Diversey v. Smith. the charter is subscribed," etc. The eighth section directs how its capital shall be invested. The ninth section provides what real estate may be owned. In the tenth section it is enacted that "the charter and proof of publication herein required to be filed by every such company shall be examined by the attorney-general, and if found conformable to this act and not inconsistent with the Constitution or laws of this State, shall be certified by him to the auditor of public accounts, who shall thereupon cause an examination to be made, either by himself or by three disinterested persons specially appointed by him for that purpose, who shall certify under oath, that the capital herein required of the company named in the charter, according to the nature of the business proposed to be transacted by such company, has been paid in and is possessed by it in money or in such stocks and bonds and mortgages as are required by the eighth section of this act; * and the corporators and officers of such company shall be required to certify under oath that the capital exhibited to those persons is bona fide property of the company. Such certificate shall be filed in the office of the said auditor, who shall thereupon deliver to such company a certified copy of the charter and of said certificates, which on being filed in the office of the clerk of the county where the company is to be located, shall be their authority to commence business and issue policies; and such certified copy of the charter and of said certificates may be used in evidence for or against said company." * * It thus conclusively appears that until after the auditor of public accounts shall have delivered to the company the certified copy of the charter and certificates, and the company shall have filed them in the office of the proper county clerk, there is no authority whatever for the company to commence business and issue policies, and any attempt on his part to do so before, is in direct violation of the statute, for a provision that certain things shall be done to constitute a license or authority is equivalent to an express prohibition against the license or authority unless those things shall be done. "It is," says Dwarris, "a maxim, generally true, that if an affirmative statute, which is introductive of a new law, directs a thing to be done in a certain manner, that thing shall not, even although there are no negative words, be done in any other manner." Potter's Dwarris on Statutes, 72. The command of the law then is, business shall not be commenced, and policies issued unless those things are done which are Diversey v. Smith. * * required as a license or authority to commence business and issue policies; and to compel obedience to this command, the sixteenth section imposes a punishment for its violation, namely: "The trustees and corporators of any company organized under this act shall be severally liable for all debts or responsibilities of such company to the amount by him or them subscribed, until the whole. amount of the capital of such company shall have been paid in, and a certificate thereof recorded, as hereinafter provided." * "Dues" from such corporations "are secured as prescribed by law," in the requirement that the capital of the company "has been paid in and possessed by it in money, or in such stocks and bonds and mortgages as are required by the eighth section of this act," before they are allowed to commence business, and in the enforcement of this requirement by penalties of individual liability upon the trustees and corporators. Still although the company is thus prohibited from commencing business and issuing policies before those things are done which are essential to constitute a license or authority, if in defiance of this prohibition, it should commence business or issue policies, as between it and those with whom it should assume to contract, it would after the other party had performed his part of the contract and the company had received the benefit of it be estopped to deny its authority to make the contract, and would be liable thereon in an action at the suit of the creditor. Bradley v. Ballard, 55 Ill. 413; s. c., 8 Am. Rep. 656; Darst v. Gale, 83 Ill. 136; Peoria and Springfield R. Co. v. Thompson, 103 id. 187. See also Field on Corp., §§ 259, 260, 261; 2 Pars. on Cont. 790. Such debts or responsibilities are therefore legally the debts or responsibilities of the company, and it is to be noted that the sixteenth section does not provide that the debts or responsibilities thus contracted shall be deemed and treated as the debts or responsibilities of the trustees or corporators instead of the company, or jointly and severally of the trustees and corporators and company, but expressly designates them as "the debts or responsibilities of such company." The company is treated as primarily liable, and the trustees and corporators are held liable, not because of their debt or responsibility, or of their and the company's debt or responsibility, but solely on account of the debt or responsibility of the company. At common law a trustee or corporator is not liable for a debt contracted by a corporation, and if he shall be made primarily liaVOL. XLII-3 Diversey v. Smith. ble for such debt by statute, it must be because the statute in some way makes him a contractor in such case. It must be within contemplation of law, at least, that the company can contract on behalf of trustees and corporators, or on behalf of itself and them. To create such a relation in the absence of an express contract, the authority would necessarily have to affirmatively appear in the statute. But the statute under consideration, instead of containing language to that effect, prohibits the making of all contracts. imposes the liability upon the trustees and corporators, not because the company was authorized to contract in their names or on their behalf, or so as to otherwise bind them, but because it prohibited the commencing of business and issuing of policies, and the trustees and corporators in violation of their duty, caused or permitted business to be commenced and policies to be issued. Sedgwick says: "Penal statutes are acts by which a forfeiture is imposed for transgressing the provisions of the act." He moreover adds: “A penal law may also be remedial, and a statute may be remedial in one part and penal in another." Stat. and Const. Law, 41. In Potter's Dwarris on Statutes, 74, it is said: "A penal statute is one which imposes a forfeiture or penalty for transgressing its provisions or for doing a thing prohibited." It is the effect, not the form of the statute that is to be considered, and when its object is clearly to inflict a punishment on a party for violating it— i. e., doing what is prohibited, or failing to do what is commanded to be done it is penal in its character, and the circumstance that in punishing remedy is likewise afforded to those having an interest in the observance of the statute, is unimportant. Accepting it as settled that the liability imposed is not a primary liability, a significant and to us conclusive fact to be taken into consideration in the character of liability imposed by the sixteenth section is, that the plaintiff's right of recovery is totally unaffected by any actual loss or injury he may have sustained by the failure or neglect of the trustees or the corporators. Although he might collect the debt from the corporation, this is no defense. Whether all the capital, or all but a nominal sum, or whether but an insignificant amount of the capital has been collected and paid in, would obviously be unimportant inquiries. He is only required to show that he is a creditor of the company, that the defendant is a trustee or corporator, and that the whole amount of the capital of such company has not been paid in, and a certificate thereof recorded as provided in the tenth section of the act. Diversey v. Smith. Counsel for appellant refer to and rely upon Corning v. McCul lough, 1 Comst. 47; Coleman v. White, 14 Wis. 762; Harger v. McCullough, 2 Denio, 123; Paine v. Stewart, 33 Conn. 516; Young V. Rosenbaum, 39 Cal. 646; Fuller v. Ledden, 87 Ill. 310; Aspinwall v. Sacchi, 57 N. Y. 331; Norris v. Wrenschall, 34 Md. 492; Culver v. Third National Bank, 64 Ill. 529; Steele v. Dunn, 65 id. 298; Corwith v. Culver, 69 id. 502. These cases are all plainly distinguishable from the present case. In Corning v. McCullough, the statute provided in one of its sections (sec. 9), "that the stockholders of the corporation shall be jointly and severally personally liable for the payment of all debts and demands contracted by the corporation, and that any person having any demand against such corporation may sue any stockholder or director in any court having cognizance thereof, and recover the same, with costs." The liability was thus unquestionably primary, and bound the stockholders without limitation to the payment of all corporate debts. The court, in speaking of it, said: "The personal liability of the stockholder to creditors under this charter, for the debts of the company, is an element of the incorporation which wholly excludes all claim of any stockholder to treat those debts as debts of the corporate body solely, which he did not contract and is not bound to pay. The stockholders all stand under this act of incorporation on the same ground, and under the same responsibility as respects creditors as they would, if unincorporated. have stood." There was lawful authority to contract debts, and by the act of becoming a stockholder the defendant and the other stockholders became jointly and severally liable with the corporation for the debts. Harger v. McCullough, was under the same charter, and deserves no further notice. In Paine v. Stewart, the liability was of the same character as that imposed in Corning v. McCullough. In Coleman v. White, the liability was also of like character. The court there said. "We are of opinion that the liability is primary and absolute, and attaches the moment the debt is contracted by the bank; that it is a liability of all the stockholders to all the creditors on the principle of co-partnership, the stockholders standing on substantially the same footing as though they were partners or unincorporated association, save only that the responsibility of each is limited to a sum equal to his share or shares of stock. Subject to this limitation, they are answerable as original Diversey v. Smith. or principal debtors, and their liability more nearly resembles that of co-partners than any other to which it can be compared." Young v. Rosenbaum, belongs to the same class of cases. The liability there was primary and absolute. The corporation was lawfully authorized to contract (not prohibited as here, from contracting) debts, for which the stockholder was made primarily liable. The court said: "When a debt accrues against the corporation it also accrues against the stockholders, and they remain such debtors until the debt is paid or satisfied." In Norris v. Wrenschall, the court distinguishes the case from Bank of Plymouth v. Price, 33 Md. 487, which we shall hereafter refer to, and says: "The section we are now considering not only does not forbid the contracting of debts before the capital stock is paid in, but allows it to be done, on condition that those who are stockholders at the time shall become severally and individually liable therefor." In Fuller v. Ledden, the third section of the bank charter expressly provided, that "each stockholder shall be liable to double the amount of stock held or owned by him, and for three months after giving notice of transfer." There was affirmative power in the corporation to contract debts, and a primary liability therefor was imposed on the stockholder. Culver v. Third Nat. Bank, Steele v. Dunn, an' Corwith v. Culver, were actions brought under the ninth section of "An act to authorize the formation of corporations for manufacturing, mechanical or chemical purposes" (Session Laws of 1857, p. 163), which provides: "All the stockholders of every such company shall be severally individually liable to the creditors of the company to an amount equal to the amount of stock held by them respectively, for all debts and contracts made by such company prior to the time when the whole amount of its capital stock shall have been paid in, and a certificate thereof made and filed, as hereinafter required.” But section 1 of that act provides, that "any three or more persons who may desire to form a company for the purpose of carrying on kind of manufacturing business, may make, sign and file in the office of the clerk of and also in the office of the secretary any and acknowledge, * * the Circuit Court, * * * * * of State, a certificate in writing, in which shall be stated the corporate name of the said company, the object for which it is formed, the amount of the capital stock thereof, the term of its existence, |