., had a contract dated 1st March, 1837, for the Carpenters’ work, in building the' Theatre, for 13,500 dollars; extra work in the course of the year 1837, 2,317 dollars. On the 15th December, 1837, Curtis drew on Logan, Treasurer, in favor of Lance, for 1500 dollars, accepted and credited as cásh on their contract; endorsed to Haslett. The above draft for 2,000 dollars was renewed 5th February, 1838, and renewed again on the 10th March, 1838. The draft for fifteen hundred dollars was renewed, payable 1st March, 1838. On the 1st February, 1840, Haslett obtained judgments on these drafts against the incorporated company. On the 21st February, 1840, there was paid on account, 1500 dollars, leaving a balance due of $2,623 40, on which there have been subsequently payments of 300 dollars, made on the 25th February, 1841, and of 40 dollars made on the 5th March, 1841, and of 40 dollars made on the 6th March, 1841, leaving a balance due on the 6th March, 1841, of $2,432 94.
    No. 2. — ■ W. J. Bennett. Bill for lumber furnished Theatre to 28th February 1838, $431 38; bill for lumber furnished ¡since the 28th February, 1838, $116 52. On these two demands, making a sum of $547 90, Mr. Bennett obtained a judgment, 29th January, 1842, against the incorporated company, for $723 45, with interest on $547 90 till paid.
    No. 3. — Hayden. Fabin & Allen, Painters, had a demand against the Theatre Company for work and labor, previous to January 1838. On the 29th January, 1838, they drew on Logan, Treasurer, for 228 dollars in favor of Hayden, which was accepted, .and credited as cash in their account. 6th March, 1838, there was paid on account 100 dollars ; and on the 4th December, 1839,100 dollars on account, leaving a balance due on the 4th December, 1839, of 44 dollars. Hayden, on the 8th January, 1842, obtained a judgment for balance on this draft for $50 75, and $8 costs.
    No. 4. — Birnies Sp Ogilvie. Goods sold and delivered to the Theatre Company, between 11th September, 1837, and 8th February, 1838, $552 86. On the 4th December, 1839, there was paid on account $250, leaving a balance of $302 86 due. Judgment was obtained against the. incorporated Company, 4th June, 1844, on this debt, for $385 84, and $25 62, costs.
    No. 5. — Moffett Sp Calder. Goods sold and delivered to the Theatre Company, between November, 1837, and 28th February, 1838, $902 81; goods sold and delivered after the 28th February, 1838, $54310. Payments made by the company after the 28th February, 1838, $610 ; and applying the payments made by the incorporated company to the debts contracted by them after the acceptance of the charter, leaves a balance of $835 91 due on the debt contracted before the 28th February, 1838. On the 4th of June, 1834, Moffett & Calder obtained a verdict against the incorporated company for $942 75, and $25 62 costs.
    
    No. 6. — Cornelius Sp Co. Goods sold and delivered to the Theatre Company 18th November, 1837, $1,072. Payment by the company 28th August, 1838, $1000, which leaves a balance of $72 due on this debt. On the 1st December, 1838, goods sold and delivered to the Company, $812 87 ; payment by the company on the 20th January, 1840, $300, leaving a balance due on this debt of $512 87. Cornelius & Co. on the 29th January, 1842, obtained a verdict against the incorporated company for $752 79, with interest on that sum from 1st June, 1841, till payment, and $24 25, costs of suit, for which judgment was entered up for $811 87, with interest on $752 79, till paid.
    No. 7. — Elias Thomas. 22d November, 1837, goods sold and delivered, $269 75. On the 23d August, 1838, Logan, as Treasurer, gave a note for the above amount, with interest from 21st December, 1837. December 4th, 1839, paid on account $125, leaving a balance unpaid on the 4th December, 1839, of $181 55.
    No. 8. — J. C. Levy. Fogartie & Sutton had a contract, (see No. 1.) On the 7th March, 1838, they drew on Logan, Treasurer, in favor of Levy, for $182, accepted and credited as cash on their account. 5th December, 1839, paid on account $100, leaving a balance unpaid on the 5th December, 1839, of $104 21. ■
    No, 9. — E^nlc of the State. 24th March, 1837, Mortgage to the Bank, of the Theatre, to pay all notes of Robert Wotherspoon, James Rose, Henry Gourdin, Richard W. Cogdell, and William A. Carson, in favor of George W. Logan, Secretary and Treasurer, and by him endorsed, and discounted by the Bank. 13th November, 1837, the notes drawn, endorsed and discounted as above, all consolidated in one of $18,000, reduced by subsequent payments to $15,000, for which a renewal note was given, dated 29th June, 1840, and payable 28th September, 1840. On this debt judgment was obtained by the Bank, on the 23d of November, 1844, for $19,366 84, and $47 costs of suit.
    No. 10. — Joseph Lawton. Goods sold and delivered to the Theatre Company, 21st November, 1837, $247 55 ; 5th December, 1839, payment on account, $147 50, leaving a' balance due of $100 05.
    No. 11. — South Western Rail-Road Bank. 21st February, 1840, $2000 ; Fogartie & Sutton had a contract (see No. 1) dated 1st March, 1837. Fogartie & Sutton having no credit, the company bought, 14th September, 1837, bricks to the amount of $1077 20, from Gordon, and credited as cash in Fogartie & Sutton’s accounts. This bill not being paid, Gordon sued and obtained judgment. With the proceeds of the above $2000 note, Logan, Treasurer, paid on account of Gordon’s judgment, $500 on the 21st February, 1840, and on the same day he paid $1500 on account of Haslett’s judgment, (see No. 1.) Subsequent payments reduced the note on the 30th April, 184T, to $925.
    No. 12. — Fire Loan. 19th November, 1839, $6,500. W. & R. Walker contracted with the company for stone, flagging, &c. Work completed 22d February, 1838; amount of their bill $1,52425. On 11th April, 1838, Wotherspoon, chairman of trustees, gave a note for $1,52425, for the above bill— note never paid. The note was sued to judgment, and the judgment paid out of the Fire Loan, being antecedent to mortgage. The residue went to reduce note No. 9, with the exception of $100, paid for a new drop-scene for the theatre.
    
      List No. 2.
    No. 1. — Davids if Harrison. November, 1841, for goods sold and delivered, $10.71.
    
      No.2. — McCartney f Gordon. December, 1838, for goods sold and delivered, $8.75.
    No. 3. — Paul Jones. November, 1840, work and labor for the theatre, $125.
    No. 4. — John S. Jones. November, 1840, for goods sold and delivered, $111.05.
    No. 5. — Jefferson Bennett. May, 1838, goods sold and delivered, $116.52.
    No. 6. — Cornelius f Co. 1st December, 1838, goods sold and delivered, $512.87. (See No. 6. List No. 1.) 9th Nov. 1839, goods sold and delivered, $160 95.
    No. 7. — Bank of the Stale. Amount paid for insurance on the theatre, $500 on the 1st February, 1841; $500 on the 3d February, 1842; $500 on the 4th February, 1843, and $500 on i the 5th March, 1844 — $2,000.
    No. 8. — H. Gourdin. Promissory note, $1,100, with interest thereon from 27th January, 1841.
    
      Recapitulation.
    
    List No. 1.
    No. 1. Haslett,...... with interest thereon from 6th March, 1841, $2,432 94
    No. 2. 'Bennett, - 431 38
    No. 3. Hayden, ------ with interest thereon from 4th Dec. 1839. 44 00
    No. 4. Birnies & Ogilvie, - 302 86
    No. 5. Moffett & Calder, - 835 91
    No. 6. Cornelius & Co...... 72 00
    No. 7. Thomas,...... with interest thereon from 4th Dec. 1839. 181 55
    No. 8. Levy, ------- 104 21 with interest thereon from 5th Dec. 1839.
    No. 9. Bank of the State, - . - - - . 1,500 00 with interest thereon from 28th Sept. 1840.
    No. 10. Lawton, ------ 100 05
    No. 11. Rail Road Bank, - 925 00 with interest thereon from 30th April, 1841.
    No. 12. Fire Loan, ----- 6,500 00 with interest thereon from 19th Nov. 1839.
    List No. 2.
    No. 1. Davids &. Harrison, - 10 71
    No. 2. McCartney & Gordon, - - - - 8 75
    
      No. 3. Paul Jones,...... 125 00
    No. 4. John S. Jones,.....Ill 05
    No. 5. Bennett, ------ 116 52
    No. 6. Cornelius & Co. ----- 673 83
    No. 7. Bank of the State — Insurance, - - 2,000 00
    No. 8. H. Gourdin — Promissory note, - - 1,100 00 with interest thereon from 27th Jan. 1841.
    The order of the Appeal Court, enlarging the decretal order below, having directed me to distinguish between the debts contracted before the acceptance of the Act of incorporation and those contracted afterwards, I have thus gone into a minute history of them, and in reporting the above debts in List No. 1, as contracted before, the acceptance of the charter, I have discarded such items as costs, interest on open accounts, <fcc. which -have been added to them, and charged against the incorporated company, in the judgments obtained against them on some of these debts. In my opinion these items are not debts contracted before the acceptance of the charter, nor the legal consequence of such debts, as against the original subscribers for building the theatre. Heretofore the attention of the Master was not directed to the discrimination of the debts of the theatre, which has been made above, pursuant to the order of the Appeal Court. And under the order of reference., dated 8th of July, 1844, the same demands were proved as debts against the incorporated company, and some of .them as judgment debts, because judgments had been obtained on them against the company, while the point itself, as to when the debts were contracted, whether before or after the acceptance of the charter, was unnoticed in the former proceedings, and never raised until made by the decree of the Court of Appeals.
    The account herewith filed, marked A, is an account of the administration of the funds by the trustees appointed under the articles of association, by which it appears that on the day of the acceptance of the charter the association was very greatly indebted for building the theatre. It will be .seen from this statement, that the whole of the capital was not paid in at the time the charter was accepted. In fact a •large portion of it was paid in afterwards by the subscribers; but there never was but one list of subscribers. After the incorporation no additional subscription was opened. Those who had not paid before, paid then, but they paid as original subscribers for building a theatre, and some of the subscribers made further payments, corresponding with additional shares, and of these additional payments .some were made before and some after the acceptance of the charter. There is no one among the corporators who was not a subscriber to the original articles of association.
    In relation to the debt originally due the Bank of the State of South Carolina, Mr. Furman, the cashier of the Bank, proves that since the present suit has been commenced, the Bank has, for a full consideration, assigned their judgment to Martin, Starr <fc Walter; and that the Bank has now no claim or interest in the judgment.
    Respectfully submitted,
    EDWARD R. LAURENS, > Master in Equity»
    July 8th, 1845.
    
      
      
    
    
      B.
    Charles M. Furman, Esq., Sworn. There is nothing How due to the Bank of the State in the matter of the statement submitted, signed by him, and dated 16th June, 1845, by the master. The Bank assigned their judgment over to Martin, Starr & Walter; does not know whether Martin, Starr & Walter have been paid or not. Neither the corporation, nor the voluntary association, now owe the Bank any thing except the fire loan and insurance. The only obligations the Bank ever held in this matter, are the fire loan bond and mortgage, and the notes of Wotherspoon, Gourdin, Rose, Cog-dell and Carson, signed as in the note produced and now in evidence. The consideration paid by Martin, Starr & Walter, was the full amount of the debt, principal, interest and costs.
    By Mr. Petigru. The assignment to Martin, Starr & Walter, was the 23d Novembei, 1844.
    
      In the matter of the Fire Loan. — Under the provisions of the Act for re-building the city, a loan of six thousand five hundred dollars was made to the Charleston New Theatre Company. The Board agreed, that out of this loan the' amount of Walker’s judgment was to be paid, and the balance applied on account of the former note of the trustees.— This was done. The payment on account of the old note reduced the debt to $>15,158: it was again renewed once, and reduced to $15,000; was present when Walker was paid; saw the money applied to this payment himself. The fire loan mortgage is still held by the Bank.
    C. M. FURMAN.
    Sworn to before me, 16th June, 1845,
    Edward R. Laurens, Master in Equity.
    
    
      R. Wotherspoon, James Rose, H. Gourdin, R. W. Cogdell, and W. A. Carson.
    
    
      
    
    
      W. P. Bennett, Birnies & Ogilvie, Moffett & Calder, Cornelius & Co. judgment creditors of the incorporated Charleston New Theatre Company, excepted to the second report of the Master, filed 8th July, 1845, as follows:
    1. Because, having proved their claims, in conformity with the decree, and having judgments at law against said corporation ; and the Master, upon proofs before him, having, on the 13th day of February, 1845, reported the correct amount of said claims, and no exception having been taken to said report, but all parties having, in fact, assented to the same, the Master was not at liberty, without proof or pretension of error, and without authority, to set aside his report on file.
    2. Because the Appeal Decree only directs the Master to distinguish between the debts of the corporation, and the debts of the association, and the claims of these creditors are debts of the corporation, and the Master should have so reported, without making statements, which, so far as he has reported, there is no evidence to sustain or authorize.
    3. Because, having judgments at law regularly obtained, it would be at least unusual for a Master in this Court to set them aside, without any evidence or reason, (so far as his report exhibits) save his own volition.
    4. Because, so far as these parties are concerned or affected, the report is unauthorized by the decree of the Appeal Court, and irregular and improper.
    JAS. B. CAMPBELL, Solicitor.
    
    Kerr Boyce and T. Street excepted to the report of Mr. Laurens, one of the Masters, in this case, on the following grounds:
    1. Because the said report has, in enumerating the debts, so as to fix the liability of the subscribers to the voluntary association, and the members of the incorporated company, merely referred to the date of the contract; without inquiring when the contracts were consummated, and without inquiring whether the benefit of these contracts was for the voluntary subscribers, or the incorporated company.
    2. Because, if the voluntary subscribers are to be charged with all the debts contracted before the acceptance of the charter, they are well entitled to be credited with the value of the contracts, as afterwards adopted and enjoyed by the members of the incorporated company. And that this mat., ter, as well as that set forth in the first exception, are properly to be inquired into, in a case where the creditors are not to charge the voluntary subscribers or the incorporated company, but have, by the permission of the incorporated company, established their claims against that company, and a portion of the members of the incorporated company are seeking to charge the voluntary subscribers.
    3. Because, although the incorporated company received all the property of the voluntary subscribers, and enjoyed the same, no account is furnished, and the payments made after the incorporation, are credited on the debts of the incorporated company. It is submitted that, in a case where neither the debtor nor the creditor specifically appropriates the money, it must be applied to the debt which has been due longest. And the Master has no right to elect, as to the debts to which the payment shall be applied.
    4. Because a note accepted as payment (Levy’s) is the debt claimed. And if the creditor chooses to receive such note, as cash, in payment of an open account, the parties bound by such account are discharged. And the party who receives the note has no claim resting upon the original cause of action.
    5. Because the master has proved $15,000 due to the Bank of the State, upon the testimony of Mr. Furman, who testifies that, on the debt, nothing is due to the Bank. That the debt has been assigned; that he does not know whether the assignees have been paid. And the . parties to whom the debt was assigned, have given no proof of the debt.
    6. Because, inasmuch as the members of the incorporated company received and took possession of all the property of the voluntary subscribers, without any consideration passing from the members of the incorporated company, it will be presumed, at least, that the company took the property subject to all claims. And where that fact is established by the admission of the company, in assuming to pay, and in all cases of default, in allowing judgment to be entered up against the company, there is no claim against the voluntary subscribers, either by the creditors, or by the members of the incorporated company. And 1st. The creditors have no claim, because the notes, drafts and judgments which they hold, are against the incorporated company, and discharge the voluntary subscribers. And 2dly. The members of the company have no claim, inasmuch as they assumed the management of the whole business, took the property and held it as their own, gave their own notes and bills in payment of the debts, and enjoyed the use and profit, if any, of all the property for which such debts were contracted.
    8. Because the report is unsatisfactory and inconclusive on these and other points.
    A. G-. & E. MAGRATH, Solicitors.
    
    
      The defendants, L. A. Pitray and Thomas J. Roger, concurred in and prayed the benefit of the above exceptions of Ker Boyce and T. Street, and they farther excepted to the report, on the following grounds.
    1. That these defendants never having become members of the corporation, and the trustees or directors of the corporation having, by the order of the corporation, taken possession of all the property and assets of the company, and appropriated them to the use of the corporation, the said property and assets being amply sufficient to pay all the debts contracted by the company before the incorporation, the Master should have reported that the corporation, or the trustees and directors thereof, were, at least, primarily liable before the members of the company, not members of the corporation, can be called upon.
    
      2. That in contracting debts exceeding the • amount of subscriptions paid in, if such were the fact, the trustees exceeded theic authority and violated their duty, and are, at ^east, primarily liable, and the Master ought so to have reported.
    3. That if these defendants are. liable at all, it is as simple contract debtors, and they are protected by the Statute of Limitations; and they are entitled to set up this defence without claiming the benefit of the Statute by their answer, inasmuch as the debts are not stated in the bill, with but one exception, and that is set forth as a debt of the corporation, and these defendants are claimed to be liable, not as members of the company, but of the corporation.
    4. That these defendants are in no respect liable for any of the debts mentioned in the Master’s schedule, and he ought so to have reported.
    BAILEY & BREWSTER, Defendants' Solicitors.
    
    Upon the report and exceptions, was made the following order and decree.
    Johnson, Ch. The order of the Court of Appeals of the 31st. March, 1845, reserves the question as to the liability of the defendants, Boyce, Street, Pitray and Roger, as corpora-tors, and have not sent that question down to be adjudicated here, but directed certain inquiries to be made by the Master, apparently with a view to enable that court to decide that question, although I do not readily perceive how the inquiries directed could aid in arriving at a conclusion. All that remains for this court to do is, to determine whether the Master has correctly discharged the duty assigned him. The order directs that he shall take an “ account of the debts of the Theatre,” distinguishing, “as far as practicable, between those contracted by the association, and those contracted by the corporate body.” The amount of- the several sums paid by the association and corporation, and an account of the administration of the funds by the trustees of the association; reserving also the question of costs until the final hearing. The Master has filed two reports, one of the 13th February, and the other of the 8th of August, 1845, which are, in some respects, different in their results, and it is objected that he had no authority to make the second report; but I apprehend that he was at liberty to correct, at any time, before the judgment of the court is pronounced, any error of law or fact into which he had fallen, and I shall treat the last, without reference to the first, as the Report. That has given rise to numerous exceptions on the part of the defendants, Boyce, Street, Pitray and Roger, and some on the part of the creditors, which cover almost the whole ground of controversy between the parties. Some of them having no reference to the matters referred, the consideration of a few only, will dispose, of all the rest.
    The creditors except, on the ground that the report does not allow interest on demands bearing interest, and clearly that is erroneous. The question is not whether the association or corporation is to pay it, but whether the creditors are entitled to it from either the one or the other, and as far as the creditors are concerned, the.report in that respect must be reformed.
    Several of the demands against the association were on simple contracts, which have been assumed by the corporation, and some of them passed into judgment. In the report these are charged as debts against the association, and Boyce, Street, Pitray and Roger except, on the ground that they are barred by the Statute of Limitations. The time limited by the Statute has run out since the debt was contracted, but the fact that the members of the association were partners, and that all of the partners, amounting to about fifty in number, except these four, admit that these debts are due, and profess their willingness to pay their proportion of them, seems to have been overlooked. It will not be questioned that the promise of any one of them would take the case out of the Statute.
    The former decree of the Circuit Court decided, and in that respect it is affirmed by the Court of Appeals, that the corporation was primarily-liable for the debts of the association, and that if the assets of the corporation were insufficient to pay all the debts due, the corporators were bound to contribute rateably to increase the capital to $j60,000; and it is conceded, on all hands, that the property of the corporation and the funds so to be raised, will be more than sufficient to pay all the demairds against both. The creditors, therefore, have no interest in the inquiry as to what debts were contracted by the association, and what by the corporation. The Court have, however, directed a reference to ascertain the fact, and the Master’s report on this subject has given rise to various exceptions, which, from the view I have taken of the case, it is not necessary to refer to particularly. The only possible object of the reference must have been to ascertain in what amount Boyce, Street, Pitray and Roger were liable, in the event of their being held not to be corporators, and the property of the corporation, with the addition to the capital by the corporators. If they are hot corporators or if they are, the inquiry would seem unnecessary, as, in the first instance, they are bound to contribute to the capital, and if not, there is no probability that they will ever be called on. It is due, however, to the order of the Appeal Court, that the amount should be correctly stated.
    The defendants, Boyce, Street, Pitray and Roger, except to the report, on the grounds—
    1st. That the association is charged with certain sums which the association owed, and for which the creditor accepted a draft on the treasurer of the corporation, and judgments obtained on the acceptances.
    2d. That it is also charged with certain sums of money borrowed by the corporation, to pay the debts of the association.
    The first exception is disposed of by the former Circuit Court decree. There is no evidence that these creditors agreed to accept the promise of the corporation in satisfaction of their demands; on the contrary, all the defendants concede their liability, except these four. In the event of the funds of the corporation and the increased capital being insufficient to pay the debts, and Boyce, Street, Pitray and Roger being held not to be liable as corporators, they must only be liable to contribute rateably towards the payment of the debts due by the association; and although the terms of the order would seem to indicate the necessity of taking an account of all the debts contracted by the association, it is only important to ascertain what portion of them still remain due.
    
      It is therefore ordered and decreed, That the Master do so remodel his report as to show what is the amount of the debts of the association now remaining unpaid, computing interest on the judgments and other interest-hearing contracts, without regard to any act or agency of the corporation, up to-the date of the report, and that he also re-state the accounts of the creditors, computing interest on the interest-bearing demands, either on the association or corporation, up also to the date of the report, showing how much of the debts of' the association, and how much of the corporation, remains, unpaid.
    March 31, 1846.
    The Master then thus remodeled his report:
    “STATE OF SOUTH CAROLINA, Charleston District. In Equity.
    To the Honorable the Chancellors of the said State:
    The decree in this case, filed 31st March, 1846, directs me-to state “the debts of the association now remaining unpaid, computing interest on the judgments, and other interest-bearing contracts, without regard to any act or agency of the corporation, up to the date of the report.” In exhibit A, herewith filed, I submit this statement.
    I am further to “re-state the accounts of the creditors, com-. puting interest on the interest-bearing demands, whether on the association or corporation, up to the date of the report.”
    In exhibit B, I submit this statement of the debts of the corporation-.
    I am also to- shew “how much of the debts of the association,- and how much of the corporation, remains unpaid.”— On reference- to- the exhibits A and B it will be seen that, with interest, to date on the interest-bearing demands,
    The debts remaining unpaid of the association are, $37,691 13
    The debts remaining unpaid of the corporation are, 5,322 10
    3,013 23
    Respectfully submitted,
    EDWARD R. LAURENS, Master in Equity.
    
    30th June, 1846,
    Exhibit A. — -.Debts of the Association.
    
    Executors of John Haslett, - - $2,432 94
    Int. from 6th March 1841, to 1st July 1846, 905 70
    -- 3,338 64
    W. J- Bennett, - - 431 38
    Int. from 29th Jan. 1842, to 1st July 1846 133 52
    - 564 90
    N. Hayden, - - ■> 44 00
    Int. from 4th Dec. 1839, to 1st July 1846, 20 25
    60 25
    
      Birnies & 'Ogrlvi.e, - - 302 86
    Int. from 4th June 1844, .to 1st July 1846, 43 95
    M6 81
    Moffett & Oalder, - - * - 835 91
    Int. from 4th June 1844, to 1st-July 1846, 117 03
    952 94
    Cornelius & Co. * - - 72 00
    Int. from 29th Jan. 1842, to 1st July 1846, 22 29
    94 29
    E. Thomas, - 181 55
    Int. from 4th Dec. 1839, to 1st July 1846, 83 30
    264 85
    J. C. Levy, Executor, - - 104 21
    Int. from 5th Dec. 1839, to 1st July, 1846, 47 93
    152 14
    Bank of the State - - - .15,000 00
    Int. from 28th Sept. 1840, to 1st July 1846, 6,046 13
    21,046 13
    J. Lawton, ~ - - - 100 05
    100 05
    Bail-Road Bank, - 925 ‘00
    Int. from 30th April 1341, to 1st July 1846, 334 75
    1,259 75
    Fire Loan - 6,500 00
    Int. from 19th Nov. 1839, to 1st July 1846, 3,010 38
    9,510 38
    $37,691 13
    Exhibit B. — Debts of the Corporation.
    Davids & Harrison, - - - . $10 71
    EcCartney & Gordon, - - * - 8 75
    Paul Jones, - - * >- . 125 00
    John S. Jones, - - - - - 111 05
    W. J. Bennett, - - . - - - 116 52
    Cornelius & Co. - - - - 673 gg
    Bank of the State, Insurance, - 2,000 00
    Int. from 1st Ebb. 1841, to 1st July 1846, 758 34
    2,758 33
    H. Gourdin, - 1,100 00
    Int. from 27th .Jan. 141, to 1st -July 1846. 417 92
    —- 1,517 92
    $5,322 10
    Excéptionsto the Report of Mr. Laurens, dated June 30,1846,
    1. That interest is allowed on W. J. Bennett’s debt.
    
      2. That interest is allowed on Birnies & Ogilvie’s debt.
    3. That interest is allowed on Moffett & Calder’s debt,
    4. That interest is allowed on Cornelius & Co’s debt..
    
      The same being unliquidated demands against the share holders in the Charleston New Theatre.
    PETIGRU & LESESNE.
    July 2d, 1846.
    The defendants appealed from the decree of Chancellor David Johnson, and relied on the following grounds of defence against the operation of the. same :
    1. That there is in said decree mistake in point of fact, in assuming that Mr. Laurens, after making a Report, changed it without authority. Also, in assuming that he disallowed interest on demands bearing interest; and also, in assuming that the amount of the subsisting debts of the Charleston New Theatre, and the amount of the assets of the company, and the sums received and paid away by the Trustees of the Company, are not ascertained by the Report.
    2. That the decree sends back the Report to ascertain and set forth matters already ascertained and set forth.
    3. That the only questions involved in this case are, 1. Whether the members of the Charleston New Theatre Company are liable as partners. 2. Whether the acceptance of the charter was a dissolution of the partnership. 3. Whether a member, by absenting himself from the charter meetings, is thereby discharged, either positively or sub modo, from his liability to creditors, or to his associates. 4. Whether the circumstances, as disclosed, by the evidence taken in this case, are sufficient to bring Boyce, Street and Roger within the operation of any rule, by which they can be released, either absolutely or sub modo, from their liability as members of the Charleston New Theatre. 5. What are the respective rights of the members who consent,and those who refuse to pay the debts of the Company. But for the proper decision and solution of these questions, the report of Mr. Laurens furnishes all the information that is needed, or can by any possibility be useful, and the Court should have proceeded to decree, that the members are liable as partners to creditors, and to one another. That there was no dissolution of the partnership, and that the recusant members are liable as well as the others to creditors; and that there is no ground to infer that any of the members have agreed or incurred any obligation to purchase the assets of the company at $60,000, or any other sum, or to buy the shares of recusant members, or to exonerate them from any liability, either in the way of debt or contribution.
    4. That the decree makes the members of the company in this proceeding against them individually, bound by the judgments obtained by Bennett, Birnies, Calder, and Cornelius, against the corporate body, and liable to pay the interest recovered in those actions, on demands not bearing interest.
    PETIGRU & LESESNE, Plaintiffs’ Solicitors.
    
    The defendants, Lewis A. Pitray and Thomas J. Roger, likewise appealed from his Honor’s decree, and moved that the same might be modified, for the reasons and in the particulars following, to wit:
    1. That the inquiry directed by the Court of Appeals, so far as the same relates to the debts of the Theatre Company, is limited to existing, unsatisfied, debts, which are to be discriminated into such as were contracted before, and such as were contracted after, the acceptance of the charter by a portion of the original association.
    2. That this inquiry should have been made by the Master with reference to the rules of law applicable to the questions manifestly reserved by the Court of Appeals in directing the inquiry; for which reason he ought to have discriminated between the supposed liability' of such of the members of the original association as did not become members of the corporation, first as to creditors for the debts, and second as to the stockholders of the corporation, or the trustees, for contribution.
    3. That the Master, in reporting the several debts enumerated in List No. 1, annexed to his report, as debts contracted before the acceptance of the charter, has violated the spirit and letter of the order of reference, by not distinguishing between the liability to creditors, and a supposed liability for contribution ; it being respectfully submitted that not one of the debts mentioned m the said list is an existing, unsatisfied debt of the original association, for which these defendants, as members of that association, and not of the corporation, are liable; inasmuch as all the said debts have been merged in judgments against the corporation, extinguished by the substitution of other securities, or barred by lapse of time, and the Statute of Limitations: nor can these defendants by any proceeding be made liable to such creditors.
    4. That the Master has manifestly erred in including the said debts in List No. 1, as debts of the original association, on the ground of a supposed liability of the members of the association to the corporation, or the trustees, for contribution; which, it is respectfully submitted, is not in conformity to either the spirit or letter of the order of reference: but it is also respectfully submitted, that if the liability to contribution were a sufficient ground for inserting the said debts in List No. 1, yet these defendants are not liable to the stockholders of the corporation, or the trustees, for contribution for the said' debts, for the following reasons: 1. That there is no existing .common liability which entitles the stockholders, or the trustees, to contribution. 2. That by accepting the charter, and disposing of the property of the association without the consent of these defendants, the stockholders and trustees have assumed the debts of the association, and released all equity to contribution. 3. That the debts for which contribution is claimed, were contracted without authority, and in violation of the express conditions of the original agreement. 4. That the trustees and corporation h ave, in fact, received funds, which were applicable, in the first place, to the payment of the debts of the association, more than sufficient to pay all the debts due, or contracted for, by the association, at the time of the acceptance of the charter of incorporation.
    5. That for these reasons, his Honor’ the Chancellor ought to have sustained the exceptions of these defendants, and ordered the Master’s report to be re-formed, by transferring the debts enumerated in List No. 1, to List No. 2, as debts contracted after the acceptance of the charter, and reporting that there are no existing unsatisfied debts of the original association, contracted before the acceptance of the charter of incorporation ; and that he should have ordered the report so reformed to have been sent up to the Court ,of Appeals, for the final adjudication of the cause by that Court.
    Wherefore, it is respectfully moved, that his Honor’s decree may be now so modified; and that such decree may be made in the cause, as if the Master’s report had been so amended.
    BAILEY & BREWSTER, Defendants’ Solicitors.
    
   Per Curiam.

Harper, Ch.

The question reserved hy -the former decree of this Court is whether the defendants, Boyce, Pitray, Roger, Street and Boinest, arc liable as members of the corporation, under the charter of 1837. We think it must be inferred from the decision in the case of the Steam Packet Company vs. McGrath, McMul. Eq. 193, that they are not so liable. In that case it did not appear that the deiendants had, in any manner, signified their refusal to accept the charter, yet they were held not to be corporators. It iseems that there must be some act or expression to signify .their acceptance of the charter, in order to charge them in the character of corporators.

The confusion and embarrassment which have appeared in the case have arisen from not discriminating between the effects of the decrees in the cause, as applied to the corporation and its members, as individuals, or as against the members of the association, as partners. ' Let us examine what are the' matters settled by these decrees. First: by the first Circuit decree, affirmed in this respect by that of the Court of Appeals,, the corporation is declared primarily liable for all the debts', of the association, though contracted previously to the grant of the charter. It is liable for its own proper debts and those of the partnership.

Then it is settled that if there shall not be found sufficient assets to satisfy creditors, the individual corporators are declared to be individually liable to make good the deficiency, to the extent pf sixty thousand dollars, deducting the capital, (about thirty-seven thousand dollars,) which has been actually paid in. I need hardly say that property possessed by the corporation, for which it was in debt, is not to be reckoned or regarded as part of the capital, either at an estimated value or according to its cost. Such is not the common understanding, and such was not the meaning of the decree.— Though the word may have been variously used, yet a man’s capital properly means the property which he has clear of' debt.' A' man with much property in his hands, but indebted to a still greater extent, would scarcely be called a man of large capital. As the market value of buildings is seldom equal to their cost, the capital was rather diminished than increased by the outlay in building and the debts contracted for that purpose.

Then there is no question of the liability of the corporation and corporators, for the interest on simple contract debts,, which was recovered at law, or the costs of the suits at law. This hardly needs illustration. If the interest was not properly recoverable at law, the corporation was bound to defend itself at law, and the judgments of tlie Court of law are binding upon üs. If the corporation had property out of which they could be made, the costs would be collected of course,, and the corporators are liable, as the corporation would have-been.

The Court does not think it necessary, at the present stage of the proceedings, to institute any inquiry as to the liability of the members of the association, in the character of partners. It seems to be taken for granted by the parties and the last Circuit decree, that the contributions of the individual corporators, to make up their capital, will be more than sufficient to satisfy all the debts; and indeed it seems evident enough that they will be so. The Court is unwilling to moot questions of doubtful character, as matters of speculation, when, practically, the determination of those questions, may never become necessary. If, contrary to expectation,. the fund provided shall prove insufficient, the creditors will be at liberty to apply to the Court, to determine the liability of the partners, and for further relief against them. Then will come up the questions which have been principally argued on the present hearing — -whether the acceptance of the drafts on the treasurer of the corporation, or the judgments obtained against it, operated an extinguishment of the debts as against the partnership ; whether the partnership is liable for interest improperly recovered against the corporation, or costs incurred by it; whether the Act of incorporation operated a dissolution of the partnership; and whether the partners may avail themselves of the lapse of time or the Statute of Limitations, <fcc.

It is not understood that there is any difference between the first report of the Master, Mr. Laurens, of the 13th February, 1845, and the second, of the 8th July, 1845, except that which is made by the calculation of interest and the inclusion of the costs at law, and the including of the mortgage debt in the latter report. The former report is applicable to the case, as we now consider it, as against the corporation and the individual corporators. The second is such as he supposes would be correct, if the account were against all the defendants as partners. The former report is, therefore, confirmed. The direction by the decree of this Court, of March, 1845, for a recommitment of the report, may have been supererogatory, as the case now stands. It was merely matter of inquiry, however, and concluded nothing.

A decree has been made, in another case, directing a sale of the mortgaged property, for the satisfaction of the amount due on the mortgages and the judgment against the trustees. It is not thought necessary now to give any direction as to the manner in which the deficiency shall be made up, in the event that the property, (perhaps aided by the amount of rents and profits, an account of which is directed in another case, if they shall be found applicable to the mortgage debts,) shall not sell for enough to satisfy these demands. The direction will be that the other debts reported be paid by the defendants who are corporators; the parties to be at liberty to apply for further direction in the event spoken of.

It is therefore ordered and decreed that the defendants who are members of the corporation, severally and equally pay and contribute so much money as may be necessary to satisfy the costs reported to be due by the said report of 13th February, 1845, and accruing interest, excluding the sum reported to be due on account of insurance paid by the Bank of the State, and interest thereon; as to which sum a further application may be made after the sale of the mortgaged property : provided that the aggregate sum to be paid by the said defendants shall not, when added to the amount of capital actually paid in, exceed the amount of sixty' thousand dollars. In the event of any of the said defendants proving insolvent, such deficiency to be made up by the equal contribution of the other said defendants. Costs of this suit, up to the present time, to be paid by the defendant corporators.