Owen v. Purdy
Owen v. Purdy
Opinion of the Court
The determination of the questions presented in this case, requires an examination of the act of 15th February, 1844.
That act purports, from its preamble, to have been enacted in answer to a petition of the stockholders of the Bank of Wooster, praying to be restored to certain rights and privileges, once enjoyed, but which restrictive laws had taken away, or rendered unavailable, and at the same time expressing a willingness to be subjected to individual and personal liability. The act may be properly regarded as an amendment of the charter of the Bank of Wooster, offered to the stockholders for their acceptance. The most material amendment was contained in the second section; it personally affected the stockholders, and the assent required of them had special reference to that section. The section, however, was not confined in its operation to the stockholders,'but when the then stockholders should signify the required assent, it became a part of the charter, and applied to all future stockholders. The result would be, that, the amendment to the charter being accepted, any person who, after the 1st of March, 1844, became a stockholder in the bank, became liable, in his individual and private capacity, for every valid claim against the bank.
A strong illustration of the wisdom of this rule may be drawn from the present case. Assuming that a written declaration of assent was filed as the assent of the stockholders, though some of them did not in fact assent,.or unite in the declaration, and thereupon the bank, under directors chosen by the stockholders who did assent, proceeded with its business, using and enjoying the rights and privileges which the amended charter conferred, and obtaining credit and circulation for its notes on the faith of the security which a provision of that charter afforded, is it to be supposed that the legislature intended, that those stockholders should escape liability to the holders of those notes, by showing that assent was not
The law protects any stockholder who, his assent being requisite to the amendment of a charter, has not assented. If a personal charge is sought to be fixed upon him by virtue of such amended charter, he may deny that he assented — he is not concluded by any presumption arising from the acts of the other corporators or the corporate body. If his interest in the corporation, or rights as a stockholder will be affected by acting under the amended charter before it is accepted in the prescribed mode, he may invoke the aid of the state in a quo warranto, or, in an action by himself, the power of a court to restrain. But it can not be permitted that a corporator, though his assent be in the first instance required, shall stand by and consenting to the progress of a corporation under a charter, and then when his interest may so require, set up either as a claim or a defense, that, for want of his direct assent, the grant of the charter was not effective,, and the acts done were illegal.
Such being our view of the act of 15th February, 1844, we have to consider, whether the petition states facts sufficient to show that a liability under it has attached to the defendants? We do not think that the petition states an acceptance of the amendment in the mode prescribed by the statute. It can not by any fair construction be held as averring that each and all of the stockholders united in a written declaration of assent. But the averment that a written declaration was filed by the defendants and others claiming to be stockholders'
It is objected, that the averment should show the particular acts the bank did, so that the court might decide as a question of law under which statute they were acting. But, we think, in such a case, a general averment as to the course of its business will suffice. The course of business pursued by the bank would show whether it was acting under the amended charter, and it would be neither proper nor.necessary that the various details, showing what the course of business was, should be stated in the pleadings. We do not think it can be supposed, that the business would have progressed in the same manner, whether the amendment had been accepted or not, as is suggested by the counsel for the defendant, in view of the admission of the stockholders in their petition to the legislature, that, without relief from -restrictive laws the bank would be unable to transact business.
It might be claimed that the averment of knowledge and consent on the part of the defendants was confined to the immediate antecedent — the issuing of bills and notes as money — but we think the intention and object of introducing the averment sufficiently shows that it ought not to be so limited. It has been said, that “ every corporator must be pre
Eor the reasons which have been given, we think the petition sufficient and that the demurrer must be overruled.
Demurrer to petition overruled and case remanded for further proceedings.
Dissenting Opinion
dissenting. This case comes before us upon special demurrer to the third amended petition of the plaintiff, and presents the single question — does the petition, as finally amended, contain a sufficient statement of facts to constitute a cause of action ? I think it does not; and will here state the reasons of my dissent from the opinion pronounced. in the case.
In the first place, I will premise, that inasmuch as the record shows that to each of the two preceding petitions in-this case a demurrer has been offered and sustained for like ■ cause, to-wit, that the petition did not state sufficient facts to constitute a cause of action, it is to be presumed that all the existing facts in the case that can in truth be stated, are expressed in this petition. It is, therefore, but reasonable, in passing upon this third demurrer, for the same cause for which the preceding demurrers have been sustained, that we take it for granted that counsel have stated all the facts necessary to constitute their cause of action, which they can. state consistently with truth, leaving no existing facts to be implied.
Do the facts stated in the petition as thus amended, then, constitute a cause of action ?
It is required by section 85 of the code of civil procedure that the petition shall contain “ a statement of facts, constituting the cause of action, in ordinary and concise lan
The original petition and each of the amended petitions show that the defendants were not liable at common law, upon the bank-notes, copies of which are set forth, and upon which a recovery is sought against the defendants.
The petition shows that the banking company was incorporated, and has ever since been in operation as a banking company, under its charter of February, 1834; that the act of February 21,1843, amendatory of its charter, was enacted and went into operation, and is still in force, unless superseded by the act of February, 1844. But the plaintiff’s only right of action claimed in this case, arises by force of this last mentioned statute. It is, therefore, incumbent upon the plaintiff, claiming such new right or remedy by virtue of a statute of 1844, to show that that statute is in force, and to state all the facts required by the statute to constitute the right of action, thereby given, or the remedy thereby afforded ; or, in other words, to state such facts as constitute a title or right to recover by force of the statute.
But the act of February, 1844, relied upon by the plaintiff, was only to take effect, as stated in the petition, when each and all the stockholders, parties to be affected thereby, should signify their assent to the liability mentioned in the act, and now claimed in the petition. The act could only take effect upon the happening of the condition prescribed. The plaintiff, must, however, state such facts as make the statute operative. Has he done it? His petition shows that the act was to be of no force or effect until “ each and all stockholders of said bank signify their assent to the liability, by
The object of the act is apparent. It was, not to make any one or two of the stockholders liable, but to make all liable by their all giving their express written consent thereto. This is the plain and obvious meaning of the act.-
The stockholder who was willing, in common with all other stockholders, to assume individual responsibility, might, with safety, file his written declaration; and, in case all the stockholders should concur with him, and respectively file their declaration of like assent, as prescribed, individual responsibility would be incurred — not by part of the stockholders, but by all; and such responsibility would have to be borne by all equally.
But the amended petition assumes a forced and unnatural construction for the act, and one utterly inconsistent with its language. It is assumed by the plaintiff that if one or more
There is nothing in any of the statutes mentioned in the-petition and relied upon, expressing or contemplating any such result. Nor is there even any averment in the amended petition that such is the meaning or intent of the statutes.
The following is the .statement of facts contained in the amended petition, constituting the only title of plaintiff, or right of action in the case: After setting forth the statute which was only to become operative, “provided that each and all stockholders of said bank do signify their assent,” etc.; the plaintiff alleges, that “ prior to the first day of March, 1844, to:wit, on the 23d day of February, A.D. 1844, the said defendants being then and there stockholders of and in said company, and so continuing until the commencement of this suit, did then and there, in connection with others, claiming to be and acting as stockholders of said bank, signify their assent to the liability mentioned in the second clause of said act, by then and there filing their written declaration thereof with the auditor of state, which written declaration of assent was filed by said defendants as aforesaid as and for a full compliance on their part, with the provisions of said act, and as and for their assent to the liabilities imposed by, and the rights, privileges and exemptions conferred by said act, and especially of the second section thereof, and was so received and filed by the auditor of state.”
The averments of the petition then amount to simply this— that by force of the statute the defendants became liable to pay the amount of said bank notes; and that the statute was to take effect upon each and all of the stockholders filing their declaration of assent, etc.; but the petition does not state that each and all the stockholders filed their written declaration of assent, or anything equivalent thereto. The plaintiff does not, therefore, show that the statute, under the opera
The petition, however, proceeds with the following additional statement of facts, upon which reliance is placed to show a right of action arising from the preceding statements, taken in connection therewith: “ And the plaintiff represents that the said banking company, after the filing of the said written declaration with the auditor of state, exercised and enjoyed all its corporate privileges, and exercised and enjoyed all the privileges and immunities and exemptions secured to them by said amendatory act, so accepted by them, and under said laws paid, received, issued, and put into circulation its bills and notes as money, by and with the knowledge and consent of said defendants, and so continued until the 28th day of Eebruary, A.D. 1845.”
The demurrer, it is said, admits the facts stated in this paragraph; and that those facts, tl}e acts and doings of the said banking company, may be regarded as constituting an estoppel, conclusive upon those who participated in them; and that, therefore, the defendants are estopped or precluded from denying that the Bank of Wooster accepted, as an amendment of its charter, the act of Eebruary 15, 1844.
But how can it possibly be shown that an estoppel arises against these defendants by force of any or all the averments so made by the plaintiff? The averment is that not these defendants, but the “ banking company,” that is, the makers' of the notes, who are not sued, “ exercised and enjoyed all; its corporate privileges and immunities and exemptions se cured to them by said amendatory act,” etc. If, then, these-facts constitute an estoppel upon the banking company, the-makers of the notes, it would be a sufficient answer that the-company, the party so estopped, is not a party in this action nor do the -averments, as made, show the plaintiff or defendants in any other relation than that of strangers to the acts so stated_; and a stranger can neither take advantage of, nor be bound by, an estoppel.
In.the case of Callender v. Painesville and Hudson R. R. Co., the defendants had held themselves out to the public as-
Again, it is not averred or shown that the banking company -ever exercised a single franchise, other, or in a more ample manner, under the act of February, 1844, than it had all along exercised, and had a right to exercise, under its original charter, or the act of 1843. Nor is it stated, in the petition, that said plaintiff received said notes of the banking company in confidence that the defendants were liable therefor; or that each and all of the stockholders of said bank had signified their acceptance of the said liability clause of the act of February, 1844.
Indeed, I can not perceive how the doctrine of estoppel has any application in this case. An estoppel only arises where one has done some act, or executed some deed which, upon principles of common honesty and fair dealing, would seem reasonably to preclude him from afterward averring anything to the contrary, and to the prejudice of those giving credit to such act or deed.
In the case of Pickard v. Seers, 6 Adol. & Ell. 475, the doctrine of estoppel in pais was very clearly stated, “ that where one by his words or conduct willfully causes another to
Reference
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- Daniel S. Owen v. James Purdy
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