Hanstein v. Johnson

Bukweli,, J.:

In Bain v. Clinton Loan Association, at this Term, we have decided that the association of that name, and of which the defendants were members, was a partnership, and that, since in this State all contracts are several, each member was liable to each creditor for the whole amount of his claim.

In addition to what is said in the opinion filed in that case upon this subject, it may be remarked that individuals associated together in a business and claiming to be a corporation and exempt from individual liability for the contracts of the association, in order to shield themselves from such liability, must be able to show that this legal entity exists by virtue of some special or general act of a legislative body capable of chartering — giving life to — a corporation. The defendants slipw no such charter. No special act had conferred on their association corporate existence, and they had not complied or attempted to comply with the terms of the general law [The Code, ch. 16) so as to acquire such existence through its provisions. Indeed, the business in which they were engaged (a general banking business) was such as to preclude them from availing themselves of the facilities of that law for creating and organizing a corporation. Banking and insurance companies cannot become corporations in this State except by special act of the General Assembly, being excepted from the provisions of the general law. The Code, §677.

*258It was contended by defendants’ counsel tliat inasmuch as their association was a joint stock company it was an incorporated joint stock company, or a corporation by virtue of sections .1 and 3 of Article VIII of the Constitution of the State. Those sections of the organic, law are not intended to create corporate existences, but are directions to the Legislature not to grant special charters to corporations (which word by force of section 3 includes joint stock companies) except in cases where, in the judgment of the Legislature, the object of the corporation cannot be attained under general laws. Chapter 16 of The Code, and the acts amendatory thereof, have been adopted in compliance with the mandates of this article. The General Assembly has not seen fit to provide for the organization and incorporation of “joint stock companies” as has been done in England and also in New York, the Constitution of which State is in this respect the same as ours.

When we have determined that the claim of the plaintiff is against a copartnership, of which the defendants were members, we have virtually overruled all their exceptions to the judgment from which they have appealed. Thejr are jointly bound to him, and, because of this joint liability, the plaintiff and each partner has a right to demand that the joint property shall be applied to the satisfaction of the joint liabilities. But they are severally bound to him also, under the statutes of this State, in which all contracts are joint and several, and the plaintiff'may sue any one or more of the partners as he wills. The Code, §§187, 222. Nor does the fact that the partnership is insolvent, that is, that the joint property is not sufficient to pay the joint or partnership debts, or the fact that a receiver has charge of the partnership assets, no matter at whose instance, deprive the creditor of that right. Nor can he be stayed in his efforts to secure the money that is due him *259because of the fact that there are a groat many creditors in like condition with himself, and that there will, therefore, he a multiplicity of suits. The law favors, not hinders, the diligent. A Court will sometimes interpose to prevent a multiplicity of suits, hut the facts set but in this case do not at all warrant any such interposition.

No Error.