Southmayd v. Russ

Hüsmer, Ch. J. This is an action of scire facias to enforce the payment of a judgment against the Middletown Manufacturing Company, from the members who compose it. By an act of the general assembly, the company were created a corporation. Aware, however, of the hazard to ■which creditors might be subjected, if they could have recourse to the corporation only, for the satisfaction of their debts, the legislature subjoined a provision to their charter, in the following words : “ That the persons and property of the members of said corporation, shall, at all times, be liable for all debts due by said corporation.” This novel condition renders-it necessary to enquire after the purpose for which it was introduced. The object in view may be ascertained without much difficulty. The legislature intended to invest the company with corporate powers, and so to limit them that the responsibility of the members for the company debts should not be impaired. In other words, the incorporation was not to have any effect on the subject of individual indebtedness. For the [56] company’s debts, the members were “at all times” tobe liable. Had the provision stopped here, after a declaration of their liability merely, perplexing questions would have arisen. When is this liability to commence ? Is it to be original and absolute ; or to arise on the non-payment of executions obtained against the corporation ? To answer these enquiries, the expression “ at all times,” was inserted. The entire phrase denotes, with perfect clearness, that so soon as a debt is contracted, it becomes obligatory on the natural persons comprising the corporation, as contradistinguished from the legal or artificial person. If the individual members were not original debtors, they would not, “ at all times,” be responsible. To sustain the argument that they are liable conditionally, or *on the happening of an event posterior to the contract, the recited clause must be expunged. The original and absolute indebtedness of the members demonstrates the manner of their responsibility. They are answerable precisely as if there had been no incorporation. The debt is no sooner incurred, than their liability commences. This, undoubtedly, was the object of the clause on which I have commented ; as the words, without any strained interr pretation, evince. The construction is confirmed by the avoidance of many inconveniences and embarrassments, which a different explanation would occasion. It is likewise recommended, by its perfect equity. While the members of the company enjoy all the privileges of a corporation, their creditors possess the rights, and are entitled to the remedies, which are furnished, by established law, against an ordinary copart-nership. Had I entertained any doubts on this subject, they would have been dissipated, by reflecting on the only interpretation, other than the one I have given, of which the act is susceptible. The objections made by the defendants’ counsel, to the enforcement of the judgment in question, by scire facias against the members of the company, have been so numerous as greatly to confirm the opinion I have expressed. The present action against the defendants cannot be supported. Of consequence, I would advise the superior court to render judgment in their favour. Chapman and Brainard, Js. were of the same opinion.