Cable v. McCune

Napton, Judge, delivered the opinion of the court. Our opinion in this case is based entirely upon the penal character of the statute we are called upon to construe. The corporation is required to publish an annual statement of their condition for the information of the public, and a failure to do so renders the stockholders responsible for a specified class of demands existing prior to or at the time of such publication. The object is to inform the public, who expect to have dealings with such corporations, of their probable responsibility. This liability, in the event of there being no required publication, does not depend upon the actual injury which the failure to publish may have occasioned in a given case, but is absolute, dependent only on the proof of publication or no publication. Such a statute can be regarded in no other light than a penal one ; and accordingly such was the view taken by this court of some of its provisions less penal than the one we are now considering, in the case of Kritzer v. Woodson, 19 Mo. 827. As no publication was made in this case of any kind previous to the claim now sued on, it is useless to inquire into the character of the claims or demands which such a publication [381] ought to embrace. It is not perceived that the corporations would be more embarrassed in stating claims against them for contested unliquidated damages than they would be in stating the debts due upon plain notes, the whole or parts of which might be disputed. Such a difficulty might be readily settled by holding the corporation responsible for the event. If willing to risk this, the claim could be omitted ; but if the claim was ultimately established, the publication would be defective in the meaning of the law. The question, however, here is, what class of demands is embraced within the words “ debts contracted ?” Our legislature did not go the length which others have in fixing the liabilities of the stockholders of these manufacturing corporations. They did not enact, as in many other states it is enacted, that the stockholders should be responsible for every liability established against the corporation, and which its assets turned out insufficient to meet. Such statutes as these, creating a general and determined liability not dependent on circumstances, becoming as it were a part of the very essence of the charter, may reasonably admit of a very different construction from a law which seems to recognize the general principle of individual irresponsibility subject to a very limited exception, and only ventures to hold out such responsibility as a penalty for a failure on the part of its managers to perform certain acts directed in the law .and supposed to furnish some advantages to the public. The statute, which Judge Story construed in Carver v. Braintree Man. Co. 2 Story, 432, was of this remedial character. That act declared that every member of the manufacturing company named should be liable in his individual capacity for all debts contracted whilst he was a member. There was no penalty for an omission or a commission; it was simply a recognition of the individual liability principle on the face of the charter. Called upon to construe such a charter, Judge Story held it to be remedial, not penal, and so viewing it he gave the word “ debt,” which was the term used, a very lib382 eral and extensive signification, to forward the manifest purposes of the law and the interest of society. Had our legislature taken the same step and boldly inserted such a provision in all their charters of this class of corporations, Judge Story’s views, forcible and reasonable as they are, ought to have great weight, in determining the construction of such a statute. Judge Story concedes that the interpretation he gives to the word “ debts” is a very loose one, and in short is making it synonymous with “ demands.” He substituted for the words “ debts contracted,” the phrase “ dues owing” or “ liabilities incurred,” regarding them as essentially equivalent expressions. The result was that a demand founded on tort was equally within the meaning of the act with a debt liquidated or unliquidated. We do not feel ourselves authorized, upon well settled and long established principles, to take this liberal view of the word debts when used in our statute. Although the language is the same in the two statutes, ours is manifestly highly penal in its nature, whilst the Massachusetts act was considered by Judge Story as a remedial one. The demand sought to be enforced in the present action is certainly not a debt in the legal acceptation of the term, and it is, to say the least, doubtful whether it could be so regarded in its popular acceptation. The defendants are entitled to the benefit of such doubts. The popular meaning of a term may very properly be resorted to in ascertaining its construction in a purely remedial statute, and the plain objects of such laws ought not to be defeated by a narrow and technical definition. Unfortunately there are some words — and this word “ debt” is perhaps one of them — the popular meaning of which is unsettled and fluctuating and hard to be ascertained. Where there is room for doubt and the statute is penal, the safer rule is to adhere to that limited and definite sense to which long established legal usage has restricted it. The liability of the St. Louis Marine Railway and Dock Company to the plaintiffs was not a debt within the legal acceptation of that term as declared by Blackstone and other [383] writers of established authority. It was not “ a sum of money due by certain and express agreement.” Whether the suit against the company which resulted in the. judgment sought to be enforced against the defendant was one which would properly fall within the class of actions considered as founded on contract, or in, that class which is based upon tort, is a more difficult question to determine, if it was important that it should be determined at all. In the division of actions made by Blackstone, it would probably be considered as founded on contract; for his definition of actions upon implied contracts is comprehensive enough to embrace almost every action on the case, except slander, libel, assault and battery, and similar actions. In his sixth subdivision of actions upon implied contracts, Blackstone includes a variety of actions for what he terms breaches of implied duty or trust, which would comprehend almost every case of damage imaginable. This court, upon previous occasions, have treated actions like the present as substantially founded on tort, although a breach of contract is stated as inducement to the action. (Acks v. Ball, 14 Mo. 396; McDonald & Rew v. Forsyth, 13 Mo. 549.) So in New York, Judge Nelson, in the case of Heacock v. Sherman, 14 Wend. 58, considered .the action as one for damages upon a tort and not arising upon contract, although, upon Blackstone’s division of actions, that case, which was for the loss of a horse by reason of the failure of a corporation to keep a bridge in repair, might very well have been considered as an action for damages arising out of contract. There was an implied contract that the company should keep the bridge in repair, and by reason of their failure to comply with their obligations the damage resulted, and in this way the case might be,said remotely to be founded on contract. But the real gist of the action, in that case as in this, was a tort; namely, the negligence and misfeasance of the corporation’s agents, and the insufficiency of the bridge in the one case, and of the dock in the other, by which the damage complained of was sustained. Such damages can hardly, in popular acceptation, [384] be regarded as debts. Certainly it is by no means clear that tbe legislature meant to embrace such demands. We regret that in tbe examination of tbis subject we have been without any precedent to guide us. Tbe only case directly in point is the one cited from Massachusetts; (21 Pick. 455;) and that is undoubtedly against tbe conclusion to which we have arrived. An opinion of a court of such acknowledged ability as the supreme court of Massachusetts is entitled to great respect, but the circumstances under which that opinion was delivered detract somewhat from its importance as authority. The question arose incidentally upon the exclusion of a witness, and it would seem from the curt manner in which the court disposed of it that not much importance was attached to its decision. No investigation was made into the matter upon principle or authority, and it is easily inferred from a perusal of the case, which turned principally upon other points, that the question here considered was entirely a subordinate one, and its decision either way probably had no material influence upon the result. The statute under which the question arose seems also to have differed from ours in the use of the word “ contracts” as well as debts ; although the court did not, so far as I can perceive, attach any particular importance to this word. Under these circumstances, the case, as a mere precedent, does not appear entitled to great weight, notwithstanding the respectability of the court which decided it. On the other hand, the case of Heacock v. Sherman, 14 Wend. 58, is an authority, not only directly at variance with the decision of the supreme court of Massachusetts, but also entirely irreconcilable with Judge Story’s views in Carver v. Braintree Manuf. Co. 2 Story, 432. Judge Nelson, who delivered the opinion of the court in that case, refused to give a construction to the words “ debts contracted” that would embrace a demand for damages in an action founded on a tort. The other authorities referred to in the argument of this case are upon statutes essentially different from the one now under consideration. [385] I am not apprised of any views of sound public policy which ought to exempt the stockholders of the class of corporations, such as in this instance was sued, from all the individual responsibility which attaches to the members of ordinary mercantile partnerships; much less have I been able to perceive any reason for a distinction in the kinds of liabilities to which they ought to be subjected in the event of the insolvency of the corporation. The conclusion, therefore, to which we have arrived, has been, so far as I am concerned, reached with reluctance; but I am the better reconciled to it by a consideration that the provision in question is of comparatively recent origin, and is contained, not in the charter of the company, but in the general corporation law; and to go a step beyond the strict letter of the law might occasion surprise and perhaps produce injustice. The other judges concurring, the judgment is affirmed.* Footnotes [*] A motion for a rehearing was made in this case and overruled.