Court Opinion

ID: 6752590
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:24:10.5449+00
Date Added: 2024-06-11T16:02:19.630583
License: Public Domain

BRINKBRHOPP, J.
This turnpike company having been chartered prior to the adoption of the present constitution of the state, its stockholders are not subject to the individual liability imposed by that instrument upon stockholders of corporations; nor is any such liability, other than for the payment of their stock subscriptions, claimed by the plaintiff to have been imposed upon them by any law prior to the passage of the act of May 3, 1852, “ defining the powers of plank and turnpike road companies.” 3 Curwen’s St. 1869. That act provides:
Sec. 1. “That it shall and may be lawful for any plank-road or turnpike company, heretofore chartered under the laws of this state, for the purpose of constructing any road authorized by their respective charters, and to provide for any present indebtedness which may exist against said companies respectively, to issue the bonds of such company, to the amount, including such indebtedness, of one half of the capital stock of said company actually paid in, and expended in the construction of such road; said bonds to be issued in such sums and in such forms as the board of directors of said *403several companies may each prescribe, and to bear interest and become payable at such time or times, and place or places, as they may severally designate; and for the redemption of which the faith of said several companies are hereby respectively pledged, together with the property, rights and franchises thereunto belonging, and which said" bonds shall not be subject to a higher rate of interest than that provided by law: Provided, that nothing herein contained shall be so construed as to authorize bonds to be issued of a less de nomination than one hundred dollars, or in the similitude of bank notes designed to circulate as money.”
Sec. 2. “That the stockholders of any company which shall issue bonds under the authority of this act, for the purpose of raising money with whieh to construct the road of such company, or any part thereof, shall be each individually liable for the payment of such bonds, over and above the stock by such stockholder owned, to a sum at least equal in amount to the stock owned by each, at the time the indebtedness on account of said bonds shall be created.”
Sec. 3. “ That any company that shall avail itself of the provisions of this act, shall be governed by and be subject to the provisions of any general law that may hereafter be passed for the incorporation of turnpike and plankroad companies.”
The subsequent act of April 8, 1856, “for the relief of certain turnpike and plankroad companies,” 4 Curwen’s St. 2756, provides:
Sec. 1. “ That where the shareholders of any turnpike or plankroad company are individually liable for the liabilities of such company, the proportion that each shareholder shall be required to pay to meet existing liabilities may be determined and collected in the manner provided by this act.”
Sec. 2. “ The directors of any such company, desiring to avail themselves of the provisions of this act, shall give notice to the shareholders for a meeting of the stockholders, specifying the time and place of meeting, and the object thereof.”
*404Sec. 3. “ At such' meeting, a detailed statement shall be submitted, showing the assets and indebtedness of such company.”
Sec. 4. “A majority of the stockholders at sueh meeting may determine upon the basis for assessing the shareholders to meet the indebtedness of such company, and fix the time or times and mode for the payment of the amount assessed against each individual or corporation.”
Sec. 5. “No one shall be liable beyond the sum fixed by the charter of such company, nor shall any one be so liable unless he was the owner of stock in such company at the time such indebtedness was contracted.”
Sec. 6. “ Any shareholder failing to pay as required the amount so assessed, shall be liable to an action in the name of such company, for the recovery thereof, as in other cases of indebtedness.”
Sec. 7. “ The notice required by this act shall he given by publication, for at least thirty days, in all the newspapers published in the counties in and through which the road of such company may be located.”
The mode of making assessments directed by this act, seems, from the allegations of the petition, to have been regularly followed in making the assessments which this action seeks to enforce. And no question is made as to the regularity of the mode of making the assessments; but the right to make them is denied. And this leads us to a more careful scrutiny of the language of the acts above quoted.
The first section of the act of 1856, last above quoted, provides only “ that where the shareholders of any turnpike or plankroad company are individually liable for the liabilities of such company,” he may be assessed in the manner pointed out by that act. Not the indebtedness of the company alone, but the individual liability of the stockholder for such indebtedness, is the prerequisite to a rightful assessment under this act. What, then, is the individual liability for the enforcement of which assessments may be made under this act ? To determine this question, we must recur to the act of 1852, first above quoted.
*405By the provisions of the first section of this act, it will be seen that the turnpike companies, theretofore chartered, are authorized to issue bonds for one or both of two distinct objects — “for the purpose of constructing any road authorized by their respective charters, and to provide for any present indebtedness which may exist against said companies respectively ;” and for the redemption of such bonds, whether issued for the one purpose or the other, or for both, the faith, property, rights and franchises of the companies respectively are pledged; but the section is silent as to any individual responsibility of the corporators.
And the second section of this act provides, not that the stockholders shall be individually liable for the payment of all bonds issued under the authority conferred by the preceding section; not that they shall be liable for the payment of such bonds, whether issued “ for the purpose of constructing any road authorized by their charters,” or “ to provide for any then present indebtedness ” of the company, or for both purposes, but:
“ That the stockholders of any company which shall issue bonds under the authority of this act, for the purpose of raising money with which to construct the road of such company, or any part thereof, shall be each individually liable for the payment of such bonds, over and above the stock by such stockholder owned, to a sum at least equal in amount to the stock owned by each, at the time the indebtedness on account of said bonds shall be created.”
We are of opinion, therefore, that, under the provisions of this act, the individual liability of stockholders is limited to such bonds as may have been issued “ for the purpose of constructing ” the road authorized by the charter of the company, and does not extend to bonds issued for the purpose of providing for previously existing indebtedness of the company. .Eor the payment of the latter, the holders must look to the faith, property, rights and franchises of the company, as provided and pledged in the first section.
But the petition in this case distinctly shows that the assessment here sought to be enforced was made for the pay-*406meat, not only of the bonds issued for tbe purpose of constructing the road, but also for the payment of those issued to provide for the previously existing indebtedness of the company. This was unauthorized by law ; and the demurrer to the petition was, therefore, properly sustained.
Judgment affirmed.
Sutliee, C.J., and Peck, Gholson and Scott, JJ., concurred.