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bered, and no specific shares had been appropriated ;” but the real ground of the decision was, that the defendant's name was not on any register of shareholders, such as the company was required by the act to keep ; this appears by the judgment of the Exchequer Chamber in The Irish Peat Co. v. Phillips, where it is said that The Wolverhampton Waterworks Co. v. Hawksford was no authority for the decision of the Court of Queen's Bench; which was, that shares were not created so as to make the alleged owner liable for calls thereon until the shares were specifically numbered and appropriated by number. In the case of The Irish Peat Co. v. Phillips, the charter of the company required that all proprietors of stock should execute a deed of settlement, whereby the capital shoull be divided into a certain number of shares, to be numbered in regular succession, beginning with No. 1. A deed of settlement was prepared containing these provisions (substantially the same as “ The Companies' Clauses Consolidation Act)," but the defendant did not execute it; and on that ground it was held that he was not a shareholder, nor liable for calls. Neither of these cases, *then, seems to me to support the position taken, that the defendant in this case is not liable because no shares were numbered by the company, and, as such, allotted to him; and I am unable to come to the conclusion, that a numbering of the shares was essential to constitute him a stockholder. But in addition to this, the act of incorporation says, that if “any subscriber, or stockholder,” shall neglect to pay any assessment on his shares, the directors may order such shares to be sold, and if there is any deficiency, “such delinquent subscriber or stockholder shall be held accountable," &c. The Act 32 Vict., c. 55, uses the terms, “ subscribers for shares," and “subscribers to the capital stock ;” and the third section authorizes the company to sue for, recover and receive “ from any subscriber the amount due for unpaid subscribed stock which may have been subscribed for by such subscriber.” Surely it cannot be disputed that the defendant was a subscriber for stock in this company, even if any doubt could exist about his being a stockholder. In the report of the case of The Wolverhampton Waterworks Co. v. Hawksford, in 6 C. B. N. S. 336, on demurrer to the declaration, the judgment for the defendant was put expressly on the ground that the statute gave the remedy for calls against "shareholders" only, and not against “subscribers” simply : anil the declaration did not allege that the defendant was a “stockholder." But by the act under consideration the power to sue is not confined to stockholders, but is expressly given against subscribers; and therefore whether the words " subscriber” and “stockholder” were used indiscriminately in the act, and as pointing to the same set of persons, as was said in The West London Railway Co. v. Bernard, 13 Law J. Q. B. 68, or otherwise, seems to me to be immaterial. As regards their liability to pay calls, I think there is no distinction between a subscriber for stock and a stockholder. For these reasons I think this objection ought not to prevail.
The next objection was, that the stock was subscribed subject to the provisions of the act of incorporation and the by-laws of the company; that they formed conditions precedent to the defendant's liability, and that the company had not performed the conditions. These alleged conditions aro to be found in the second section of the act of incorporation, which declares that the capital stock of the company shall consist of $2,000,000, to be divided into forty thousand shares of $50 cach ; and in the fifth section, which authorizes the president, directors and company “ to make such equal assessments from time to time on all the shares in the said corporation as they may deem necessary and expedient.” The objection is, that the first assessment made on the 16th July 1867, was not an equal assessment on all the shares, because it expressly excluded the $250,000 of stock subscribed in the United States. If this objection is not cured by the Act 32 Vict., c. 51, I think it must prevail. * * * [The judge's description of the act is omitted as not of general interest.]
On this ground, therefore, I think the first assessment was illegal. But admitting the first assessment to be bad, on account of the exclusion of the subscribers for stock in the United States, will the inclusion of that assessment in the notice which was given by the president of the company, under the Act 32 Vict., c. 54, and the sale of the defendant's stock for the non-payment of that, together with the nine subsequent assessments, vitiate the sale? It seems to me that it will not do so. The objection of inequality does not apply to any but the first assessment; and there is no such connection between them as that one defective assessment should destroy all the others. Each one stands on its own merits, and, if legally made, gives a separate cause of action, though a preceding one may be defective. For the payment of such as were . legally made and notified, a shareholder would be liable for the others he would not. The defendant clearly was a defaulter for non-payment of nine assessments, and for such default the company had a right to sell his shares, and I cannot think that where they had such right, and where there clearly was a balance (without including the first assessment), for which the defendant was liable in an action, that the plaintiffs claiming against him in that action a larger sum than they had a right to, is a ground for setting aside the verdict; it only affects the amount to be recovered. The plaintiff, in an action of this nature, may prove and recover less than the sum stated to be due in his declaration : 1 Chit. Pl. 114; and “if the plaintiff states as a cause of action more than is necessary for the gist of the action, the jury may find so much proved, and so much not proved, and the court would be bound to pronounce judgment for the plaintiff upon that verdict, provided the facts proved constituted a good cause of action :” per HOLROYD, J., in Bromfield v. Jones, 4 B. & C. 385. Now, in my opinion, the facts proved in this case constituted a good cause of action, as to all except what was claimed on account of the first call, and the jury had a right to find all except that proved. Instead, therefore, of the defendant being liable for the assessments on the full amount of his subscribed stock, he is only liable for the deficiency remaining on the nine assessments, after deducting the amount realized from the sale of his shares, with interest and expenses.
My brother WELDON has stated that, in his opinion, the notice given by the president, under the Act 32 Vict., c. 55, is insufficient. No objection to the form of the notice was taken at the trial, or on the argument; and though probably it might have been more artificially drawn, I am inclined to think it contains substantially all that the act requires.
For these reasons, I think the rule should be discharged, and that the verdict should be reduced by the amount of the first assessment, unless the agreement entered into at the trial precludes such a mode of dealing with the case.
RITCHIE, C. J., concurred. WELDON, J., dissented.
Supreme Court Commission of Ohio. GEORGE H. WEST ET AL. v. CITIZENS INSURANCE COMPANY.
Policies of insurance, like other contracts, are to receive a reasonable construction, so as not to defeat the intention of the parties.
A policy of insurance, issued to a mercantile partnership on a stock of gooils owned by the firm, and with which they are carrying on business, which contains no provisions limiting or restricting alienation of the property, is not avoided by a sale by one partner to his copartners, who continue the partnership business, of his interest in the stock of goods.
When the policy contains a provision that the assignment of the same, or any interest therein, without the assent of the company endorsed thereon, avoids it, such a sale, and the assignment by the retiring partner to his copartners, who continue the business, of his interest in the policy, does not avoid it.
In case of loss after such sale and transfer, the remaining partners, being the real parties in interest, should sue on the policy, and in such action they are not limited in the amount of recovery to their interest in the partnership goods before such sale and transfer, but can recover for the whole loss.
ERROR reserved in the District Court of Hamilton county.
Hoadly, Johnson & Colston, for plaintiffs in error.— The only question in this case is, whether a prohibition, contained in a policy of insurance, issued to partners, against the assignment of “any interest therein," refers to transfers inter sese.
Three theories might be, and have been, espoused, viz. : First, that of our learned antagonists, that if one partner retire from a firm all its policies of insurance containing the quoted clause, or a similar provision forbidding alienation of the insured premises, are at once forfeited, and unless by consent of the underwriter, cease and determine ; secondly, that such alienation has the effect of forfeiture only to the extent of the retiring partner's undivided interest ; and, thirdly, what we respectfully submit to be the better opinion, viz., that the purpose of such provision is not to forbid changes of interest among the partners themselves, but relates exclusively to assignments and alienations to third persons.
The second theory is maintained in the single case of Hobbs v. The Memphis Ins. Co., 1 Sneed 444. Most of the cases which are relied on against us are founded on and follow the dictum of Judge Cady in the case of Murdock v. The Chenango County Mutual Ins. Co., 2 Comst. 210, which was overruled in Hoffman f Place v. The Ætna Fire Ins. Co., 32 N. Y. 405. In the cases of Grosvenor v. The Atlantic Fire Ins. Co., 17 N. Y. 391, and The
Buffalo Steam Engine Works v. The Sun Mutual Ins. Co., 17 II. 401, cases which have been followed by the courts of every state whose attention has been called to the subject since, it is held that where a mortgagor insures, loss, if any, payable to his mortgagee, or where a mortgagor insures and assigns, with the consent of the underwriter, to his mortgagee, a subsequent breach of the conditions of the policy by the mortgagor avoids the policy. Why? Because in both these cases, it is the mortgagor's interest which is insured. The discussion in both these cases proceeds upon the supposition that had it been the mortgagee's interest which was insured, as it was in Foster v. The Equitable Mutual Fire Ins. Co., by reason of his having given new premium-notes upon the assignment to him, the act of the mortgagor would have had no such effect. Although the decisions in 17 New York were followed in Massachusetts, in Hall v. Mechanics’ Ins. Co., 6 Gray 185, and Loring v. Manufacturers’ Ins. Co., 8 II. 169, yet the principle decided in Foster v. The Equitable Mutual Fire Ins. Co., has been since affirmed in the case of Lawrence v. The Holyoke Ins. Co., 11 Allen 387.
It follows from this, that an alienation other than by the "insured” does not avoid a policy. Hence we may conclude that if a firm be insured, the alienation by a partner of his individual interest, especially to his copartners, is not forbidden; but, or the contrary, that the real purpose and intent of the parties in agreeing to the language used in the policy, is to prevent alienation to third persons by the firm, which shall introduce strangers into the proprietary interest and control, unless hy consent of the company: 32 N. Y. 412; Burnett f. Martin v. The Eufaula Home Ins. Co., 46 Ala. 11; Pierce v. The Nashua Fire Ins. Co., 56 N. II. 297; Angell on Ins., sect. 197. An insurance policy is to be most strongly construed against the underwriter : May on Ins., sects. 174, 175.
Matthews, Ramseyf Matthews, for defendant in error. The single question presented by the record is, whether the assignment by one of the partners, to his copartners, of his interest in the
of policy and property insured, before loss, defeats the recovery the plaintiffs. The affirmation of this proposition is sustained by May on Insurance, sect. 280; Doehrer v. Etna Ins. Co., 18 Vo. 128; Flanders on Insurance 428. And see Hoffman v. Ætna