I concur in the result reached by Judge WERNER'S opinion. I also agree in the main with the grounds stated therein. I am, however, unable to agree with the suggestion that it is unnecessary to treat the exemption clause as nugatory, as a matter of public policy. I am of opinion that the personal liability from which the company has sought to absolve its shareholders, officers, managers and trustees is primary in its character and beyond the power of the company to interfere with it in any way; to hold otherwise would be subversive of the law of joint stock associations and permit them to exercise corporate powers and privileges without legislative sanction or restraint. Declaring legal this attempt to release shareholders and officers from personal liability would result in untold complications and financial disaster. One result would be to deprive creditors of their main security in many instances.
The visible assets of an express company, as compared with its bonded and other indebtedness, are in many instances insignificant and of little value. Its business is to deliver packages, parcels and other light personal property to all parts of the country. Transportation is mainly secured under contracts with the railroad companies. In cities and villages its principal property consists of office fixtures, horses, wagons, harness, etc., realizing little at forced sale. In other words, the express company does not require an expensive plant as do manufacturing and other kinds of business. These are persuasive reasons why, as matter of public policy, the personal liability of members of joint stock associations should remain unimpaired so long as business is conducted in that manner.
At the present time, in this state, there are four methods by which a man may carry on business: He may proceed as an individual; associate himself as a partner in a firm; become a member of a joint stock association; assume the responsibilities and enjoy the privileges of a stockholder in a corporation. The members of joint stock associations enjoy certain benefits and rest under well-defined burdens. The *Page 192 case at bar presents an excellent illustration: Certain individuals, banded together in a great business enterprise, have listed bonds to the extent of $12,000,000 on the New York Stock Exchange. In other words, they have exercised powers usually vested in corporations. The law permits this for the reason that they are copartners resting under personal liability, joint and several, for all the debts and obligations of the company, and hold themselves out to the world as such.
I am of opinion that public policy requires that all partnerships taking the form of joint stock associations should rest under the common-law liability of partners so long as they choose to avail themselves of the great privileges and protection inherent to such a mode of transacting business. The joint stock association is not of statutory origin, as is the corporation, but the creature of the common law; by recent legislation it is required to annually file its written certificate, signed and verified by the president and treasurer, containing certain facts. (2 R.S. [Banks' 9th ed.] p. 1471.) The Code of Civil Procedure (§§ 1919 to 1924) has regulated actions by and against unincorporated associations to some extent. It is unnecessary to point out in detail the very great difference between the joint stock association and a corporation. The association has not appealed to the sovereignty of the state for its right to exist, and is, therefore, free from the visitorial powers to which corporations are subjected; nor is it amenable to those various commands of the statute which if disobeyed lead to the imposition of certain liabilities and penalties. The association need not disclose the amount of its capital, or the number of its shares; the corporation is obliged to do so. It is the obvious policy of the state to maintain this distinction, to wit: If men desire to embark in great business ventures, practically exempt from governmental control, they must do so subject to the joint and several liability to pay the debts thereby incurred. If they wish to be freed from that liability they can secure the same result by forming a corporation and submitting to governmental visitation and control and to various statutory restraints by virtue of which the rights of creditors *Page 193 are protected. Public policy clearly requires that such vast transactions shall be carried on either under corporate restraint or the rigorous common-law rule of joint and several liability for debts. The distinguishing feature of the joint stock association is the personal liability of its members. (VanAernam v. Bleistein, 102 N.Y. 360; People ex rel. Winchester v. Coleman, 133 N.Y. 279; Matter of Jones, 172 N.Y. 575, and cases cited in above authorities.)
I am in favor of declaring that a sound public policy dictates that this feature of personal liability is co-existent with the life of the association and cannot be abrogated by the contract of the parties in interest.
It follows that the clause in the bonds of the Adams Express Company seeking to release the members thereof from personal liability is void and the bonds and coupons are negotiable instruments.
The order appealed from should be affirmed, and judgment absolute in favor of the defendants and against plaintiff on his stipulation should be entered, with costs.