Court Opinion

ID: 6949263
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:29:17.885148+00
Date Added: 2024-06-11T16:08:01.568347
License: Public Domain

Walker, J. The first question which we propose to consider is, whether the cpurt erred in sustaining a demurrer to defendant’s second and third pleas, instead of to the plaintiff’s declaration. The first count of the declaration is clearly insufficient to entitle the plaintiff to recover on it, in not averring the manner in which due diligence was used. It does not anywhere allege when a declaration and copy of the note sued on were filed, nor does it aver any excuse for not obtaining judgment at the first term. For aught appearing in the declaration, the plaintiff may have been prevented from getting judgment at the return term by his negligence in not filing a declaration and copy of the note sued on in time for trial at that term; and if so, he thereby lost all recourse on the assignor, under the provision of the statute requiring diligence. Bestor v. Walker, 4 Gilm. R. 15. The declaration should have averred every fact necessary to show a right of recovery, and negative negligence on his part. This is the uniform practice, and it accords with the precedents. The second count seems to be equally defective. It avers that a suit was brought against the makers within one year after the note became due, which was duly prosecuted to judgment against the makers; and that execution was issued, and returned, no property of the makers in their county out of which to collect the same. That the makers were an organized and incorporated company, under an act to authorize the formation of corporations for manufactories, agricultural, mining and mechanical purposes, approved February 10th, 1849; and that no certificate stating the amount of capital stock fixed and limited by said company and paid in, as required by the eleventh section of that act, had been made by the president and a majority of the trustees of the incorporation, and recorded in the office of the county clerk of the county of Cook, where the business of the company was carried on; and that defendant was a stockholder in the company at the time the note was executed. Such a certificate was required, by the eleventh section, to be made and recorded in the county clerk’s office. And the tenth section provides for the consequence of a failure to comply with its requirements, and is as follows: “ All stockholders of every company incorporated under this act shall be severally individually liable to the creditors of the company in which they are stockholders, to an amount equal to the amount of the stock held by them respectively, for all debts and contracts made by such company, until the whole amount of capital stock fixed and limited by such company shall have been paid in, and a certificate thereof shall have been made and recorded, as is prescribed in the following section, etc.” Sess. Laws 1849, p. 89. As this section limits the liability of stockholders to the creditors of the company to an amount equal to the stock held by them, to hold defendant liable under it, there should have been an averment of the amount held by defendant. If it was intended to hold the defendant liable under the eighteenth section, there should have been an averment that the debt was due from the company to their laborers, servants, or apprentices, as that section only makes stockholders liable for such indebtedness. Or, if it was to hold defendant liable under the twenty-second and twenty-third sections of the act, there should have been an averment that the indebtedness of the company exceeded the amount of its capital stock, and the trustees had assented thereto, as these sections only give a right to recover against a stockholder under such circumstances. This count fails to show a liability under either of these provisions. This count was insufficient to sustain any judgment which could be rendered under it; and for that reason the judgment was erroneous. The evidence in this case most clearly fails to sustain the finding of the court below. If the finding was under the first count, the evidence failed to show when suit was brought, when judgment was recovered, and when declaration was filed. It was also verbal evidence to establish matter of record, for which purpose it was entirely incompetent. Suit was brought to the January term; judgment was rendered by default, and the evidence does not show why execution was not issued until in June. The first count of the declaration was insufficient, and still more so the evidence. If the finding was 'under the second count, it is equally unsupported by the evidence. The general issue puts the plaintiff upon the proof of every material allegation in his declaration, and there was not any proof that defendant was a stockholder in this company. This averment was, beyond all doubt, material, and should have been proved. Both counts, imperfect as they were, have not been proven, and the judgment of the court below must be reversed. Judgment reversed.