Salt Lake City National Bank v. Hendrickson
Salt Lake City National Bank v. Hendrickson
Opinion of the Court
The opinion of the court was delivered by
This action is in assumpsit against Hendrickson, McKergan, Knauss and Woodruff. The declaration contains the common counts and one special count. The special count is, in substance, a count for money lent to the four defendants, as partners trading under the name of The New Jersey Milling and Furnace Company.
The defendants pleaded the general issue, non-assumpsit, and a special plea in bar.
The allegations in the special plea are, that Hendrickson, McKergan and Knauss, three of the defendants, in conformity with an act of the legislature of New York entitled “An act to authorize the formation of corporations for manufacturing, mining,- mechanical or chemical purposes,” filed a certificate and associated themselves together, and formed a body politic and corporate, under the corporate name of The New Jersey Milling and Furnace Company; that Hendrickson, McKergan, Knauss and Woodruff became stockholders in said corporation ; that the moneys in suit were lent and advanced to said corporation, and used by said corporation for its purposes; .and that the corporation, and not the said defendants as individuals, is liable for the re-payment thereof.
To this special plea the plaintiffs replied (1) that the certificate of incorporation contained certain false statements as to the citizenship of some of the corporators, whereby, by force of the laws of New York, the corporators, Hendrickson, McKergan and Knauss, three of the defendants, became jointly and severally liable for the plaintiff’s debt; (2) that
To these replications the defendants filed a general demurrer.
The replications are each and all defective and illegal, in several particulars.
1st. The declaration is founded on a joint cause of action against the four defendants. The first of these replications-sets up a joint and several liability on the part of three of the defendants; the second and third, a joint and several liability by two of the defendants, and the fourth, the several liability of each of the four defendants. As to the subject matter of the second and third of these replications, it was held by this court'that no action to recover on a liability, on those grounds,, could be maintained in this state; that the liability of trustees to pay the debts of the company, on their neglect to publish a report of the condition of its affairs, was in the nature of a penalty for official neglect of duty, which could not be enforced! out of the jurisdiction of the state which imposed it. Derrickson v. Smith, 3 Dutcher 166. See, also, Bird v. Hayden, 2 Abb. Pr. (N. S.) 61; S. C., 1 Rob. (N. Y.) 383.
2d. The personal liability of the officers and stockholders of a corporation, for a debt contracted by the corporation,, must, of necessity, be the creature of a statute. Personal
3d. These replications are bad on the ground that they abandon and entirely depart from the cause of action stated in the declaration. The declaration counts on an indebtedness arising from a loan of money to the defendants as partners. The plea averred that the money was lent to a corporation in which the defendants were stockholders, and riot to the defendants as individuals. The plaintiff, by pleading over sub silentio, admits, in his replications, that the money sued for was lent to the corporation, and resorts to an individual liability of the defendants, not arising out of a loan of money to them, but imposed by the laws of New York upon them as officers or stockholders of the corporation, for the failure to comply with the laws of New York in the organization of the company and the management of its affairs. A replication must support and fortify the declaration. A plaintiff, where an evasive plea is filed, may re-state his cause with more particularity and certainty in his replication, but he must not depart from any material allegation in the declaration. Troup v. Smith, 20 Johns. 33; 1 Chitty’s Pl. 644. In
The difficulty in the plaintiffs’ pleading is, that they seem to have put the whole of their real cause of action in the replication, and no part of it in the declaration. If they meant to ignore the attempted incorporation in New York, as was done in Hill v. Beach, 1 Beas. 32, they should have stood on their declaration, and gone to trial upon the case made in it. There is no obstacle in the way to prevent that course.
The plaintiffs, on the argument of this demurrer, attacked the defendant’s plea to which these replication were filed. The plea is clearly bad. It is an argumentative denial of the plaintiffs’ cause of action. The defendants, in this plea, say that the plaintiffs’ money was lent to the corporation, and the corporation is liable for its re-payment, and therefore we are not bound to pay it. But an objection of this kind is one merely of form, and was available only by special demurrer, when special demurrers were allowed, and now can be made only on motion to strike out. An argumentative plea is good on general demurrer. Com. Dig., “Pleader,” E 3; 1 Chitty’s Pl. 540; Spencer v. Southwick, 9 Johns. 314. And it is only where the defect in the prior pleading is in a matter of substance, such as would be available on general demurrer, that the rule applies that judgment on demurrer will be given against the party whose pleading is first defective. Brehen v. O’Donnell, 5 Vroom 408; Tubbs v. Caswell, 8 Wend. 129; Allen v. Crofoot, 7 Cow. 46; Lipe v. Becker, 1 Denio 568.
Judgment for the defendants on the demurrer.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.