Court Opinion

ID: 6679356
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:19:16.216532+00
Date Added: 2024-06-11T09:10:34.236468
License: Public Domain

The opinion of the Court was delivered by
Mr. Justice Gary.
The above entitled actions were heard together by consent, the questions in each of the cases being the same. The defendants were sued as stockholders of the Globe Cotton Mills, which was incorporated under the act of the legislature of this State, entitled “An act to provide for the formation of certain corporations under general laws,” approved in 1886. 19 Stat., 540. In section 22 of said act it is provided, “That each stockholder in any such corporation shall be jointly and severally liable to the creditors thereof in an amount, besides the value of his share or shares therein, not exceeding five per cent, of the par value of the share or shares held by such stockholders at the time the demand of the creditor was created: Provided, That such demand shall be payable within one year, and that proceedings to hold such stockholder liable therefor shall be commenced within two years after the debt becomes due, and while he, she or it remains a stockholder therein, or within two years after he, she or it shall have ceased to be a stockholder.”
*4501 2 *449The defendants demurred to the complaint, but the demurrers were overruled, whereupon they appealed, upon the following exceptions: “1. Because he erred in overruling each of the demurrers of the defendants. 2. Because he failed to hold that the complaint in each of said actions did not state facts sufficient to constitute a cause of action, in that it appeared from each of said complaints that the alleged cause of action was contracted subsequent to the adoption of the present Constitution of the State of *450South Carolina, and of the general corporation law enacted thereunder by the General Assembly of said State.” The first exception is too general for consideration. In disposing of the second exception, it will be necessary to consider the following sections of article IX..of the present Constitution, to wit: “Section 2. No charter of incorporation shall be granted, changed or amended by special law, * * * but the General Assembly shall provide by general laws for changing or amending existing charters, and for the organization of all corporations hereafter to be created; and any law so passed, as well as all charters now existing or hereafter created, shall be subject to future repeal or alteration * * *. Section 16. All existing charters or grants of corporate franchise, under which organizations have not in good faith taken place at the adoption of this Constitution, shall be subject to the provisions of this article. Section 17. The General Assembly shall never remit the forfeiture of the franchise of any corporation now chartered, nor alter nor amend the charter thereof, nor pass any general or special law for the benefit of such corporation, except upon the condition that such corporation shall thereafter hold it's charter and franchise subject to the provisions of this Constitution; and the acceptance by any corporation of any provision of any such laws, or the taking of any benefit or advantage from the same, shall be conclusively held an agreement by such corporation to hold its charter and franchises under the provisions of this article. Section 18. The stockholders of all insolvent corporations shall be individually liable to the creditors thereof only to the extent of the amount remaining due to the corporation upon the stock owned by them * * *. Section 21. The General Assembly shall enforce the provisions of this article by appropriate legislation.”
The foregoing sections show that in order to make charters, in existence at the time the Constitution of 1895 was adopted, subject to the provisions of the said articles, it was necessary that there should be legislation to that effect. We *451naturally turn to the acts of the legislature to see if this has been done. In 1896 an act was approved, entitled “An act to provide for the formation of certain corporations and to define the powers thereof,” 22 Stat., 92, section 10 of which is as follows: “Any corporation heretofore created which has not forfeited its charter, and any corporation created by the General Assembly of 1894, may surrender its charter and secure a new charter under this act; and any such corporation, or any corporation created under this act, may have its name changed or its charter amended in any particular under this act.' Any corporations chartered previous to the approval of this act, desiring to increase its capital stock, shall, before such increase be allowed and resolutions be filed and recorded, pay to the secretary of state the fees prescribed in this act. Fees for said increase to be paid as on capital stock: $5 for all amounts up to and including $5,000, increasing as provided in section 9 of this act: Provided, That the granting of such new charter or such amendments shall not operate in any way to prejudice the claims of creditors of such corporation, or to relieve such corporation of any liability already created or assumed, but that, although operating under a new charter, it shall be regarded as the same corporation. In order to obtain such new charter or such an amendment of charter, the board of directors, trustees or managers shall call a stockholders’ meeting, giving at least thirty days notice of the time, place and purpose of said meeting, either by the mailing of written notice to each stockholder, or such meeting may be called by the president of the corporation, or by any stockholder owning in aggregate twenty per cent, of the capital stock, in the manner above provided. If a majority of the stock of the corporation be present at such meeting in person or by proxy, and a resolution asking for a new charter or an amendment of charter be adopted by a majority vote of the shares represented at the meeting, then the board of directors, trustees or managers, or a majority of them, shall certify such resolution, over their signatures, to the secretary of *452state. Such resolution petitioning for such new charter or amendment shall set forth the date of the original charter of the company, by reference to act of the General Assembly or to the record in the office of the secretary of state, and shall in other respects conform to the form of the declaration provided for in section 1 of this act. The secretary of state, upon the filing of such declaration, and upon payment of the charter fee in cases where an increase of capital stock is petitioned for, and upon the payment of a fee of $3, shall issue to the corporation a new charter, or an amended charter, in accordance with the terms of the petition * * There is not a single allegation in the complaint showing compliance with the requirements of said act so as to make the charter of the Globe Cotton Mills subject to the provisions of the new Constitution. The case must be determined, therefore, in accordance with the law of force when the new Constitution was adopted, which shows that there was no error on the part of the Circuit Judge in overruling the deniurrer.
It is the judgment of this Court, that the judgment of the Circuit Court be affirmed.