Case Name: Margaretha E. Gulliver v. Joseph Roelle
Court: Illinois Supreme Court
Jurisdiction: Illinois
Decision Date: 1881-03-18
Citations: 100 Ill. 141
Docket Number: 
Parties: Margaretha E. Gulliver v. Joseph Roelle.
Judges: 
Reporter: Illinois Reports
Volume: 100
Pages: 141–197

Head Matter:
Margaretha E. Gulliver v. Joseph Roelle.
Filed at Ottawa March 18, 1881
Rehearing denied September Term, 1881.
1. Stockholders in insurance companies—of their liability under act of 1889. The 16th section of the general Insurance law of 1869 makes shareholders and directors of insurance companies organized under that act, severally liable for all debts or responsibilities of their respective companies, to the amount by them subscribed; until the whole amount of the capital stock shall be paid in, and a certificate thereof recorded, as therein provided; and section 19 of the same act imposes the same liability on shareholders in companies organized under special charters, and brought under the provisions of the general law.
2. Same—“corporator” means shareholder. Under section 16 of the act, as well as sec. 2 of art. 10 of the constitution of 1848, the word “ corpora-tors ” is used in the sense of shareholders, and not in that of commissioners or promoters of the organization of the corporations.
3. Same—effect of act of 1869 on companies organised before its pas-sag e. Under the general Insurance law of 1869, the capital stock of companies doing business under previous charters was to continue the same as authorized in their respective charters, and all investments of their capital stock and surplus, according to their charters, were to remain unaffected by the general law.
4. Same—saving of charter privileges to previously formed companies. The exception in section 19 of the act, in favor of companies previously organized,' that they shall “also be entitled to all the privileges and powers granted” by their charters, secures to such companies, and prevents the general act from impairing, their privileges and powers to effect fire, marine, life and health policies of insurance. Matters performed in organizing were not required to be abandoned, and performed under the general law, but as to their subsequent dealings it was intended to bring them under the controlling power of the State,, to provide security to their creditors as provided in the general law.
5. Same—duty to procure Auditor’s certificate'. By the act, insurance companies organized under special charters were required to procure the certificate of the Auditor of the payment of all the stock subscribed, and record the same, as a condition to authorize them to continue in business, and relieve its shareholders from the individual liability imposed by the 16th section of such act.
6. Same—duty of Auditor to examine a/nd give certificate. An insurance company organized under a special charter prior to the passage of that law, may require the Auditor of the State to have its affairs examined, and ascertain whether all of its capital stock has been paid in and invested as required by its charter or the general law, and if so found, to give the requisite certificate, the same as if such company had been organized under the general law.
7. Corporation—right to impose further duties and liabilities. The acceptance of an amendment to the charter of a private corporation, which reserves the right to bring such corporation under any general law regulating the same, makes it subject to the power of the legislature to impose further duties and make restrictions not contained in the charter.
8. Declaration—in suit to enforce liability of stockholder for debt of corporation. In a suit by a creditor of an insurance company to enforce the individual liability of a shareholder under a law making stockholders liable to the extent of their stock until the entire capital stock is paid in and invested, and a certificate thereof made and recorded, the declaration averred that the defendant had subscribed for fifty shares of the capital stock of the company, and that the whole amount of the capital of the corporation had not been paid in, and that no certificate of such payment had been given or recorded, as required by the statute, but on the contrary not more than one-half of said capital stock had ever been paid in to said company: Held, on demurrer, that the declaration showed a right of recovery.
Appeal from the Superior Court of Cook county; the Hon. Joseph E. Gaby, Judge, presiding.
Messrs. Shufeldt & Westoveb, for the appellant:
1. The legislature had the right, under the constitution, to make the provisions of the general law of March, 1869, applicable to all insurance companies theretofore organized and transacting business in this State. Constitution of 1848, art. 10.
2. Independent of the foregoing proposition, in the case at bar, the accepted amendment to the charter of the company expressly stipulating that the company should be subject to any general law thereafter passed on the subject of insurance companies, brings the company fully under all the provisions of the general law of March, 1869. McLaren v. Pennington, 1 Paige Ch. 102; Miller v. The State, 15 Wall. 478; Tomlinson v. Jessup, id. 454; Suydam v. Moore, 8 Barb. 358; In re Reciprocity Bank, 22 N. Y. 9; Sherman v. Smith, 1 Black, 587; In re Oliver Lee’s Bank, 21 N. Y. 9; Stanley v. Stanley, 26 Me. 191; Butler v. Walker, 80 Ill. 345.
3. The liability upon the appellee, a stockholder, under section sixteen of the law of March, 1869, is to the creditors Of the corporation personally, and is no part of the company’s assets. Paine v. Stewart, 33 Conn. 516; Bank of Poughkeepsie v. Ibbotson, 24 Wend. 473; Moss v. McCullough, 7 Barb. 279; Harger v. McCullough, 2 Denio, 119; Burr v. Wilcox, 22 N. Y. 551; Dutcher v. Central Nat. Bank, 11 Nat. B. Reg. 457; Culver v. Third Nat. Bank, 64 Ill. 529.
4. The appellant, a creditor of the company, has an action at law against appellee, a stockholder, for the amount of appellant’s claim against the company, limited by the amount of appellee’s liability, to-wit, an amount equal to his stock. Culver v. Third Nat. Bank, 64 Ill. 529; Paine v. Stewart, 33 Conn. 516; Stanley v. Stanley, 26 Me. 191; Burr v. Wilcox, 22 N. Y. 551; Spear v. Crawford, 14 Wend. 20; Garrison v. Howe, 17 N. Y. 458; Adkins v. Thornton, 19 Geo. 325 ; Bank of Poughkeepsie v. Ibbotson, 24 Wend. 473; Lowery v. Inman, 46 N. Y. 119; Harger v. McCullough, 2 Denio, 119; Judson v. Rossie Galena Co. 9 Paige, 597.
5. The ease of Butler v. Walker, 80 Ill. 345, is nearly parallel with the ease at bar, and unless overruled is decisive of this.
Messrs. Hoyne, Horton & Hoyne, for the appellee:
Section 19 of the general Insurance law of 1869, makes an express exception with respect to the capital stock and the investment and assets of companies that were already organized under special charters.
Capital stock is the sum divided into shares which is raised by mutual.subscription of the members of a corporation, and upon which calls may be made. Bouv. Law Dic. 240; Angell & Ames on Corp. secs. 556, 517; 1 Sandf. Ch. 280; 28 Barb. 318; 4 Zeb. 195.
There is another very important exception made by section 19, that companies already organized under special charters “shall also be entitled to all the powers and privileges granted by said charters. ” This clearly manifests an intention to save to all such companies all the powers and privileges they had before, without limitation or restriction.
We cite a few authorities on the principle, well recognized in the construction of all statutes, that the courts will' not so construe them as to affect vested rights, or give them a retroactive effect. Dash v. Van Vleeck, 7 Johns. 477; Van Valkenbergh v. Torrey, 7 Conn. 252; Sayre v. Kisner, 8 Ward, 661.
A statute will not be construed to be retroactive if all its language will bear a prospective construction. An intent to violate the constitution will not be assumed. New York and Oswego Midland Railroad Co. v. Van Horn, 57 N. Y. 473.
This court has repeatedly had occasion to decide, that as a general rule a statute is to operate in future only, and is not to be construed so as to affect past transactions. A retrospective effect will not be given, unless it clearly appears such was the will of the legislature, especially where it tends to produce injustice or inconvenience. Thompson v. Alexander, 11 Ill. 55; Marsh v. Chestnut, 14 id. 227; Bruce v. Schuyler, 4 Gilm. 221; Somerset v. Dighton, 12 Mass. 383.
Messrs. Cooper, Packard & Gurley, also for the appellee:
The declaration sets out an indebtedness from the Germania Insurance Company to the plaintiff, and alleges that the defendant is liable for that indebtedness because he was a corporator of that company, all the stock of which was never .paid in, etc. Neither the charter of the company nor any amendment thereto requires that the stock shall be fully paid in, or any certificate thereof recorded, and hence no liability is shown by the facts alleged.
To hold a stockholder for the debts of a corporation because the latter has not collected all the stock subscriptions from its other stock subscribers, recourse must be had to the charter creating it, or to some statute the effect of which is that of an amendment to such charter. Angell & Ames on Corp. (10th ed.) sec. 41; ibid. secs. 591, 595.
There was no individual liability for the debts of the Ger-mania Insurance Company imposed upon its stockholders by the general Insurance law of 1869.
After declaring that the old companies, previously incorporated and doing business in this State, are brought under all the provisions of the law, the statute proceeds to make three exceptions, each one of which, we submit, is fatal to appellant’s cause of action:
■ 1st. That “their capitals may continue of the amounts and character named in and authorized by their respective charters during the existing terms of such charters.”
2d. That “the investments of the capital and assets of such companies may remain the same as prescribed by their charters, anything in this act to the contrary notwithstanding. ”
3d. That “such companies shall also be entitled to all the privileges and powers granted by said charters.”
Conceding that by section 19 of the act of 1869 the Ger-mania Insurance Company was brought under all the provisions of that act, yet it does not follow that its trustees and corporators are liable for its debts, as prescribed by section 16.
In Hawthorne v. Calef, 2 Wall. 10, the repeal of a law making subscribers of a corporation liable for its debts after a debt was contracted, was held unconstitutional.
Upon this point, see further: Cunan v. State of Arkansas, 15 How. 304; Green v. Biddle, 8 Wheat. 1; Bronson v. Kinzie, 1 How. 311; McCracken v. Haywood, 2 id. 608; Woodruff v. Trapnal, 10 id. 190; Slee v. Bloom, 19 Johns. 456; Wheeler v. Frontier Bank, 23 Me. 308; Ireland v. Palestine Co. 19 Ohio St. 369; Enfield Toll Bridge Co. v. Conn. River, 7 Conn. 44.

Opinion:
Mr. Justice Walker
delivered the opinion of the Court:
The. questions presented by this record have been before us on previous occasions, but we do not content ourselves by saying stcvre decisis. More elaborate and thorough arguments have been made and filed than had been presented in the former cases, and new issues and questions have been raised and discussed. We have, therefore, owing to their importance, reviewed the grounds on which those decisions were based. In doing so, we have devoted more time to their investigation and discussion than is usual in deciding cases. Ho case in this court has, perhaps, ever re'ceived more thorough investigation. We will now proceed to announce some of our reasons and the conclusions reached.
The main question involved is, whether the 16th section of the general Insurance law imposes any liability on shareholders in companies organized under that act, and if so, does section 19 of the same act impose the same liability on shareholders in companies organized under special charters, and brought under the provisions of the general law ? The 16th section reads: "The trustees and corporators of any company organized under this act shall be severally liable for all debts or responsibilities of such company, to the amount by him or them subscribed, until the whole amount of the capital of such company shall have been paid in, and a certificate thereof recorded as hereinbefore provided."
The true meaning of the words "trustees and corporators, " as used in this section, is the matter of dispute in this case. On one side it is claimed that the word "corporator" is used as and for a shareholder; whilst on the other it is denied that it has or was intended to have such a meaning, but is used as synonymous with commissioner or promoter in organizing the company. It can scarcely admit of a doubt that the general and popular meaning of the word "corporator" concurs with the highest lexicographical authority,—that it means a member of a corporation; and all know that to be a member of a stock company a person must be a shareholder, or to be a member of a mutual company, a policyholder. This is so plain that the citation of .authority is unnecessary. And there can be no doubt that such is the sense in which the term is used in the 2d section of article 10 of the constitution of 1848. That section provides: "Dues from corporations not possessing banking powers or privileges shall be secured by individual liabilities of the corporators, or other means, as may be provided by law." It is impossible to sup- pose the body which framed this section ever supposed that holding the persons named in a charter for purposes of organization liable, would afford security to the creditors of these great bodies, transacting annually millions of dollars of business. That body could 'have intended nothing short of the liability of stockholders, or some other equivalent security. This being so, the constitutional requirement operates as an imperative command on the General Assembly, and being under that obligation, we must presume that body, in framing a general incorporation law, would endeavor to discharge the duty thus imposed. We can not, therefore, suppose that body would, for the purpose of affording the security, gravely insert the provision contained in the 16th section, simply to hold the promoters liable to the full extent of their subscription for stock, when each may have never subscribed for a dollar of the stock of the company, or may, at the time of its organization, have had but slender means, or been of doubtful solvency. It is impossible to call this security for the vast debts and liabilities of these companies. No such purpose can be justly imputed to any legislative body. Much less, as has been suggested, can it be supposed that body intended only to render the promoters of the organization liable, by enacting that section, for the comparatively trifling expense of preparing the charter and procuring the necessary subscriptions for the capital stock. For such expenses the corporation is not liable, and they are in no sense dues or liabilities of the corporation, and liabilities of the company only are embraced in the provisions of the 16th section. Railroad Co. v. Sage, 65 Ill. 328; Insurance Co. v. Smith, id. 309. Is such a presumption reasonable, when the General Assembly have made no other provision for the security of the creditors of such bodies? No one can deny that it was intended to impose a'liability on some class of persons, to the amount of stock by him or them subscribed, until all of the stock was paid and the certificate recorded. And it seems to be apparent that the term "corporator" was used in its ordinary sense, and can not with reason be referred to any other than shareholders in the company.
If, then, as there seems to be no doubt, this is the true interpretation of the language of that section, as applied to shareholders in companies organized under the general law, what effect has the 19th section produced on companies organized under special charters and the stockholders therein ? That section provides, that "all insurance companies heretofore organized in the State of Illinois, and now doing business in this State, are hereby brought under all of the provisions of this act, except that their capitals may continue of the amounts and character named in and authorized by their respective charters during the existing term of such charters, and the investments of the capital and assets of such companies may remain the same as prescribed by their charters, anything in this act to the contrary notwithstanding; and such companies shall also be entitled to all of the privileges and powers granted by said charters. "
Inasmuch as the General Assembly, in granting an amendment to the charter to this company, expressly reserved the right to bring it under any general law regulating insurance companies that might be adopted, and it accepted the amendment, this case is free from the question of legislative power to impose further duties and make restrictions not contained in the charter. That power can not be questioned in this case, and when the meaning of the 19th section is ascertained, it only remains to apply it to this company and its stockholders. Then what effect did- the adoption of that section produce on this company ?
The first clause of that section, in terms, brings this and all other insurance companies doing business under charters from the State, and within its limits, under all of the provi sions-of the act. But to the enactment there are several exceptions. There is an exception that their capital may continue the same as authorized by their charters, both in character and amount, and the investment of their capital and assets may remain the same as required by their charters, and they shall be entitled to all the privileges and powers granted by then: charters. It is not denied that this company, to some extent and for some purposes, was controlled by the general law; but it is insisted that these exceptions diminish the operation of the- act to a mere nominal control,—that it does not affect any of the powers granted by the charter, nor has it enlarged its powers or duties.
The charter of this company authorized it to invest or loan its capital on stocks, bottomry and respondentia, or in bonds and mortgages, or on personal security. Now, if its capital and surplus were thus invested, by the exception they could so remain; nor was the company required to increase its capital to conform to the general law, as it was by the exception exempted fromvsueh requirements, and the last clause saves to the companies acting under special charters all of the privileges and powers granted by their charters. This last reservation is claimed to be repugnant to the provisions of the act which impose any duties or requirements not contained in the charter, and impair their corporate rights.
It is urged that the charter provided, that when $100,000 shall be subscribed, and $10,000 paid in, and the stock not paid in shall be secured by mortgage on real estate worth at least fifty per cent more than the amount secured, or by pledge of public stocks of the United States, or any of the States or counties therein, or incorporated companies, etc., the company may organize and commence the transaction of business, and to bring this company under the provisions of the general act would infringe this right and be repugnant to the savings of the section. This is, we think, a misconception of the true meaning of the statute. If the stock was paid in or invested as authorized by the charter, thee19tli section, in terms, permits it to so remain, unaffected in the slightest degree. The charter required security or investment to be made in the securities enumerated, and it must have been done as required, and if so, that investment was protected, and nothing further was required by the act to be done in regard to the security or investment of the capital. There was no infringement of any of its chartered privileges or powers by the first clause of the 19th section, as limited by the last clause of that section.
Then what was intended by the last exception in the section, "and such companies shall also be entitled to all the privileges and powers granted hy said charters ?" This manifestly secured to them, and prevented the act from impairing, their privileges and powers as insurance companies. By the charter this company was empowered to effect fire, marine, life and health insurance. This was its privilege, and such was its power. Nor is it shown, nor does it appear, that any or either of these privileges or powers are impaired by any provision of the act, nor have counsel pointed out any right that is or can be so affected by the general law. Its further purpose was to secure to companies brought under the provisions of the act the unimpaired enjoyment of the franchises and powers conferred by their charters, and not granted by the general law. If their charters contained grants not conferred hy the act, they were preserved in full force, but it was intended to bring them under the controlling power of the State, to provide security to their creditors, as provided in the general law.
It is unreasonable to suppose that the General Assembly would do so inconsistent an act, as in the first clause of the 19th section of the law to bring all chartered companies of the State under the provisions of the act, and in the last clause exempt them from the operation of the act. Such folly can not be imputed to that body. It no doubt had a consistent purpdse in adopting both clauses, and we fail to perceive such repugnancy as repeals or abrogates either clause, but they may each be rendered operative. The General Assembly, by this language, only intended to require such companies to comply with such provisions as were practical. Matters which had been performed in organizing could not be required to be abandoned and annulled, to be performed under the general law. But it was intended that such companies should conform their business, pay or invest their capital as required by their charters, and be controlled by the general law in furnishing more capital when required, and subject to have their charters annulled in the mode therein provided, and they are brought under the provisions of section 16 as a part óf the plan for the government and control of all companies, whether organized under special charters or under the general law, to afford security to their creditors.
Then who are embraced in the term "trustees," in the 16th section? Manifestly the directors, or persons selected by the shareholders, at the time of organizing, to manage and control the affairs of the body. It can refer to no other class of persons. Such is its manifest meaning in the 4th section of the act, where the two are used as convertible terms. It provides for the election of "trustees or directors, " each of whom is required to own $500 worth of stock, and a majority to be citizens of the State. And the 11th section authorizes the corporators, trustees or directors, as the case may be, to make by-laws. Manifestly corporators here mean shareholders. It surely was not intended that the promoters of the organization shall, or even may, prescribe by-laws for the government of a company and the management of its future business, when they may not be members of the company. By-laws are not required until the company is organized, and under the 11th section, when organized, either the shareholders or the trustees or directors, as they may be designated, may adopt by-laws. If the charter pro vides that the shareholders shall adopt them, they may act in conformity to the charter. So of the trustees or directors, whichever they may he called, when the charter so provides. This is done after the company is organized, and the section can not, by any construction, apply to the promoters.
It is also insisted, that had the General Assembly intended to render shareholders in comiianies transacting business under special laws liable, provision would have been expressly made by which the certificate that the stock was all paid could have been obtained. Such a conclusion does not necessarily follow. If the intention was to hold them so liable until paid or secured, and the certificate obtained and recorded, the means are undeniably provided by the statute,—if not in terms, then it can be had in the most practical manner.
The General Assembly has provided that certain preliminary steps shall he taken and observed in organizing a new conrpany. The last, and that which licenses the company to transact its business, is the certificate that all of the capital stock required by the charter has been paid in, and is possessed by the company, in money or in such stocks and bonds and mortgages as are required by the 8th section of the act, which certificate, made by the Auditor, is required to be filed in the office of the clerk of the county, and is declared the authority for the- commencement of business by the company. Why require the capital stock to be paid in and held in money, stocks, bonds or mortgages ? Obviously, as we have seen, to afford security to the creditors of such companies, to the full extent of their capital stock. This security was one of the controlling purposes of the act, and in obedience to the requirements of the constitution, and to render the payment of the capital stock certain, the shareholders were rendered liable to the amount they should severally subscribe until all of the stock should be paid in, and the certificate of the fact by the Auditor was procured, filed and. recorded, as required by the 10th and 16th sections. This is clearly the requirement and the reason that prompted the action of the General Assembly as to the liability of shareholders in companies organized under the general law.
The same reasons existed for requiring the same security to creditors of companies specially organized as those formed under the general law. There is not, nor can there be, the slightest reason for a difference, in this respect, between the two kinds of companies. The requirements of the constitution were the same with both. The necessity for securing creditors is as imperative in the one class as the other. Hence the enactment of the 16th section creating the liability of shareholders in companies organized under that law, and of the 19th section bringing all companies acting under special charters under the same liability, and of the 21st section, which requires them to report to the Auditor the condition of their companies on the first day of January of each year, giving the amount of capital paid in, and in what manner invested, together with other information. From this it is clear that in these several respects the intention was to place both classes on precisely the same footing,—to create the same liability in every respect, unless exempted by their special charters. They were not exempted from procuring and recording the certificate required by the 10th and 16th sections, nor were the shareholders exempted from paying in or securing their capital stock, or from the liability imposed by the 16th section, or the companies relieved from investing their capital in the mode prescribed by their charters, or according to the requirements of the general law. They were made subject to the performance of these acts.
Until the certificate required by the 10th section was procured and recorded, a company organized under the act is not authorized to transact business, and when companies specially organized were brought under the provisions of the general law, it devolved on them to procure a similar certifi cate, and record the same, to authorize them to continue in business, and to relieve the shareholders from the liability imposed by the 16th section.
Having ascertained this to be the intention of the law makers, it devolves upon the courts to so construe the statute as to effectuate their intention. It is manifest that the same law which subjects companies organized under special charters to the duties and liabilities imposed by the general law, by implication imposes the same duties upon the Auditor, upon proper application of the company, to make the requisite examination, and give the necessary certificate if upon such examination the facts should warrant it. The company could, therefore, have required the Auditor to examine, or cause to be examined, the affairs of the company, and ascertain whether all of the capital had been paid in or secured, and invested as required by its charter or the general law, and if he so found, to give the requisite certificate, which could have been filed and recorded.
It would be useless to require this company to perform the acts necessary to organize a new company. If the shareholders had secured the balance of their subscriptions, or had paid it, and it was invested as required by then- charter, that, under the exceptions in the 19th section, would be held payment and investment of the capital, within the meaning of the 8th section, and would require the Auditor to grant the necessary certificate, which could have been recorded as required.
We are aware that in the case of Chase v. Lord, 6 Abbott, (N. C.) 268, the New York Court of Appeals gave a different construction to a section of the Insurance law of that State. The section of that law is in some respects similar to the 16th section of our act. It is this: "The trustees and corporators of any company organized under this act, and those entitled to participation of the profits, shall be jointly and severally liable until the whole amount of the capital raised by the company shall have been paid in, and a certificate thereof recorded as herein provided." It will be observed the language of the two sections is not the same, but it is not important at this time to determine whether their meaning is the same.
Under that law, a company was formed in that State, and for a time transacted business, and then failed. Before its failure, the company took a risk insuring a vessel and its cargo, which were lost. The assured thereupon sued the executor of one of the shareholders who had paid his stock in full, but a portion of the subscribers had not paid, nor had the certificate that all of the stock had been paid ever been procured and recorded. The circuit court held the executor liable, and rendered judgment against him, and he appealed to the Supreme Court, where the judgment was affirmed, and is reported in 16 Hun, 369; The case was taken to the Court of Appeals and the judgment was reversed by a bare majority, three of the judges dissenting.
That case is not a construction of the statute that is authoritative with us, as it was made subsequent to the adoption of our statute, and if ours is a copy of a provision of their statute, it is not binding on us. Again, including the judges of the Supreme Court, there were six judges who held the stockholder liable, and four who held the reverse doctrine. Again, on turning to the opinion of the Supreme Court and the dissenting opinion of the judges of the Court of Appeals, the reasons for their conclusions are, to our minds, more forcible than those in the authoritative opinion of the Court'of Appeals. The number of the opposing and dissenting judges impairs the authority of such a decision.
It is said the declaration is insufficient. It avers, "that the whole amount of the capital of said corporation has never been paid in, and no certificate of such payment has been given or recorded as required by the statute of Illinois, but, on the contrary, not more than one-half of said capital stock subscribed has ever been paid into said company. " There is an averment that defendant had subscribed for fifty shares of the capital of the company. These averments are admitted by the demurrer. Each subscriber undertook and became liable by his subscription to pay the full amount in cash, and the 16th and 19th sections of the general law impose continued liability on all subscribers, whether they have paid in full or not, until all of the stock is paid, and a certificate thereof is obtained and recorded. If all of the stock of the company was not paid, and the certificate not obtained and recorded, there was a liability for the amount prescribed by the 16th section of the law.
The declaration in the case avers, and the demurrer admits, that no more than half of the capital has been paid into the company* Had it all been paid in, and invested as required by the charter or the general law, and the certificate been obtained and recorded, it may be the company would not have proved insolvent, and plaintiff would have been paid out of the funds the company should have had from the subscribers for its stock. At any rate, defendant and all other stockholders in the company would have been relieved from liability. The company no doubt procured credit on the supposition that all of the stock had been paid ' to the company, and was available to pay all liabilities of the company.
We are, for these reasons, of opinion, that the construction we have given to the 16th and 19th sections, on the facts stated in the declaration not overcome by a defence, renders appellee liable to pay the amount of appellant's claim against the company, and that the court below erred in sustaining the demurrer.
The judgment is reversed and the cause remanded.
Judgment reversed.