text:
    James A. Banet, Appellant, v. The Alton and Sangamon Railroad Company, Appellees.
    APPEAL PROM SANGAMON.
    A subscriber to railroad stock will be held liable to the payment of his subscription, although the legislature may have authorized and the directors of the company may have adopted a change of route from that first fixed by law, provided the change does not make an improvement of a different character, and his interest is not x materially affected by the alteration.
    Where the power to require payment from stockholders is vested in a board of directors, an action will not lie to recover instalments, unless all the prerequisites of the charter have been complied with.
    The appellees bring suit to recover of the appellant á certain amount of the appellant’s subscription for the stock of the appellees, and file their declaration, setting out that six persons therein named, and their associates, successors, and assigns, were created a body corporate and politic, under the name and style of the Alton and Sangamon Railroad Company; that the plaintiffs were and are the said body corporate and politic, and that on the day of , A. D. 1849, at the comity of Sangamon, a subscription book was opened, in pursuance of the charter, which book contained an article in writing in the words and figures following, to wit:

      “ We, the subscribers to the capital stock of the Alton and Sangamon Railroad Company, each one for himself, in consideration of receiving certificates for shares of the stock of said company, from Simeon Ryder, the president of the board of commissioners authorized to open the books for subscription to said stock, upon which we have paid five dollars on each share, which number of shares have been hereinafter subscribed by each of us, do hereby agree, in consideration of having received such certificates for shares of stock, and in consideration of being one of said stockholders by subscribing therefor, to pay the balance of the instalments due on stock by us subscribed, when the same may be called for by the board of directors of said company, when duly organized in conformity with the charter approved Feb. 27th, 1847.” And that on the terms and conditions of said article, in writing, the defendant subscribed in said book for thirty shares of said stock, and there and then paid five dollars on each share so subscribed for, and there and then received a certificate, as in said article mentioned. That on the day of A. D., eighteen hundred and , said body corporate and politic, became and was duly organized, in pursuance of said act, and afterwards and before bringing suit the defendant was required and notified by the directors of said company, to pay to said company for three instalments on his subscription for stock, the sums and at the time following, that is to say, $150 on the 28th day of June, 1850; $150 on the 24th day of August, 1850; $150 on the 24th day of September, 1850; $300 on the 24th day of October, 1850; $300 on the 10th day of December, 1850, and $300 on the 11th day of February, 1851, by means whereof the defendant became liable to pay to the said plaintiffs the several sums of money aforesaid, and being so liable, promised, &c.
    And the declaration further counts on the promise in writing aforesaid óf the said defendant, averring an organization in conformity with the charter of said company, and that on the day of 1852, certain instalments due on said stock of said defendant, had been called for by the board of directors of said company, amounting to the sum of $13.50, of which defendant had due notice by means whereof defendant became liable, promised, &c.
    And the declaration further counts on the indebtedness of said defendant, for divers calls on the thirty shares subscribed for by said defendant, said calls being duly made by the board of directors, and being so indebted, the said defendant promised, &c.
    The defendant filed his pleas, non assumpsit, and no such corporation.
    Replication and trial by the court. Exemplified copy of charter in evidence.
    A judgment was rendered pro formd, by Davis, Judge, at the November term, 1851, of the Sangamon Circuit Court, for $1,351, and Banet appealed.
    S. T. Logan and E. B. Herndon, for appellant.
    A. Lincoln, for the appellee.
   Treat, C. J.

On the 27th of February, 1847, the legislature passed “ An act to construct a railroad from Alton, in Madison county, to Springfield, in Sangamon county.” The 1st section provides, “ that Robert Ferguson, Simeon Ryder, Benjamin Godfrey, Thomas Clifford, Robert Dunlap, and William Martin, and their .associates, successors, and assigns, are hereby created a body corporate and politic, under the name and style of The Alton and Sangamon Railroad Company,’ for the term of thirty years, and by that name be, and they are hereby, made capable in law and in equity to sue and be sued, plead and be impleaded, defend and be defended, in any court of law and equity in this State, or in any other place, to make, have, and use a common seal, and the same to renew and alter at pleasure, and shall be, and are hereby, vested with all the powers, privileges, and immunities which are or may be necessary to carry into effect the purposes and objects of this act as hereinafter set forth; and the said company are hereby authorized and empowed to locate, construct, and finally complete a railroad from the city of Alton, on the Mississippi River, in Madison county, by the way of Carlinville in Macoupin county, New Berlin in Sangamon county, to the city of Springfield, in the county of Sangamon.” The 2d section provides, that “ the capital stock of said company shall consist of five hundred thousand dollars, and may be increased to one million of dollars, to be divided into shares of one hundred dollars each; ” and that the government of the company shall be vested in five directors, to be elected annually, one of whom shall be chosen president of the company. The 6th section appoints the persons named in the 1st section commissioners to open books for the subscription of the capital stock, and requires them to keep the same open until the whole shall be taken. °Xt further provides, that they shall require each subscriber to pay five dollars on each share subscribed at the time of subscribing. The said commissioners shall call a meeting of the stockholders, by giving thirty days’ notice in some newspaper printed in the county of Madison, and at such meeting it shall be lawful to elect directors of said company; and when the directors of said company are chosen, the said commissioners shall deliver said subscription-books, with all sums of money received by them as commissioners, to said directors.” The 14th section declares, that it shall be lawful for the directors to require payment of the sums subscribed to the capital stock, at such times and in such proportions and on such conditions as they shall deem fit, under the penalty of the forfeiture of all previous payments thereon; and shall give notice of the payments thus required, and of the place and time when and where the same are to be paid, at least ninety days previous to the payment of the same, in some public newspaper of this State, published in some one of the cities where the notice for the opening of the books for subscription to the capital stock may have been published.”

The commissioners met at Alton in March, 1847, and organized, by electing a president, secretary, and treasurer. Notice was regularly given of the opening of the books for the subscription of the capital stock. Books were opened in Springfield in 1849, under the direction of the commissioners. James A. Banet subscribed for thirty shares of the stock, paid the five per cent, required by the charter, and received a certificate of stock .from the commissioners. Although a resident of Springfield, he was largely interested in real estate situated in the immediate vicinity of New Berlin, the value of which would be much enhanced by the construction of the road through that place.

On the 3d of January, 1850, the commissioners declared that the whole amount of the capital stock had been subscribed, and the five per cent, required by the charter paid thereon; and they ordered an election for directors to be held at Alton on the 6th of February, 1850, due notice of which was given. At a meeting of the commissioners on the 31st of January, 1850, the subscription list was found tb embrace five thousand and sixty-eight shares of voting stock. Five directors were elected on the 6th of February, 1850, to whom the commissioners transferred the books of subscription, and the moneys arising from the first payment on the stock, with the exception of certain sums expended by the commissioners for surveys, services of agents, &c.

Between this time and the 11th of February, 1851, six instalments on the stock, amounting in the aggregate to forty-five dollars per share, were required to be paid at the ofBce of the treasurer of the company in Alton. The notices of the calls were signed by the president of the company, and regularly published in the Alton and Springfield newspapers. The directors kept then- office and held their meetings in the city of New York. It appears, from the minutes of the board, that the directors, from time to time, authorized these calls on the stockholders. In two instances, the president was directed to call for an instalment of five or ten dollars per share, as he should deem advisable; in other instances, the time when an instalment was to be paid was left discretionary with the president.

On the 29th of January, 1851, the legislature passed an amendatory act, authorizing the company to change the location of the road, so as to run the same direct from Carlinville to Springfield. The board of directors accepted the provisions of the act, and changed the route of the road accordingly. By this change, the line of the road is shortened about twelve miles, and the aggregate cost of construction considerably lessened. As now located, the road does not run within twelve miles of New Berlin. Banet actively opposed the passage of the law and the change in the route of the road. The alteration was generally desired by the stockholders. r

On the 22d of February, 1851, the corporation brought an action of assumpsit against Banet, to recover the sum of $1,350, the amount of the six instalments due on his stock on the 11th of February, 1851, according to the calls made by order of the directors. He pleaded non assumpsit and nul tiel corporation. And, on the state of facts above set forth, the court rendered a judgment, in favor of the corporation, for the sum demanded. The defendant prosecuted an appeal.. Two questions arise in the case.

First. Did the alteration in the charter exonerate the defendant from the payment of his subscription 1 In the solution of this question, the special reasons which may have influenced him to become a subscriber to the stock of the company, cannot be taken into consideration. It is not pretended, that he was induced by fraud or misrepresentation to enter into the engagement. His contract was voluntarily made, and it is absolute in its terms. It would not even be competent to show, that it was designed to be a conditional undertaking. The written contract must be its own interpreter. He agreed, in consideration of becoming the owner of thirty shares of the stock, to pay three thousand dollars, at such times and in such proportions as the board of directors should prescribe. The motives by which he was actuated are not the proper subject-matter of inquiry. For the purpose of determining the question of his liability, it is wholly immaterial whether he became a subscriber because he believed that the stock would of itself be a profitable investment, or because of the incidental benefit which he might receive from the construction of the road in the immediate vicinity of his lands. It was decided, in the case of Irvin v. The Turnpike Company, 2 Penrose & Watts, 466, that the benefit which results to individual property, by the incorporation of a company and the location of a public road, does not, in contemplation of law, enter into the consideration of the contract of subscription to the stock of the corporation; and that such subscriptions are made subject to the power of the legislature to change the location of the road, where the contrary is not expressly stipulated. The rule, in relation to contracts of this character, must be general in its operation. What will discharge one stockholder from the payment of his subscription, must be held to have the same effect as to others. If the defendant is to be relieved from the performance of his obligation because of the change in the route of the road, so must any other subscriber, although it should clearly appear that his interests would be promoted by the alteration. The matter of injury to one, or of benefit to the other, cannot affect their respective liabilities. The true question, then, is, not whether the defendant was deprived of any incidental benefit by the change in the location of the road, but whether the amendment of the charter worked such a change in the company as releases the subscribers from their engagements, at least such of them as have not assented to the alteration. A reference to the authorities bearing on this subject will not be inappropriate. In The Middlesex Turnpike Corporation v. Lock, (8 Massachusetts, 268, and the Same v. Swan, 10 Id. 384,) it was decided that a subscription to build a turnpike in a specified direction could not be recovered to construct a road in a different direction, although the change was authorized by the legislature, and assented to by the directors of the corporation. In The Proprietors v. Towne, (1 New Hamp. 44,) a subscriber was held to be excused from the payment of his subscription on the ground that the corporation had obtained an amendment of the charter, that materially changed the objects and character of the company. The Hartford and New Haven Railroad Company v. Croswell, (5 Hill, 383,) is a leading case on this subject. In that case, in 1833, the legislature of Connecticut incorporated a company to construct a railroad from Hartford to New Haven, and Croswell subscribed for ten shares of the capital stock. In 1839, the legislature authorized the company to procure and run a line of steamboats in connection with their road, and, for that purpose, to increase their capital stock to an amount not exceeding two hundred thousand, dollars. The amendment was accepted by the board of directors, and ratified by a majority of the stockholders. The corporation then brought an action against Croswell, to recover the amount of his subscription. The court held that the subscription could not be recovered, on the ground that the amendment to the charter effected an essential change in the company,—the addition of a new and different enterprise. In Clark v. The Monongahela Navigation Company, (10 Watts, 364,) and Gray v. the Same, (2 Watts & Serg. 156,) it was held that an alteration in the charter of an incorporation, by which additional privileges were granted to the company, was not such an invasion of the contracts óf subscription as would relieve the subscribers from their liability to pay; although the additional privileges might extend the liabilities of the company, and thereby affect the stockholders. In The Pennsylvania and Ohio Canal Company v. Webb, (9 Ohio, 136,) the court say: “ It is not every minute change which will absolve a subscriber from his engagements. In works of this kind, some power of regulation is retained by the legislature ; some discretion is confided to the agents who _ execute the details. Where the subscription is general, unincumbered with conditions, perhaps the stockholder has no reason to complain of any line of transit, which starts from the same point of business, accommodates the same travel and transportation, and substantially sub-serves the same general interests.” The cases of Wain v. The Turnpike Company, before cited, London and Brighton Railway v. Wilson & Fairclough, (6 Bingham’s New Cases, 135,) and Midland Railway Company v. Gorden, (16 Meeson & Welsby, 804,) recognize the same principles.

It follows, from these authorities, that an alteration in a charter may be so extensive as to work a dissolution of the contract of subscription. An amendment, which essentially changes the nature or objects of a corporation, will not be binding on the stockholders. A corporation formed for the purpose of constructing a railroad, cannot be converted into a company to construct an improvement of a different character, without the consent of all the corporators. A road intended to secure the advantages of a particular line of travel and transportation, cannot be so changed as to defeat that general object. The corporation must remain substantially the same, and be designed to accomplish the same general purposes, and subserve the same general interests. But such amendments of the charter as may be considered useful to the public, and beneficial to the corporation, and which will not divert its property to new and different purposes, maybe made without absolving the subscribers from their engagements. The straightening of the line of the road, the location of a bridge at a different place on a stream, or a deviation in the route from an intermediate point, will not have the effect to destroy or impair the contract between the corporation and the subscribers. V We regard these conclusions as reasonable and just, and as well calculated to facilitate the construction of improvements, and promote the best interests of the public and of stockholders. The incidental benefits which a few subscribers may realize from a particular location, ought not to interfere with the general interests of the public, and of the great mass of the corporators. These interests of the public and of the corporation may with propriety be consulted and encouraged, especially where the alteration will not. operate to depreciate the value of the stock. A shareholder has no cause to complain of the loss of a mere incidental benefit, which formed no part of the consideration of his contract of subscription. The difficulties attending the construction of a public improvement may not be fully known, when the charter is granted and the stock subscribed. The legislature possesses the power to provide a remedy, by authorizing the company to adopt a more feasible route, without obtaining the consent of all the corporators. A few obstinate stockholders should not be permitted to deprive the public and the company of the advantages that will result from a superior and less expensive route. The subscribers are sufficiently protected against any invasion of their legitimate rights. The original location must be pursued, unless a change is sanctioned by the legislature. The alteration must be accepted by the managers of the company, before it becomes obligatory on the stockholders. And the latter will not even then be bound, if their interests are materially affected by the alteration; and in such case, they may not only avoid the payment of their subscriptions, but recover back such sums as they have advanced thereon.

The alteration in the present case is not of such a radical character, as to exonerate the stockholders from the payment of their subscriptions. The general features and objects of the corporation continue unchanged. The termini of the road remain the same; the only change consisting in a deviation from an intermediate point. The work is still designed to accommodate the same line of travel and transportation, and promote the same general interests. The length of the road is reduced, and the cost of construction diminished. The change will be useful to the public, as the legislature has determined, and beneficial to the company, as the board of directors has decided; and the facts of the case clearly sustain both of these conclusions. The only injury that can accrue to any of the subscribers, will be the loss of some incidental benefit to their property; and that, as we have already seen, cannot be taken into consideration. If the charter had been so amended as to authorize the construction of a road from Alton to Vandalia or Shelbyville, or from Springfield to Beardstown or Peoria, instead of the one originally designated, the company would be committed to a new and difficult enterprise; and the stockholders might with much force and justice say, this is not the- undertaking in which we engaged, and not the stock in which we agreed to invest our funds.

Second. Were the calls legally made ? ' The power to require payment from the stockholders, is by the charter vested in the board of directors. No action can be maintained against a stockholder for an instalment on his subscription, until the board has directed the call to be made, and due notice of the amount, and the time and place of payment have been given. The subscribers are in no default, until these prerequisites of the charter have been performed. A call by the president, without the sanction of the board, would not be binding on the subscribers. The notice may properly be given by him, but it must be founded on the action of the directors. The calls in question were authorized by the directors, and were made substantially in pursuance of the provisions of the charter. The fact that the board authorized the president to determine the amount of some of the instalments, and to designate the times of payment, cannot be regarded as such a delegation of authority, as to render the calls invalid. The calls were based on the instructions of the directors, and must be considered as proceeding from them. They were virtually the acts of the board, and not those of its president. ’

The judgment is affirmed.

Judgment affirmed.


source: Caselaw Access Project

author: Treat, C. J.

license: Public Domain

text:
    Joseph Klein, Appellant, v. The Alton and Sangamon Railroad Company, Appellees.
    APPEAL PROM SANGAMON.
    A party subscribing for stock, if he pay the required instalment before the books are closed, will be held to pay the residue, although he did not pay on each share at the time of talcing the stock.
    A subscriber for stock cannot rescind his contract by forfeiting the payment made thereon; the right of forfeiture belongs exclusively to the corporation, to be used at its election; as the corporation may resort to the common-law remedy of an action, on the express promise to pay the amount of the subscription.
    This action was, like the preceding case, brought to recover the amount of subscription due on five shares of stock, subscribed for by Klein, in the books of the Alton and Sangamon Railroad Company. The terms of subscription will be found in the case of Banet. The case was decided by Davis, Judge, without the intervention of a jury, at November term, 1851, of the Sangamon Circuit Court. The facts appear in the opinion of the court.
    S. T. Logan and E. B. Herndon, for appellant.
    A. Lincoln, for appellees.
   Treat, C. J.

This record presents the same state of facts as the preceding case against Banet, except in the following par- ■ tieulars. It did not appear that the defendant had any interest in. property, the value of which would be affected by the location of the road through New Berlin. He subscribed for five shares of the capital stock, received a certificate therefor, and gave his promissory note to the agent of the commissioners, for the amount of the five per cent, required to be paid by the charter. He paid the note before the books of subscription were closed. The action was brought to recover five instalments due on his stock on the 10th of December, 1850, amounting to thirty-five dollars per share; the corporation had judgment for $175. But two questions are made, which did not arise in the case already decided.

First. It is insisted that the subscription was absolutely void, because five dollars on each share was not paid when the stock was subscribed. We shall not now enter into the discussion of. that proposition. The case must be decided against the defendant, whatever may be the law upon that question. The payment of the money before the books of subscription were closed, concluded him from raising any such objection. Beyond all doubt, he became a subscriber when the payment was made. His contract was then complete, and his liability fixed. The fact that his name already appeared on the books as a subscriber, may be left entirely out of consideration. And so of the giving of the note. If his name had been written in the books without authority, and he had afterwards, and while the books remained open, paid the five per cent, required by the charter, he would, from that moment, be estopped from denying that he was a stockholder. So in this case, if he was not originally a subscriber, he certainly became one when he paid the money. He entered into a binding obligation, when he made the payment, which he cannot now repudiate.

Second. The defendant claimed the right to rescind the contract of subscription, by forfeiting the payment made on the stock. There is no force in this position. The right of forfeiture belongs exclusively to the corporation. It was conferred as an additional remedy, to enforce payment from stockholders. The corporation may waive or insist upon a forfeiture. It may, at its election, pursue the cumulative remedy of a forfeiture of the stock of a subscriber in default, or resort to the common-law remedy, of an action on the express promise to pay the amount of the subscription. This principle is abundantly sustained by authority. Herkimer M. and H. Co. v. Small, 21 Wend. 273; Hartford and New Haven Railroad Co. v. Kennedy, 12 Conn. 499; Gray v. Turnpike Co. 4 Randolph, 578; Instone v. Frankfort Bridge Co. 2 Bibb, 576; Stokes v. Lebanon and Sparta Turnpike Co. 6 Humphrey, 241; Freeman v. Winchester, 10 S. & M. 577; Selma and Tennessee Railroad Co. v. Tipton, 5 Alabama, 787.

The judgment is affirmed. Judgment affirmed.


text:
    Simeon Ryder, Appellant, v. The Alton and Sangamon Railroad Company, Appellees.
    APPEAL FROM MADISON.
    The 6ity of Alton and individuals residing in New York, had a clear right to become stockholders in the company in question; and the city can give her proxy to whom she pleases.
    One stockholder has no right to direct as to whom the votes of another stockholder shall be cast.
    The dividends declared must be general on all'the stock, so that each shareholder may receive his proportionate share.
    A plea which avers that a party had refused to take certain stock for which he had subscribed, and that another person had agreed to take such stock, and that the commissioners had counted such stock to the latter person, is insufficient; the signature of the first subscriber should have been erased and that of the other substituted, or something should be done so as to hold the latter liable. A subscriber to stock cannot rescind his contract at pleasure.
    A subscription to stock, which is created by a charter requiring a certain sum to be paid at the time of subscription, will not be invalidated, if the party subscribing does not actually pay the requisite sum; provided he is a commissioner to receive the money and procure the stock to be taken.
    A stockholder of a company may produce and identify a paper in his custody; he may prove that he was the depositary of the muniments of the corporation. A corporator may verify the records of a company.
    The books of a corporation are competent evidence for the purpose of showing its acts and proceedings. Such books are sufficient to show prima facie that the prerequisites oC a statute have been complied with so as to give a corporation an existence.
    The books of a corporation are admissible for the purpose of showing the regularity and legality of its proceedings.
    As against a subscriber, the minutes of a board of commissioners for taking stock are presumptive evidence to establish that the requisitions of the charter had been complied with, and that the corporation came regularly into existence.
    This was an action of assumpsit, instituted by the appellees in the court below, to recover the assessments made on fifty-shares of stock which they alleged had been subscribed by the appellant, to the capital stock of said company. The declaration contains six counts, and alleges that the appellant, at two different times, to wit, on the 8th day of May, 1847, subscribed his name for twenty shares of said capital stock, and afterwards for thirty shares of said capital stock, making fifty shares, in the subscription book opened by the commissioners, under the following written heading in said book, to wit: “ Alton, May 8th, 1847. We, the subscribers to the capital stock of the Alton and Sangamon Railroad Company, each for "himself, in consideration of receiving certificates for the shares of the stock of said company, from Simeon Ryder, the President of the board of commissioners, authorized to open books for subscription to said stock, upon which we have paid five dollars on each share; which number of shares have been hereinafter subscribed by each of us ; do hereby agree, in consideration of having received such certificates of shares of said stock, and in consideration of being one of said stockholders by subscribing therefor, to pay the balance of the instalments due on stock subscribed by us, when the same may be called for by the board of directors of said company, when duly organized in conformity with the charter, approved February 27th, 1847.”
    To the declaration the appellant filed the following pleas : First. The plea of nul tiel corporation.

      Second. That the amount of capital stock required by the charter to be subscribed before the appellees could organize, had not in fact been subscribed.

      Third. That at the time when the appellant made the two several subscriptions, in the declaration mentioned, he did so in good faith, and with the understanding that all the subscribers to the stock of said company were to share equally in the benefits and profits of said road, and that their stock should be equal according to the charter of said company; that after he had made the said subscription, an arrangement was made among certain of the commissioners named in the charter of said company, and the city of Alton, and certain persons residing in the city of New York, for the purpose of injuring and defrauding said appellant, and without his knowledge and consent, and against his will; by which said arrangement, the city of Alton was permitted to subscribe the number of one thousand shares to the capital stock of said company, and the said persons residing in the city of New York, the number of two thousand shares, upon the express understanding and agreement that the New York subscribers should have the proxy of the city of Alton, in all votes of the said company, for the period of eight years; and that the stock of the New York subscribers should be preferred at six per cent, for a like period, thereby yielding and securing to the New York subscribers the whole and absolute control of the said road for the period of eight years, and to their stock, an unfair preference of the stock of the said appellant.

      Fourth. (Actio non, as to the thirty shares of stock.) That at the time when the commissioners named in the charter met for the purpose of ascertaining whether all the capital stock required by the said charter of the said company, had been subscribed, the said appellant refused to take the said thirty shares of stock, on account of the arrangement which had been made between the said commissioners and the city of Alton, and the New York subscribers, as is set forth in the third above plea. And, thereupon, Benjamin Godfrey, one of the said commissioners, agreed to take the said thirty shares of stock in lieu of the said appellant; and upon this agreement, the said commissioners (the said Benjamin Godfrey being present and assenting thereto,) counted the said thirty shares of stock as having been subscribed by the said Godfrey ; and, thereupon, voted and declared that the stock had all been subscribed as required by the charter.

      Fifth. (Actio non, as to the thirty shares of stock.) Because, neither at the time when he subscribed said shares, nor at any time since, did he pay five per cent, or any sum whatever, upon the said thirty shares of stock; and avers, that by the provision of the charter of said company, said appellant could not become,a stockholder in said company, unless he paid five per cent, upon the stock subscribed by him at the time of subscribing the/sgme.

      To the second, third, fourth, and fifth of said pleas, the appellees demurred ; and the demurrer was sustained by the court.
    The appellees, to sustain the issue on the first plea, then offered to prove by William Martin, who was and is one of the stockholders in said company, that a certain book contained the original minutes of the proceedings of the commissioners named in the charter; to which the appellant objected; but the court overruled the objection, and allowed the said Martin to be sworn and to testify to the above fact; to which decision of the court, in allowing said Martin to be sworn and to testify as a witness, the appellant at the time excepted. The said Martin having testified that said book contained the minutes of the proceedings of the commissioners, and that he was the secretary of said commissioners ; the appellees then offered to read in evidence, certain extracts from the minutes of said book, for the purpose of showing that the capital stock required by the charter of said company to be subscribed before said company could organize, had all been subscribed as required by the said charter; to which the appellant objected; but the court overruled the objection, and permitted said extracts from said minute book to be read in evidence; to which decision of the court, in overruling said objection and permitting said minutes to be read, the appellant at the time excepted.
    After said minutes had been read in evidence, the appellees then proved that the defendant had subscribed the stock mentioned in the declaration; and, also, that the instalments on the stock had been assessed, and the calls for the same had been regularly made, as required by the charter of said company; which being all the evidence in the cause, the court, Underwood, Judge, presiding, (a jury having been waived,) found for the appellees at September term, 1851. Whereupon, the appellant, by his counsel, moved for a new trial; which motion was overruled, .and judgment rendered in favor of said appellees for $>1,750.00; to which decision of the court, in denying a new, trial, and rendering said judgment, the appellant, by his counsel, at the time, excepted. To reverse the said judgmenUthmffiiwafihS?'», Iant now brings this case into the Supreme Court^|pff'^||i^n£' the following errors:

      First. The court erred in sustaining the demurrer to the third, fourth, and fifth pleas of the appellant.

      Second. The court erred in permitting William Martin, who was a stockholder in said company, to be sworn and to testify as a witness in said cause.

      Third. The court erred in permitting the extracts from the minute book of the commissioners to be read in evidence, to prove that the amount of capital stock required by the charter, had been subscribed.

      Fourth. The court erred in overruling the motion for a new trial, and rendering judgment for the appellees.
    Levi Davis, for appellant.
    W. Martin and H. W. Billings, for appellees.
   Treat, C. J.

The second plea was not relied on at the argumént, and need not be further noticed.

The third plea presents no defence to the action. The city of Alton and individuals residing in the city of New York, had a clear right to become stockholders in the company. The commissioners possessed no power under the charter to exclude them, especially as there was no excess of subscriptions to the capital stock. The city had also a clear right to give her proxy to whom she pleased. It is none of the business of one stockholder, for whom the votes of another shall be cast. In this respect, each is at' full liberty to act as his judgment or interest may dictate. The arrangement between the city and the New York subscribers, that the latter should receive six per cent, interest on their investments, for the period of eight years, is not binding on the corporation, or the other stockholders. At most, it amounts to but a guaranty on the part of the city, that the dividends on the capital stock, for that length of time, shall be equal to an interest of six per cent, per annum. And this is a matter exclusively between the city and those subscribers. It cannot operate to the prejudice of the remaining stockholders. The dividends must be general on all the stock, so that each stockholder will receive his proportionate share. The directors have no authority to declare a dividend on any other principle. They cannot exclude any portion of the stockholders, from an equal participation in the profits of the company. If they should attempt to carry into effect any such understanding as this plea discloses, their action would be in gross violation of the rights of the other stockholders, and would not for one moment bind them.

The fourth plea is clearly defective. Conceding, for the purposes of this case, the power of the commissioners to permit one person to be substituted as a subscriber in the place of another, it does not appear from this plea that any such arrangement was consummated. The plea simply alleges that the defendant refused to retain the thirty shares, of stock, that Godfrey agreed to take them, and that the commissioners counted them as belonging to the latter. This does not show either that the defendant ceased to be a subscriber, or that Godfrey then became one. It fails to show a legal discharge of the one, or a binding assumption by the other. The intended arrangement was left incomplete and unconcluded. The agreément between the defendant and Godfrey remained unexecuted. The signature of the defendant should have been erased from the books of subscription, and that of Godfrey inserted in its place. It ought to appear, from the plea, that Godfrey could be made liable to the corporation, as an original subscriber for the stock. But the facts set forth in the plea, would not be sufficient to charge him as a subscriber. If he cannot be held liable as such, the defendant is still responsible on his subscription. The latter had no right to rescind his contract at pleasure, ajnd he yet continues liable thereon, unless he has been legally absolved from its performance. The plea did not show a valid discharge, and it was properly held insufficient.

The fifth plea attempts to invalidate the subscription of the defendant, because five dollars on each share was not paid when the stock was subscribed. If he was to be considered as an ordinary subscriber to the stock of the company, the plea would present an interesting and important question. It was held, in the case of Jenkins v. The Union Turnpike, 1 Caines’s Cases, 86, that where an act of incorporation requires a certain sum to be paid at the time of subscribing, the direction must be complied with, or the contract of subscription is void. A similar decision was afterwards made, in the case of the Hibernia Turnpike v. Henderson, 8 Serg. & Rawle, 219. The former decision was pronounced by the Court of Errors in New York, against a contrary ruling of the Supreme Court of that State; and the decision in Pennsylvania was made by a divided court. Although the rule has been adhered to in those States in ordinary cases of subscription, their courts have repeatedly refused to extend its application to cases like the present. In the Highland Turnpike v. McKean, 11 Johns. 98, it was determined that a party who was named in the charter as a commissioner, could not insist upon the objection. The court said; “ the defendant was a commissioner to receive subscriptions; and he subscribed, while the book was in his own hands. This was, no doubt, a valid subscription, so as to entitle the defendant to the stock subscribed; and it would be a useless ceremony for him to pay himself the money required to be advanced on the subscription.” In Grayble v. The York and Gettysburg Turnpike, 10 Serg. & Rawle; 296, the court say; “ the plaintiff in error was one of the commissioners, who had authority to receive the five dollars when he made the subscription. It would be a ridiculous ceremony for him to take his money out of one pocket, and put it in the other. Wherever the hand which is to pay, is the hand which is to receive, that is payment*and satisfaction, as between the parties, even at law.” In Clark v. The Monongahela Navigation Co. 10 Watts, 364, the court held that a subscriber who had exercised the rights of a Stockholder, by voting for managers of the company, was thereby estopped to deny the validity of his subscription, because he had not paid the sum required by the charter. These cases are decisive against the defendant. He is concluded from raising the objection. He was one of the commissioners named in the act of incorporation. He was in fact the president of the board, and in that character signed the certificates of stock issued to the subscribers. He had full authority to procure subscriptions to the stock, and receive the five per cent, directed to be paid by the charter. As respects the stock in question, he acted both as a commissioner and subscriber. In judgment of law, he received the money when he subscribed for the stock. The five dollars on each share subscribed by him was in his own hands for the use of the company, the instant his subscription was made. Besides ; it was his official duty to require payment from subscribers, and he ought not to be allowed to set up his violation of that duty to defeat the action.

Was Martin a competent witness for the corporation ? He was originally one of the commissioners, and the secretary of the board; and at the time he was called as a witness, he was a stockholder in the company. The general rule undoubtedly is, that a corporator cannot be called to testify on behalf of the corporation in which he is interested; but there are some exceptions to the rule, founded chiefly in considerations of convenience and necessity. A corporator may produce and identify a paper in his custody. The King v. The Inhabitants of Netherthong, 2 Maule & Selwyn, 337. A corporator may be called to prove that he was the depositary of the muniments of the corporation. The Union Bank v. Ridgely, 1 Harris & Gill, 324. The clerk of a corporation is a competent witness to identify its books and verify its records, although he is a member of the corporation, and interested in the suit in which the books and records are to be used as evidence. Wiggin v. Freewill Baptist Church, 8 Metcalf, 301. These authorities are conclusive of the question. Martin was called for the single purpose of identifying the minutes of the proceedings of the commissioners. For that purpose, he was clearly competent. His interest would exclude him from becoming a witness for the corporation generally.

Were the minutes themselves admissible in evidence? The books of a corporation are competent evidence for the purpose of showing the acts and proceedings of the corporation. Highland Turnpike v. McKean, 10 Johns. 154; Owings v. Speed, 5 Wheat. 420. Where certain steps are required to be taken before a corporation has existence, such as the opening of books, subscription of the capital stock, and the choice of directors; the production of the corporation books, showing the election of officers, is, primá facie, sufficient to show that the prerequisites of the statute have been complied with, and that the corporation has an existence. Wood v. The Jefferson County Bank, 9 Cowen, 194. In an action against a shareholder to recover the amount of his subscription, the books of the corporation are competent evidence to prove the existence of the corporation, and the regularity of the previous proceedings. Gray v. Turnpike Company, 4 Randolph, 578. The organization of a company may be established by the corporation books. Duke v. Cahawba Navigation Company, 10 Ala. 82. The books of a corporation are admissible in evidence, for the purpose of showing the regularity and legality of the proceedings of the corporation. Hall v. Carey, 5 Georgia, 239. In the present case, the minutes of the board of commissioners were properly received in evidence. They were admissible for the purpose of showing that the requisitions of the charter had been complied with, and that the corporation came regularly into existence. As against a subscriber, the minutes' are presumptive, but not conclusive evidence of these facts. It would be extremely difficult to establish them in any other mode. The commissioners had the general direction of the company until it was fully organized, and some degree of credit should be given to the record of their proceedings. The minutes must be presumed to be correct, until the contrary is made to appear.

The judgment is affirmed.

Judgment affirmed.


text:
    Charles Mason, Executor, &c., of Jesse Smith, deceased, Plaintiff in Error, v. William Fenn, Defendant in Error.
    ERROR TO MARSHALL.
    Where A leased to B a flouring-mill for a term of years, with the privilege to the tenant of making necessary repairs during the "continuance of the term for the convenient use of the mill, the expense of which repairs were to be deducted from the rent, and necessary fixtures put into the mill by the tenant were to be paid for by the landlord at the expiration of the term, or the tenant might remove them, and the tenant was obliged, during the term, to put in a new boiler, back-stand and mud-valve, in order to use the mill:—

      Held, 1st. That these improvements made in the mill were fixtures, but that they were subject to removal by the tenant while he remained in the possession of the mill under the terms of the lease. 2d. That the landlord having enjoined their removal while the tenant was in possession, could not object to the tenant removing them within a reasonable time after the dissolution of the injunction, though the tenant was not then in the possession of the mill. 3d. That the tenant having mortgaged said fixtures to secure the payment of his debt, and his creditor having brought an action of replevin to recover said fixtures against the landlord; it was agreed by the parties, that the property should remain in the possession of the defendant; but if it was decided that the plaintiff was entitled to the property, it should be delivered to him, or he should be paid its value.

      Held, under said agreement, that plaintiff was entitled to recover the value of the property, together with damages for its detention.
    This was an action of replevin, commenced by Fenn against Mason, in the Marshall Circuit Court, for one boiler for a steam-engine, one back-stand and one mud-valve, belonging to said boiler — said boiler, &c., the same that were sold and conveyed by John W. Baxley to said Fenn, by chattel mortgage, and then in possession of Baxley, at Smith’s Mill, in Lacón, at the time of bringing suit, in possession of said defendant in engine-house attached to said mill.
    When the officer was about to execute the writ of replevin, the parties agreed that the sheriff should • return the writ as having seized the property, and that the property should remain as it then was, in possession of the defendant, until the right of the plaintiff should be decided; and should the claim of the plaintiff to the property be sustained, the property was then to be delivered up to him, or its value was to be paid to him : the right to be determined as if the writ had been executed and possession taken. The case was submitted to the court, T. L. Dickey, J., presiding, at October term, 1851, upon an agreed statement of facts, which is embodied in the opinion of the court. The right to the property replevied was found to be in the plaintiff below. Damages for the detention of the property were assessed at $41.42.
    O. Peters, for plaintiff in errror.
    N. H. Purple, for defendant in error.
   Treat, C. J.

On the 23d of June, 1851, Fenn brought an action of replevin against Mason, executor of Smith. On the same day, the parties entered into an agreement as follows: “ It is hereby agreed by the parties to the foregoing suit, that the property claimed by the plaintiff in said suit, to wit, the boiler, back-stand, and mud-valve, may remain in its present position, in the engine-house, attached to said mill, in the possession of the defendant, and subject to his control, until the right of the plaintiff is decided, without prejudice to the rights of the plaintiff ; and should the claim of the plaintiff be sustained, the said property shall be delivered up to the plaintiff, or its value paid to him; the rights of the plaintiff to be the same as if the writ of replevin had been executed by taking the property into the possession of the sheriff.” The cause was submitted to the court, at the October term, 1851, on an agreed statement of facts substantially as follows: On the 27th of February, 1847, Smith leased to Baxley and Quick a steam flouring-mill in Lacón, for the term of two years from the 15th of March following, and Baxley and Quick agreed to pay as rent the sum of $600 for the first year, and $700 for the second year; and the lease concluded as follows: “ The said parties of the second part also agree to have said engine and mill run by good, sober, and competent men, and also put up a new set of wheat elevators, and also put a floor upon the basement; to be allowed the sum of $5.62 for putting up the wheat elevators, and to be deducted from the first payment of rent; the floor to be done as cheap as possible, and deducted from any payment of rent that may become due after the same is done; and other fixtures the said parties of the second part may put in said mill, beneficial to the same, at the expiration of said term said Smith agrees to pay for at a price to be agreed upon between said parties, or said parties to have the privilege of removing the same at the expiration of two years; said mill to be delivered up at the expiration of said term to said Smith, in as good repair as received, natural wear and fire only excepted.” Baxley entered under the lease, and continued in possession until some time in June, 1849. During the spring of 1848, it became unavoidably necessary, in order to use the mill, to procure a new boiler for the steam-engine, the old one having given out; and Baxley, after informing the agent of Smith, procured the boiler, back-stand, and mud-valve now in question, and had them set in the furnace in the engine-house attached to the mill, where they have since remained and been used in running the mill. On the 27th of January, 1849, Baxley made a note to the plaintiff for $500, payable on the 1st of November thereafter; and at the same time he executed a mortgage to the plaintiff on the boiler, back-stand, and mud-valve, to secure the payment of the note. The mortgage was duly acknowledged and recorded, and contained a provision that Baxley might retain the possession of the property. On the 7th of April, 1849, Smith obtained an injunction, restraining the plaintiff and Baxley from removing the property from the mill; and, at the October term, 1849, the injunction was dissolved, and the suit afterwards abated by the death of Smith. In November, 1849, immediately after the dissolution of the injunction, the plaintiff demanded the property, of Baxley and Smith; Baxley desired to deliver it, but Smith refused to let it be removed. At the expiration of the lease, in March, 1849, one year’s rent was unpaid; no settlement was ever made by the parties to the lease; and Smith never offered to pay Baxley for the property. The property was worth $350. The parties agreed that, if the plaintiff was entitled to the property, judgment should be entered in his favor for the value thereof. The court decided that the property belonged to the plaintiff, and that he was entitled to damages for the detention thereof, at the rate of six per cent, interest on the value, from the time the property was demanded of Smith; and judgment was accordingly entered in favor of the plaintiff, for $391.42.

We agree in opinion with the circuit judge, that the articles in question were fixtures within the agreement of the parties, for which compensation was to be made by the landlord, or the tenant might remove them at the expiration of the term. They were clearly of a beneficial character, for without them the mill could not be used. The old boiler became worthless, and it was absolutely necessary to the enjoyment of the demised premises that a new one should be procured. We are not inclined to hold, that the landlord had the right to retain the articles, because the tenant covenanted to restore the premises in as good a state of repair as he received them, with the exception of natural wear and casualty by fire. The parties could hardly have contemplated such extensive expenditures in the way of reparations. It was their intention, that the tenant should incur all necessary expense in keeping the buildings and machinery in repair; not that he should be compelled, at his own cost, to erect buildings, and provide new engines and boilers in the place of those that could not be repaired. For any additions to the property, in the way of repairs, the tenant could not demand compensation, nor could he detach the materials used arid take them away. But the old boiler, without any fault on his part, became incapable of being repaired, and without a new one the mill would not operate. It was not his duty, under such circumstances, to furnish a new boiler, at his own expense, for the benefit of the landlord. The articles in question were entirely new, and were put in the mill for the temporary convenience of the tenant; and they could be removed without detriment to the mill, and without injury to the landlord. The agreement secured the tenant compensation for these improvements, or the right to take them away at the end of the term. But, independent of this provision in the lease, he had the right at common law to make the improvements, and remove them during the term. As between landlord and tenant, improvements put on the demised premises by the latter, for purposes of trade or manufacture, and which can be detached without material injury to the estate, may be removed by him before he quits the possession. 2 Kent’s Com. 343; Archbold’s Landlord and Tenant, 365.

But the articles were not removed during the continuance of the lease, and it is, therefore, insisted that the tenant has lost his right to reclaim them. We think otherwise. He remained in possession of the premises after the expiration of the term, and, as we must presume, with the assent of the landlord. His right of removal continued so long as he was rightfully in possession. But he was prevented from exercising this right until long after he abandoned the possession, by an injunction sued out by the landlord. It would be wrong to permit the landlord to raise this objection, after he had interfered and prevented the tenant from availing himself of his privilege of removal. The tenant and his assignee, although out of possession, had a reasonable time after the injunction was dissolved within which to remove the property; and they have not forfeited their rights by any neglect to assert them. Immediately on the dissolution of the injunction, they endeavored to obtain the property, but were prevented from doing it by the defendant.

It is contended that the plaintiff was precluded, by the terms of the agreement, from claiming damages for the detention of the property. This position is not tenable. By the agreement, instead of recovering the specific property, he was to have a judgment for its value. The agreement did not embrace the matter of damages. If the plaintiff had insisted upon receiving the property, he would have been entitled to recover such an amount of damages as would compensate him for the loss of the use of the property while it was withheld by the defendant. Agreeing to receive the value, instead of the property itself, he was equally entitled to damages for the detention. The court considered his damages equivalent to six per cent, interest on, the property, for the time it was detained by the defendant. This compensation was not given in the way of interest, but because the use of the property was worth six per cent, on its value. It was but a mode of ascertaining the real amount of damages sustained.

The judgment is affirmed. Judgment affirmed.


author: Caton, J.

text:
    Milo Kelly et al., Plaintiffs in Error v. Daniel Chapman, Administrator, &c., Defendant in Error.
    ERROR TO LEE.
    In a proceeding for a mechanic’s lien, it is the duty of the party who complains of the verdict, to preserve the evidence in the record, either by a bill of exceptions or a certificate of the judge.
    Although it might be proper, in this proceeding, to order the sale to he made by a master or a commissioner, yet the same result is produced by the issuing of a special execution to the sheriff. The return of that officer would be a report of the sale, which, if not made in pursuance of law, might be set aside, and another sale ordered.
    The decree need not direct to whom the surplus money, if any, arising from the sale should be paid; that may remain subject to a future order of the court.
    The lights of a person who was not made a party, are not affected by the decree or any proceedings under it.
    This was a proceeding for the enforcing of a mechanic’s lien, commenced by Chapman in the Ogle Circuit Court, and taken by the change of venue to Lee county.
    The petition avers, that Chapman made a verbal contract with Milo Kelly and one Harvey Colburn, the then owners of a certain tract or lot of land in Ogle county, describing it, to perform labor and work as a mechanic and millwright, in the erection of a flouring-miB; that he commenced work, and labored for 208 days, for which the defendants promised to pay what the work was reasonably worth — no particular amount of work agreed to be done; avers, that work was reasonably worth $520; a balance of $397.76 was found due on a settlement, and note given as evidence of indebtedness. Prayer for the benefit of a mechanic’s lien against the land, &c., and for special execution.
    Moses Nettleton was made a party to the petition, it having been made to appear to the court that he was interested, as a mortgagee of the premises.
    Kelly answered the petition, denying that he bargained with Chapman; and avers, that he had no interest until after the work had been commenced, &c.
    The answer of Nettleton sets up two mortgages on the premises, which he holds as assignee, and that the mortgagors were owners at the time of the execution of the mortgages. Replications were filed to all the answers.
    This cause was tried at August term, 1847, of the Lee Circuit Court, by a jury, and a verdict found in favor of the petitioner for $391.61. The lien was ordered to attach, as prayed for, and a special execution directed to issue for the sale of the premises. The surplus, if any, after satisfaction of judgment and costs, to be paid to the parties who may be entitled to the same. It was further ordered, that Moses Nettleton, upon payment of costs, go hence without day.
    The respondents to the petition sued out this writ of error.
    E. S. Leland, for plaintiffs in error.
    Glover & Cook, for defendant in error.
   Caton, J.

Chapman filed his bill against Kelly and Colburn to enforce a mechanic’s lien under our statute. Subsequently Moses Nettleton appeared in court and filed his petition to be made a defendant in the suit, showing that he had an interest in the premises as the assignee of two mortgages which were older incumbrances than the complainant’s lien. By order of the court, the petition was so amended as to make him a party, and he answered setting up his mortgages, as in his petition, though more circumstantially. Kelly also answered, traversing a part of the statements of the bill, and also setting up new matter, as payment,-set-off, &c. He also states, in his answer, that he had executed to one Williams a mortgage upon the1 premises. As to Colburn, the bill was taken as confessed; and replications were filed to the answers of Nettleton and Kelly. At the August term the case was tried by a jury, who found the issues for the plaintiff and assessed his damages, for which a decree was entered directing a special execution to be issued for the sale of the premises, to satisfy the amount found due the plaintiff and the costs, and that the residue of the proceeds of the sale should “ be paid to the parties who may be entitled to the same, and it is further ordered that the said Moses Nettleton, upon payment of costs, go hence without day.”

Several objections have been urged to the judgment or decree in this case. The first which I will notice is, that the record contains no evidence to support it, and that it is uncertain what issues the jury have passed upon. The testimony was delivered in open court before the jury, and from it the jury have passed upon the issues submitted to them, and when that is the case the evidence could only appear upon the record by a bill of exceptions, or a certificate of the judge, as in an ordinary jury trial, and it is the duty of the party who complains of the verdict to preserve the evidence in the record, either by a bill of exceptions or a certificate of the judge, so that he might show to this court that the verdict is not supported by the evidence. This is the case whether we regard the trial as in an action at law or a feigned issue out of chancery. The verdict stands in place of the evidence. By it the facts are found upon which it is the duty of the court to pronounce the judgment of the law. The statute itself determines what the issues were which were submitted to, and determined by, the jury. The 7th section of chapter 65, Rev. Stat, under which this suit was instituted, provides as follows: Defendants in proceedings under the provisions of this chapter shall answer the bill or petition under oath, and the plaintiff shall except or reply to the answer as though the proceeding was in chancery; the answer shall be regarded as the plea of the defendant, and, by the replication thereto, an issue or issues shall be formed which shall be tried by the court, or by a jury under the direction of the court, as the court may direct or the parties agree.” This statute does not contemplate a feigned issue, according to the English chancery practice when questions arising in a chancery suit are tried by a jury, although, when the issues formed by these pleadings are complicated, it may be proper to simplify them by stating them to the jury in the form of simple interrogatories. In the statute itself, however, there is neither doubt nor ambiguity, nor in it is there any thing unusual, especially so far as the formation of the issues is concerned. By the replications the entire answers were put in issue, whether they contained denials of the averments of the bill, or new matter set up by the defendants in avoidance or defence. To maintain the issues on the part of the plaintiff he had to substantiate the averments of his bill either by the admissions of the answers or by testimony. When that was done it became necessary for each of the defendants to establish the defence set up in their answers respectively. The verdict shows that the plaintiff did establish his case, and that the' defendants failed to establish theirs. Had the defendant Nettleton proved the existence of the mortgages as set up in his answer, and this proof was not rebutted by evidence on the part of the plaintiff, the jury never could have rendered the verdict which they did, or, if they had, upon application the court would have set it aside in a moment. But, so far from complaining of the verdict, neither of the defendants asked for a new trial, but acquiesced in it without a straggle. It is now too late to complain that the verdict did not establish the true facts. Had the verdict established the truth of Nettleton’s answer, then other questions would have arisen which should have been determined before a final judgment or decree could have been rendered, such as the value of the improvement, and the value of the land without the improvement, so that the court could have distributed the proceeds of the sale between him and the plaintiff, according to the directions of the statute, for each would have had a preference to a portion. But the jury having found against Nettleton, none of these more complicated questions of fact arose.

It was further objected that no commissioner was appointed to make sale of the land, nor was the Master ordered to make the sale, nor was a report of the sale ordered to be made, nor has there been any such report or approval thereof. It would undoubtedly have been proper for the court to have ordered the sale to be made by the Master, or a commissioner might have been appointed for that purpose, but the same result was produced by the issuing of a special execution, which was done. That, of necessity, was directed to the sheriff, who was thereby commanded to sell the premises, and his return to the execution would be nothing less than a report of the sale, which, if not made in pursuance of law, might be set aside by the court, and another sale ordered. It is true the decree does not determine to whom the surplus, if any, should be paid, nor was that indispensable. That surplus would still remain under the control of the court, and might, by a subsequent order, be directed to be paid over to whoever should show himself to be entitled to it. It is by no means uncommon for the Court of Chancery to have funds subject to its orders, to be made on the application of parties interested.

Nor should the decree be reversed because Williams, to whom Kelly, in his answer, avers he had executed a mortgage subsequent to the date when the complainant’s lien took effect, was not made a party. It would have been proper, after the answer with this averment was filed, to have made Williams a party; but, instead of doing so, the complainant chose to take issue upon the fact of the execution of such a mortgage, and the jury have found against its existence. Had they found otherwise, it perhaps would have been indispensable to have brought him in; but that finding certainly is sufficient to prevent the defendants before the court from founding a complaint upon that averment, which was thus found to be untrue. The rights of Williams, who was not made a party, are not affected by the decree or any proceedings under it, if in truth he has any such rights. He may still proceed to foreclose his mortgage without injury by this proceeding.

The decree is not drawn with that formal precision which is desirable, but we think it substantially sufficient. If it were not, this court would make the necessary decree, as the record shows all that is necessary to warrant a final decree in the case. The conclusion of the order, “ that the said Moses Nettieton, upon payment of costs, go hence without day,” was particularly objected to, as determining nothing definitely as to him. The jury had found that he was not entitled to the relief which he had sought by being made a party to the suit; and it was proper, therefore, that he should be dismissed from the court without such or any relief, and that he should pay the costs which he had made by his interference. And such was the result of the order which was made by the court. A previous part of the decree had ordered the premises to be sold, and that out of the proceeds the plaintiff’s damages and costs should be paid. This, taken in connection with the order in relation to Nettle-ton, shows that the costs which the other defendants were liable to pay were meant. A proper understanding of the decree requires that the whole should be taken together.

Some other objections, of less importance, were made, which we do not think it necessary to notice particularly. Upon the whole, we are of opinion that the decree should be affirmed.

Decree affirmed.


text:
    Francis Burnap, Plaintiff in Error, v. Jason Marsh et al., Defendants in Error.
    ERROR TO OGLE.
    If an attorney who commenced a suit which is alleged to he malicious, knew that there was no cause of action, dishonestly and for some sinister view, for some ill purpose, or for some purpose of his own, which the law calls malicious, caused a party to he arrested and imprisoned, he will he liable therefor.
    If an attorney becomes the instrument for prosecuting and imprisoning a party against whom he knows his client has no just claim, or cause of arrest, and that his client is actuated by illegal or malicious motives, he is legally liable to the injured party.
    It is not necessary to show a conspiracy between attorney and client. An attorney may so act under his general employment to enforce a legal claim, as to render himself alone liable for a malicious prosecution or arrest.
    In an action against an attorney for maliciously suing out process, it is sufficient averment against him, that he falsely and maliciously, without having any reasonable or probable cause for so doing, sued out the writ, and falsely and maliciously caused the party to be arrested under it.
    The word “ prosecution,” in the statute of limitations, was intended by the legislature to embrace cases where a party has been maliciously prosecuted and imprisoned without cause, as well in civil as in criminal proceedings.
    This was an action on the case for malicious arrest, &c., commenced by Burnap against Marsh and Wight, as attorneys, for suing out a writ of ne exeat, and causing the arrest of Burnap.
    The action was commenced in the Winnebago Circuit Court, and taken by change of venue to Ogle county.
    The first count of the declaration complains that defendants on, &c., at Rockford, &c., without any reasonable or probable cause for so doing, but contriving and intending to imprison, harass, oppress, and injure the plaintiff, falsely and maliciously, as the attorneys and solicitors of Jacob Alberts, John R. Moore, &c., of Baltimore, &c., sued and prosecuted out of the Circuit Court for Winnebago county, a writ of ne exeat, directed to the coroner of that county, commanding the coroner to summon the plaintiff to appear before said Circuit Court on, &c., to answer to a certain petition exhibited against him by the said Alberts and Moore, and at the same time to cause the said plaintiff to execute a bond with security, payable to said Alberts and Moore, in §2,000, conditioned that he would not depart the State without leave of the said court, and that he would render himself in execution to -answer any judgment or decree which the said court might render against him in the premises; and in default of his giving the bond and security, to commit him to the common jail of said county, there to be kept in safe custody, until he should do so of his own accord. And the defendants contriving and intending as aforesaid, caused the writ to be and it was indorsed for bail for §2,000; and to wit, &c., contriving and intending as aforesaid, falsely and maliciously caused the plaintiff to be arrested under the writ, and to be imprisoned and kept in prison, to wit, sixty-four days, until the plaintiff, to procure his release, was forced to and did, to wit, on, &c., make and execute a bond, and procure divers sufficient persons to become sureties thereon, as and with condition required, whereas the defendants' had no reasonable or probable cause for suing forth the writ, nor for causing the plaintiff to be imprisoned; but, on the contrary, the arrest and imprisonment were wholly causeless and unlawful. And taliter processum est upon the petition, that on, &c., the plaintiff had the venue changed to Ogle county, and the transcript, &e., were filed in the Circuit Court for the county of Ogle; and taliter processum est upon the petition and suit thereon, that on, &e., it was ordered by the court that the said cause be dismissed, and that the plaintiff recover his costs ut patet per recordum, and the said suit was and is wholly discharged and determined. Per quod the plaintiff while imprisoned, not only suffered great pain of body and mind, and was greatly injured' in his reputation, credit, and circumstances, and was prevented from transacting his lawful affairs and business, but was forced to and did expend, to wit, $100, and was put to great trouble and labor in obtaining his discharge from the arrest and imprisonment, and in and about other the premises, and is otherwise greatly injured and damnified.
    To this first count, there was a general demurrer; and it was sustained by the court, and judgment was given thereon for the defendants.
    E. Burnap, for himself.
    J. Marsh & Wight, for themselves.
   Caton, J.

This was an action on the case brought by the plaintiff against the defendants for maliciously suing out a writ of ne exeat against the plaintiff, and causing him to be arrested and imprisoned thereon. To the first count of the declaration, the defendants demurred. To the other counts they pleaded the statute of limitations, that the cause of action had accrued more than two years prior to the commencement of the action. To this plea the plaintiff demurred. The court sustained the demurrer to the first count of the declaration, and overruled the demurrer to the plea, and the plaintiff declining to amend his first count or reply to the plea of the statute of limitations, judgment was rendered against him. These decisions are assigned for error.

We are of opinion that the demurrer was improperly sustained to the first count. That count Was, that the defendants “ without having any reasonable or probable cause for so doing, but contriving and intending to imprison, harass, oppress, and injure the said plaintiff falsely and maliciously, as the attorneys and solicitors of Jacob Alberts and others “ of Baltimore, in the State of Maryland, sued and prosecuted out of the Circuit Court,” &c., a writ of ne exeat against the plaintiff; and 11 contriving and intending as aforesaid, falsely and maliciously caused the said plaintiff to be arrested under and by virtue of the said writ,” &c. It is not denied that in order to render the attorneys liable for suing out a writ and causing the plaintiff to be arrested thereon, something more must be shown than would be required were the action brought against the party in whose behalf the writ was sued out. The rule by which attorneys may be held liable for malicious prosecutions is clearly laid down by Tindal, C. J., in Stockley v. Harnidge, 34 Eng. C. L. R. 276. It was there held, that if the attorneys who commenced the suit alleged to be malicious, knew that there was no cause of action, and knowing this, dishonestly and with some sinister view, for some purpose of their own, or for some other ill purpose which the law calls malicious, caused the plaintiff to be arrested and imprisoned,” they were liable. To protect attorneys beyond this, would be authorizing those who are the most capable of mischief to commit the grossest wrong and oppression. It is true that when the attorney acts in good faith in prosecuting a claim which his client believes to be just, and is actuated only by motives of fidelity to his trust, he ought not to be held liable, although he may have entertained á different opinion as to the justice or legality of the claims. When the client will assume to dictate a prosecution upon his own responsibility, the attorney may well be justified in representing him so long as he believes his client to be asserting what he supposes are his rights, and is not making use of him to satisfy his malice. But when an attorney submits to be made the instrument of prosecuting and imprisoning a party against whom he knows his client has no just claim, or cause of arrest, and that the plaintiff is actuated by illegal or malicious motives, he is morally and legally just as much liable as if he were prompted by his own malice against the injured party. If he will knowingly sell himself to work out the malicious purposes of another, he is a partaker of that malice as much as if it originated in his own bosom. The attorney, then, cannot always justify himself under the instructions of his client, no matter how positive they may be. Nor is it always necessary to show a conspiracy between the attorney and client, although some courts have treated that as necessary. An attorney may so act under his general employment to enforce a legal claim, as to render himself alone liable for a malicious prosecution or arrest. In this State, it is only under particular circumstances that a debtor is liable to be arrested; and if an attorney in the course of the prosecution of a just claim, and without the instruction or knowledge of his client, and without any reasonable or probable cause for so doing, maliciously causes the debtor to be arrested, it would be monstrous to hold that he might shield himself from liability, because his client had not conspired with him to commit the wrong. Where the attorney chooses to act upon his own responsibility under his general retainer, and without specific instructions, and causes the debtor to be arrested, the act becomes his own rather than his client’s, and he must see to it that he does not proceed without reasonable or probable cause, and especially where he is prompted by his malice. It will not do to turn the injured party round to seek his remedy against the client, who may be a thousand miles off and in a foreign country or distant jurisdiction, and who may not have directed the arrest, and may be entirely innocent of any wrong. -

By applying these principles of responsibility, we are of opinion that enough is charged is this first count to render the attorneys liable. The charge is, that as the attorneys of Alberts and others, they falsely and maliciously, without having any reasonable or probable cause for so doing, sued out the writ, and that they, falsely and maliciously, caused the plaintiff to be arrested under the writ. If they are charged as acting as attorneys, they are charged as acting without reasonable or probable cause for them so to act, in that capacity, and the malice is charged to have been, their own. The question on the trial will be, had they reasonable or probable cause, as attorneys, to sue out the writ 1 It may be true, that evidence which would be sufficient to show a want of probable cause for the client, would not establish the same thing as to the attorneys; but the question before us is one of pleading, and not of evidence. It cannot, and ought not, to be said, that if it be established by proof, that the defendants sued out the writ without cause, which would justify them in so doing, and from motives of malice, and for the purpose of vexing and harassing the plaintiff, and caused him to be arrested thereon, the defendants are not liable for the injury thus wantonly inflicted. It would be a just reproach to the law, to hold, that attorneys could thus act with impunity. The pleading is sufficient, and the demurrer to the first count was improperly sustained.

Our statute of limitations provides as follows: “And every action for malicious-prosecution shall be commenced within two years next after the cause of action shall have accrued, and not after.” And the question is, whether this cause of action is embraced within this provision. The term prosecution may have a more limited, or a more extended signification, according to the intention of the lawmaker, or person using it. It was so held by this court, in the case of Donnelly v. The People, 11 Ill. 552, and we there held, that the word, as used in our Constitution, is to be understood in its most restricted and technical sense, and means the mode of the formal accusation of offenders. That it means criminal prosecutions.

The plaintiff contends, that it is to be understood in the same restricted sense in the statute under consideration, while the defendants insist, that it was the intention of the legislature to express, by the words “ malicious prosecution,” not only malicious prosecutions where the charge was of a criminal character, but also where the plaintiff has been maliciously arrested under civil process. While we find no casé where there has been held to be any practical difference between a malicious prosecution for a criminal charge, and a malicious arrest in a civil suit, it is most undoubtedly true, that the term malicious prosecution, has been more generafly applied by courts to the former class of cases, while, at the same time, it is equally true, that the same term has been often used by learned courts and elementary writers, as applying to prosecutions of civil suits, in which the party has been maliciously arrested; and it is undoubtedly true that the same rules apply in redressing the wrong, whether the injury complained of was a malicious arrest, either on a civil or a criminal charge. In no case has any thing more than a nominal distinction been recognized, and this nominal distinction is by no means universal, even among the most technical authorities. After the most careful research, we are still left where we commenced, with the conclusion that the word prosecution, in its most restricted sense, applies only to criminal proceedings, while it may be properly used in a more extended sense so as to embrace civil proceedings; and we are left to determine from other considerations than any arbitrary meaning of the word, in what sense it was here used by the legislature. "We are clearly of opinion, that it was not the intention of the legislature here, to use the word in its most restricted sense, and to apply it alone to prosecutions of a criminal nature, but that it was intended also to embrace cases where the plaintiff has been maliciously prosecuted and imprisoned without cause, in a civil proceeding. It must be remembered, that under our Constitution, no person can be legally imprisoned for debt alone; and it is only in cases where the debtor is fraudulently or wrongfully endeavoring to evade the payment of his debt, that he can be restrained of his liberty. The imprisonment, then, is not for the debt, strictly speaking, not for his wrongful act, in endeavoring to evade its payment. In England, and formerly in most of the States of this Union, a complete justification was always made out by showing the existence of a debt. That, of itself, was a sufficient cause for the arrest. Not so here. Even in a civil suit, it is the wrong, rather than the debt, which subjects a party to arrest. While the cause which will justify the arrest, may not be a crime, to some extent it partakes of that nature. It involves a moral delinquency, and not a mere civil liability. A malicious arrest, therefore, in this State, can never be for a debt alone, and these circumstances serve to characterize the transaction, and assimilate it much nearer to a malicious prosecution for a criminal offence, than were malicious arrests in England, where the party could be imprisoned for the debt alone.

This case is as much within the mischief designed to be remedied by the statute, as if the prosecution had been for a crime, and being also within the expressions of the statute it is our duty to hold it to be within its meaning. The very policy of our law, which secures the person of the honest debtor inviolate, strongly leads to the conclusion, that the legislature intended to use the word in its more enlarged sense. He who fraudulently endeavors to avoid the payment of his just debt does a wrong to society, although.not so great, perhaps, as he who commits a crime, yet, much more than the man who simply contracts a debt.

We are of opinion, that the demurrer to the plea of the statute of limitations was properly overruled. For the first error, however, the judgment must be reversed, and the cause remanded. Judgment reversed.


text:
    James McCumber et al, who defend by their next friend, Guardian ad litem, Plaintiffs in Error, v. William H. Gilman, Defendant in Error.
    ERROR TO BOONE.
    The statutory remedy of foreclosure by scire facias, applies only to mortgages made to secure the payment of money. It does not extend to mortgages made to secure the delivery of specific articles of property or the performance of other acts.
    The judgment in this case was rendered by T. C. Browne, Justice, at April term, 1846, of the Boone Circuit Court. The plaintiffs in error, minor children of the mortgagor, now deceased, sue out this writ of error. The facts of the case will be found in the opinion of the Chief Justice.
    William T. Burgess, for plaintiffs in error.
    E. Peck, for defendant in error.
   Treat, C. J.

In August, 1844, McCumber made a note to Gilman, by which he promised to pay, on the 1st of June, 1845, $600, in internal improvement scrip, bearing interest from the 12th of July, 1840, (for scrip of similar description, loaned by Gilman to McCumber,) with three per cent, interest for the use thereof. At the same time, McCumber and wife conveyed certain real estate to Gilman, by way of mortgage, to secure the payment of the note. In April, 1846, Gilman sued out a scire facias against the administrator, widow, and heirs of McCumber, to foreclose the mortgage. A judgment was entered, and a special execution ordered for the sale of the mortgaged premises. A writ of error is now prosecuted to reverse the judgment.

The statute provides : “ If default be made in the payment of any sum of money, secured by mortgage on lands and tenements duly executed and recorded, and if the payment be by instalments, and the last shall have become due, it shall be lawful for the mortgagee, his executors, or administrators, to sue out a writ of scire facias from the clerk’s office of the Circuit Court of the county in which the said mortgaged premises may be situated, or any part thereof, directed to the sheriff or other proper officer of such county, requiring him to make known to the mortgagor, or if he be dead, to his heirs, executors, or administrators, to show cause, if any they have, why judgment should not be rendered for such sum of money as may be due by virtue of said mortgage.” Rev. St. ch. 57, § 23. It is very apparent, that the statutory remedy of foreclosure by scire facias, applies only to mortgages made to secure the payment of money. It does not extend to mortgages made to secure the delivery of specific articles of property, or the performance of other acts. The mortgage in question was clearly not within the provisions of the statute. The note was not for the payment of money. It was simply a promise to pay internal improvement scrip, to the nominal amount of $600. If not paid at maturity, the payee could not claim to recover the sum named in money. In an action on the note, the true measure of damages would be the cash value of that many dollars of scrip, on the day it should have been delivered, and interest according to the terms of the contract. The case of Smith v. Dunlap, 12 Ill. 184, is conclusive of the question. The mortgagee has mistaken the appropriate remedy. He must bring ejectment to recover the possession of the mortgaged premises, or resort to a bill in chancery to foreclose the mortgage. The case of Jackson v. Turner, 7 Wend. 458, is not in point. In that case, the mortgage was conditioned for the delivery of fifty barrels of salt; but it expressly authorized the mortgagee, on default, to sell the mortgaged premises, and retain out of the proceeds the sum of $500, together with the costs and charges of the sale. The court held the instrument equivalent to a mortgage for the payment of $500 in money, and sustained a statutory foreclosure. If this note or mortgage contained a provision fixing the value of the scrip in the event of a default in payment, the cases might be alike in principle. But there is nothing on the face of either instrument to indicate the real amount of the indebtedness. The amount does not rest in computation, but has to be ascertained by the testimony of witnesses.

The judgment must be reversed. Judgment reversed.


author: Trumbull, J.

text:
    Christopher Sammis, Appellant, v. Ralph Clark et al., Appellees.
    APPEAL PROM PEORIA.
    Interest in the State of Illinois can only be recovered, in actions purely ex contractu and where there is nothing tortious in the character of the indebtedness, in the cases specified by statute, or where there has been an express promise to pay interest, or such a promise can be inferred from the circumstances, the particular mode of dealing adopted by the parties, or the usage of the trade in which they dealt.
    To make the delay of payment unreasonable and vexatious, the debtor must have thrown obstacles in the way of collection, or by some circumvention, contrivance, or management, must have induced the creditor to prolong the time of proceeding to recover payment longer than he otherwise would have done.
    This cause was heard before Kellogg, Judge, and a jury, at March term, 1852, of the Peoria Circuit Court. Verdict and judgment for plaintiffs in the court below. The defendant below prayed this appeal.
    A statement of ihe case will be found in the opinion of the court.

      O. Peters, for appellant.
    H. 0. Merriman, for appellees.
   Trumbull, J.

This was an action of debt to recover the price of a bill of goods sold to the defendant, a merchant of Peoria, by the plaintiffs, who were merchants in New York city.

The declaration contained the common counts for goods sold, money lent, &e., and for interest upon and for the loan and forbearance of money, &c. Plea, general issue.

The facts, as agreed upon, are, that on the 9th of July, 1844, the plaintiffs sold to the defendant a bill of goods amounting to the sum of $283.51, upon an order originally sent by defendant to Baldwin, Dibblee & Work, then merchants in New York, and that on the 29th of May, 1845, the defendant paid the plaintiffs the sum of $160 in part payment of the account. The defendant obtained the goods by sending an order therefor to the plaintiffs in New York, and the plaintiffs in fulfilment óf the order packed up and shipped the goods and they were duly received by the defendant in Peoria, with the invoice, showing the purchase was made on six months’ credit from date of bill. Proof was introduced to show that it was the custom of the plaintiffs, and merchants in New York generally, to charge interest on goods sold, after the bills matured, and that the defendant had been a long time a merchant in Illinois, and had purchased his goods generally in New York city. One witness said he supposed defendant must have known it was the custom of New York merchants to charge their customers, country merchants, interest on their accounts for goods, after the bills matured. It was also proved that the defendant, in an account current furnished Baldwin, Dibblee & Work of dealings between them, had charged himself with interest.

The jury returned a verdict for plaintiffs for $162.23 debt, and thirty-eight dollars and eight-two cents damages, that being the amount of interest on the account, on which the court entered judgment.

The only question submitted to this court for decision is, whether, on the above state of facts, the jury were justified in rendering their verdict including interest on the account.

The question of interest, and when it is, oris not, recoverable,has been a much disputed point both in England and many of the States of this Union ; but in Illinois the whole subject is regulated by statute. Sect. 2, ch. 54, Rev. St., declares: “ Creditors shall be allowed to receive at the rate of six per cent, per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing; on any judgment recovered before any court or magistrate authorized to enter up the same within this State, from the day of signing judgment until the effects be sold, or satisfaction of such judgment be made; likewise on money lent, on money due on the settlement of accounts from the day of liquidating accounts between the parties, and ascertaining the balance; on money .received to the use of another, and retained without the owner’s knowledge, and on money withheld by an unreasonable and vexatious delay of payment.”

It is a rule, in the construction of statutes, that the expression of one thing is the exclusion of another, and it may well be insisted, when the legislature has enumerated a variety of cases in which creditors shall be allowed to receive interest, that it was not their intention to permit them to demand it in the cases not enumerated. Dwarris on Statutes, 713; The King v. Cunningham, 5 East, 478; The Warden of St. Paul v. The Dean, 4 Price, 78.

Interest is not given by the common law for a failure to pay money when it is due, unless the parties have so agreed. Hawkins, book 1, ch. 29 § 6; Renn’s Glass Factory v. Reid, 5 Cow. 608; Madison County v. Bartlett, 1 Scam. 70.

It follows, from these positions, that interest can only be recovered in this State in actions purely ex contractu, and where there is nothing tortious in the character of the indebtedness, in the cases specified in the statute, or where there has been an express promise to. pay interest, or such a promise can be inferred from the circumstances, the particular mode of dealing adopted by the parties, or the usage of the trade in Which they dealt.

In this case the claim of the plaintiff’s is on an open account, and it is manifest they are not entitled to interest under the statute, unless it be under that clause which allows interest on money withheld by an unreasonable and vexatious delay of payment.

No fixed rule can be laid down by which to determine in every case what shall constitute such an unreasonable and vexatious delay of payment as will entitle the creditor to interest. This is a question which must necessarily be determined, to a great extent, upon the circumstances of each particular case as it arises; but it is clear that there must be something more than mere delay to authorize a recovery of interest under this clause of the statute. The delay of payment must have been both unreasonable and vexatious. That is, the debtor must in some way have thrown obstacles in the way of the collection of the demand, or by some circumvention, contrivance, or management of his own, have induced the creditor to prolong the time of.,proceeding against him longer than he would otherwise have done.

In this case no circumstances appear tending to show that there was any thing vexatious in the delay of payment; and the simple forbearance of the plaintiffs to proceed in the collection of their debt from 1845 to 1848, does not show any thing vexatious on the part of the defendant or such a case as will of itself entitle the plaintiffs to interest.

There is no pretence of an express agreement by the defendant to pay interest, and such an agreement cannot be inferred from the evidence of the custom of the plaintiffs and of New York merchants generally to charge interest, unless the existence of such a custom was brought home to the knowledge of the defendant.

The fact that the defendant, in one instance, made out an account current with another house in New York, in which he charged himself with interest, is not sufficient to warrant the inference of an agreement to pay interest to these plaintiffs. It may be that there was an express agreement to pay interest to the parties to whom the account was rendered.

In our judgment the .plaintiffs were not entitled to interest, under the circumstances of this case, as shown by the record, and the judgment allowing it is therefore erroneous. It would seem that there was also another error in the judgment. The bill of goods purchased amounted to $283.51, on which the defendant paid $160, which would leave a balance of only $123.51, while the verdict of the jury and judgment of the court were for $162.23 debt, besides the damages.

Judgment reversed and cause remanded.

Judgment reversed.