Horner v. Coffey. MARY D. HORNER, Adm'x, &c. vs. HUGH M. COFFEY. There is no provision in the act incorporating the town of Grand Gulf to authorize a resort to the individual property of the inhabitants of the town for the purpose of discharging a judgment against the corporation. At common law, corporations, such as banks or insurance companies, do not attach any individual responsibility to their members for the corporate debts; but a different rule prevails (according to some authorities) with regard to the inhabitants of any district, as counties or towns incorporated by statute, which come under the head of quasi corporations. Against them no private action will lie, unless given by statute; and then each inhabitant is liable to satisfy the judgment. The law will not make or presume a man to be a defendant to a suit against another, unless it be shown that he was a party to the cause of action. Held, that the inhabitants of Grand Gulf were not parties to the cause of action upon which the suit was brought. The act incorporating the town requires the inhabitants to perform such obligations as the corporate authorities may legally impose upon them, and that was a tax provided for in the charter. A failure to impose this tax, or a failure to pay it by the inhabitants of the town, does not make them liable for a judgment against the corporation. A judgment is only the means provided by law to enable a creditor to get that to which he was entitled before judgment. Held, that a creditor of a corporation cannot maintain a suit against any one or all the inhabitants of the town, because they were liable to pay a tax, and had failed to pay it. The act of incorporation gives no authority to make the citizens of the town parties to the cause of action, or to make their property liable for the judg ment. ON appeal from the southern district chancery court at Natchez; Hon. James M. Smiley, vice-chancellor. The bill of complaint filed by the appellee in the court below avers, that the appellant's intestate, Alexander H. Horner, on the 6th of April, 1849, recovered judgment against "the president and selectmen of the town of Grand Gulf" for $750, which was revived after the death of said Alexander, in the name of appellant, as his administratrix. That appellant has sued out execution upon said judgment; and, proceeding upon the false assumption that the property Horner v. Coffey. of the individual corporators, residing in said town of Grand Gulf, is liable to be sold for the payment of said judgment, has caused said execution to be levied on a lot of ground in said. town, the property of appellee. That said lot is not the property of said corporation, but is proceeded against as the private property of appellee. That there is no provision in the charter of incorporation of the town of Grand Gulf that the private property of the members of the corporation shall be liable for the payment of its debts; and insists, that the attempt to subject the property of appellee to the payment of said judgment, is wholly unauthorized by law, and prays an injunction, &c. The answer admits the judgment and levy upon the private property of appellee, a prior execution on said judgment having been returned "nulla bona." States that said president and selectmen are a municipal corporation, and possess no corporate property or funds out of which said debt can be collected by execution, though by their charter they have full power to assess and collect taxes upon the persons and property, within the limits of said town, to pay the debts and defray the expenses of the said corporation. That appellant several times applied to said president and selectmen to pay said judgment, or make provision therefor by taxation or otherwise; but they refused to pay or make any provision for said debt, and refused to authorize or direct the assessment and collection of any taxes for that or any other purpose. H. T. Ellett, for appellant. The only question in this cause is, whether the private property of the members of a municipal corporation is liable to execution on judgments against the corporation? In regard to private corporations, which have a capital stock and a fund which may be subjected to the payment of their debts, the rule is settled in the negative. But as to municipal corporations, established for political and civil purposes, without any corporate fund, a clear distinction is drawn in the books, and for a very satisfactory reason. Horner v. Coffey. Angell and Ames state the rule and the reason of it very clearly. They say: "A private corporation is distinguishable from a municipal corporate body by having a corporate fund from which a judgment can be satisfied, and by the irresponsi bility of the members for the corporate debts beyond the amount of their interest in the fund; for towns, &c., being established only for political and civil purposes, each member of the same is liable, in his person and private estate, to the execution." Ang. & Ames on Corp. 1st edit. 23, 374; 3d edit. 32, 566. The position is fully sustained by the following authorities: 3 Conn. R. 52; 6 Ib. 223; Beardsley v. Smith, 16 Ib. 368; Merchants Bank v. Cook, 4 Pick. 414; 10 Ib. 127; 13 Ib. 491; Chase v. The Merrimack Bank, 19 Ib. 564; Commonwealth v. Blue Hill Turnpike, 5 Mass. 422; 7 Ib. 187; 14 Ib. 216; 17 Ib. 333, which shows, (p. 335,) that the rule as to municipal corporations has been extended by the Mass. statute of 1808 to manufacturing corporations. Adams v. The Wiscasset Bank, 1 Greenl. 364. Kent, in the 2d vol. of his Com. 3d edit., p. 274, lays down the same rule, and cites the cases from 4 Pick. 414; 1 Greenl. 361; 7 Mass. 187; and also Russell v. Men of Devon, 2 Term R. 667; and Attorney-General v. Corporation of Exeter, 2 Russ. 53, per Lord Eldon. In Harvey v. The East India Company, 2 Vern. 396, it is said at the foot of the report: "Note. In the case between Dr. Salmon and the Hamborough Company, the members in their private persons were made liable, the company having no goods." The cases of Beardsley v. Smith, 16 Conn., and Chase v. Merrimack Bank, are comparatively recent decisions, and are very full and clear in the assertion and vindication of the rule. The principle is no novelty. It is found in approved text books, and in decisions of high authority; and if not more frequently to be met with, it is perhaps owing to the fact, that corporate bodies are not often to be found willing to evade the payment of their just debts, by a refusal to exercise their proper powers in making provision for their payment. Horner v. Coffey. William S. Wilson, for appellee. The corporation of Grand Gulf, being a proper corporation aggregate with full powers as such, can the property of an individual corporator be taken for its debts? Let the nature and properties of a corporation be regarded, and it will be at once seen that the appellant must fail in her attempt. What is a corporation? Chancellor Kent (2 Com. 267) defines what it is: "A corporation is a franchise, possessed by one or more individuals, who subsist as a body politic under a special denomination, and are vested by the policy of the law with the capacity of perpetual succession, and of acting in several respects, however numerous the association, as a single individual." "All the individuals composing a corporation, and their successors, are considered in law but as one moral person, capable, under an artificial form, of taking and conveying property, contracting debts," &c. Again, at next page: "It was chiefly for the purpose of clothing bodies of men in succession, with the qualities and capacities of one single artificial and fictitious being, that corporations were originally invented," &c. 1 Black. Com. 467, after speaking of the difficulties of keeping property in the hands of a succession of natural persons, says: "But when they are consolidated and united into a corporation, they and their successors are then considered as one person in law," &c. Again, at page 475, enumerating their powers and capacities, he says the second of their incidents is, "to sue and be sued, implead, &c., and do all other acts as natural persons may." See also definitions, first page Angell & Ames, Corporations; and at second page, that of Chief Justice Marshall, ascribing to corporations "individuality, by which (with other properties) a perpetual succession of many persons are considered as the same, and may act as a single individual." Again, a per petual succession of individuals are capable of acting, &c., like one immortal being." A corporation, then, is a being, a person formed by the con Horner v. Coffey. solidation and union into one, as Blackstone expresses it, of the various persons who compose it. Its existence is the aggregate of their several existences. In legal contemplation, it is just as distinct from the individual members, as the tertium quid in chemistry is different from either of the substances that combine for its formation. "The debts of a corporation, either to or from it, are totally extinguished by its dissolution; so that the members thereof cannot recover or be charged with them in their natural capacities, agreeable to that maxim of the civil law. What is due to the corporation is not due to the members, nor do the members owe what the corporation owes."" 1 Black. Com. 484. In accordance with this, in President and Selectmen of Port Gibson v. Moore, 13 S. &. M. 157, this court decided, that a debt due by the corporation of Port Gibson was extinguished by its dissolution, which could not well be if the inhabitants of the town severally were liable for the debt. 2 Term R. 672, Lord Kenyon, says: "Where an action is brought against a corporation for damages, those damages are not to be recovered against the corporators in their individual capacity, but out of their corporate estate." In this case, Lord Kenyon draws the distinction very precisely between proper corporations with full powers as such, and quasi corporations; which latter, having no corporate estate, and no capacity to acquire any, are not liable to suit, unless an action be expressly given by statute. When such action is given, the individuals must make good a judgment out of their private estates. Not so, however, according to Lord Kenyon, in the case of proper corporations aggregate. A failure to advert to this distinction, and some loose expressions in the text books, have, it is believed, led to the mistaken opinion, that in all cases the private property of the members of municipal corporations is liable for the payment of the corporation's debts. This might be inferred from what is said by Ang. & Ames, Corp. 32. Beardsley v. Smith, 16 Conn. 368, is relied on by appellant. |