Woodhouse v. Commonwealth Insurance , 54 Pa. 307 ( 1867 )

The opinion of the court was delivered, by

Strong, J.

This was an attachment execution levied upon a debt alleged'to be due to the Commonwealth Insurance Company, by E. J. Lauman, who was summoned as garnishee. Lauman pleaded u nulla bona,” and the sole question under the issue was, whether he was in debt to the defendants in the execution. He was a stockholder of the Commonwealth Insurance Company, the par value of the shares in which was at first $50. The company held his note for unpaid instalments on his stock. On the 13th of March 1861, an Act of Assembly was passed, by which the par value of the capital stock of the company was reduced to $25 a share. This sum Lauman had paid on each share'which he held. It is very certain that the company had no claim upon him when the attachment execution was laid. How, then, can an attaching-creditor of the company, who claims through it and stands in its place, recover from him ?

It is argued that this is possible, because the original act incorporating it provided that, should the company at any time fail to meet its engagements, each person holding stock at the time of such failure shall be individually liable for the debts of the company to the amount of the balance unpaid on the stock of such stockholders. In this liability of Lauman to pay what remained unpaid of the original value of the stock, the plaintiff urges he had a vested right, which it was not in the power of the legislature to take away or diminish by reducing the par value of the stock. Suppose this is so. Can he recover more than $25 a share through the company ? Using their rights, as he does, is he in any better situation than they would be if they had sued Lauman ? Manifestly not. But it is a mistake to assume that he had any vested right in a stockholder’s payment of $50 per share on his stock. He sued the New Grenada company in foreign attachment, and recovered a judgment on the 4th of May 1857. On this judgment a scire facias was issued against the defendants in this attachment execution, as garnishees. Judgment was obtained against them in 1862, after the Act of Assembly, reducing the stock, was passed. Then there was no debt due to the plaintiff in error from the Commonwealth Insurance Company. It certainly is a novelty to assert that a man has a vested interest in a debt due by a debtor to a debtor of the claimant of such interest, without any contract to that effect. But if this were conceded, the plaintiff’s right, under the statute referred to, would be directly against Lauman, and not indirectly through the Commonwealth Insurance Company. The judgment of the District Court was therefore right. The Act of 1861 was a complete defence against the claim of the plaintiff in this case.

Judgment afiirmed.