First National Bank of Green Bay v. Goff , 31 Wis. 77 ( 1872 )

Cole, J.

This case was argued on both sides on the assumption that the complaint showed that the “ Appleton Manufacturing Company” was organized as a corporation under the laws of this state. But this is a mistake. The allegation is, that the defendant was a member of a “ joint stock company or association, consisting of seven or more shareholders or associates, doing business in Appleton, "Wisconsin, and known as the Appleton Manufacturing Company, and was a shareholder therein.” This is merely averring that the defendant was a member of a joint stock company which is unincorporated, and which is really nothing more than a common partnership. Each member of such an association is liable, like every individual of a common partnership, for the debts of the company, with the limitations named in chap. 862, Laws of 1864. A judgment must be first obtained against the company, and an execution thereon be returned unsatisfied in whole or in part, before an action can be maintained against an individual shareholder. Sec. 2. The main object of the law of 1864 is to facilitate the bringing of suits by and against unincorporated joint stock companies, and it relieves the parties from the necessity of making all the shareholders parties plaintiff or defendant, as in case of ordinary partnership. When the association consists of seven or more associates or members, it may sue and be sued in the name of its president for the time being ; and this privilege or fight is exceedingly convenient where the company consists of a large number of persons. And sec. 8 provides that the suit shall not abate by reason of the death, removal or resignation of the president of the joint stock company, or the death or legal incapacity of any shareholder, during its pendency. With few exceptions, however, these unincorporated joint stock companies are nothing more than partnerships on a large scale, and the members incur the liabilities of persons in a common partnership. But this is not so in respect to joint stock companies which are organized under chap. 78, R. S. They are invested with the powers and immunities of a corporate body, and, beyond their capital stock, the stockholders are not personally liable for the debts of the corporation, except for the wages of the workmen of such corporation earned within six months' preceding the demand made for any such debt. Sec. 27.

It was claimed by the counsel for the respondent, that a joint stock company, consisting of more than seven associates, could not be organized and established under chap. 73. This position is founded upon the assumption that the statute of 1864, modifies the provisions of chap. 78, and restricts the organization of any company under this chapter to associations composed of from three to six persons. But this position we deem clearly untenable. Any number of persons, not less than three, may organize under this chapter for the purpose of engaging in and carrying on any kind of manufacturing, mechanical, or any other lawful business; and, when organized as therein provided, they are invested with the full powers, privileges, and immunities of a corporation. But the law of 1864 applies only to unincorporated companies, where the stockholders are personally liable for the debts of the association, as in case of a common partnership. And as the complaint in this case does not show that the “ Appleton Manufacturing Company ” is anything more than an unincorporated association, without any corporate franchise or immunity, we think it states a cause of action.

The other ground of demurrer to the complaint is, that there is a defect of parties defendant. This objection would be well taken, were it not for the provision in the second section of the act of 1864, which authorizes a suit against any or all of the shareholders individually, after a judgment has been recovered against the company and an execution thereon has been returned unsatisfied. This obviates the objection.

We think the order overruling the demurrer must be affirmed.

By the Court— Order affirmed.