Bayliss v. Swift

| Iowa | Jun 17, 1875

Day, J.

Section 1166 of the Eevision of 1860, 689 of the Code of 1851, provides that a failure to comply with certain-requisitions in relation to the organization and • publicity of corporations, renders the individual property of all the stockholders liable for the corporate debts. Section 1068 of the Code of 1873 is substantially the same, except as to railway-corporations. Section 1172 of the Eevision, 695 of the Code of 1851, provides: “Nothing herein contained exempts the stockholders of any corporation from individual liability to the amount of the unpaid installments on the stock owned by them or transferred by them for the purpose of defrauding creditors, and execution against the company may to that extent be levied upon such private property of any individual.” Section 1082 of tbe Code of 1813 is substantially tbe same. Section 1173 of the Revision, 696 of tbe Code of 1851, is as follows: “ In none of tbe cases contemplated in this chapter, can tbe private property of tbe stockholders be levied upon for tbe payment of corporate debts while corporate property can be found with which to satisfy tbe sanie; but it will be sufficient proof that no property can be found if an execution has issued on a judgment against tbe corporation a.nd a demand thereon made of some one of tbe last acting officers of the body for property on which to levy, and if be neglects to point out such property.” Section 1083 of tbe Code of 1873 is tbe same.

Section 1174 of tbe Revision, 697 of tbe Code of 1851, is as follows: “ Tbe defendant in any stage of a cause may point out corporate property, subject to levy, and upon bis satisfying tbe court of the existence of such property, by affidavit or otherwise, the cause may be continued or execution against tbe defendant stayed until the property can be levied upon and sold, and tbe court may subsequently render judgment and order execution for any balance which there may be after disposing of the corporate property, according to the stage of the'cause; but if a demand of property has been made, as contemplated in tbe preceding section,’ tbe costs of such proceedings shall in any event be paid by tbe company or by tbe defendant.” The corresponding section, 1084, of the Code of 1873, is as follows: “ Before any stockholder can be charged with tbe payment of a judgment rendered for a corpoorate debt, an action shall be brought against him, in any stage of which he may point out corporate property subject to levy; and upon his satisfying the court of the existence of such property, by affidavit or otherwise, the cause may be continued, or execution against him stayed, until the property can be levied upon and sold, and the court may subsequently render judgment for any balance which there may be, after disposing of the corporate property; but if a demand of property has been made, as contemplated in the preceding section, the costs of said action shall, in any event, be paid by the company or the defendant therein, but he shall not be permitted to controvert the validity of the judgment rendered against the corporation, unless it was rendered through fraud and collusion.”

Appellant concedes that, under the Code of 1851, and the Eevision, the practice, after judgment and execution against 1. corporaity *of stockholders: judgment. the corporation, was to bring in stockholders on scire facias, and have judgment that the execution . , J 43 against the corporation be levied upon their property to the extent of their liability. But he contends that section 1084 of the Code of 1873 differs materially from section 1174 of the Eevision, and authorizes an ordinary judgment against the stockholders. And we think the section in question sustains this position. It provides that “before any stockholder can be charged with the payment of a judgment rendered for a corporate debt, an action shall be brought against him.” The section does not prescribe what kind of action shall be brought, and there is no principle of construction which warrants us in determining it to mean any other than the ordinary action attended by the ordinary consequences.

Appellee, however, cites section 1082 of the Code, providing that “ execution against the company may, to that extent, 2__._. • be levied upon the private property of any such individual,” and contends that it is inconsistent with the notion that a new judgment may be rendered against a stockholder. This, however, may be so construed as to be in perfect harmony with our construction of section 1084. After it has been determined that an individual is a stockholder, and a judgment has been rendered against him for the amount of his liability, then an execution issued against the corporation may, to the extent of the judgment -rendered against a stockholder, be levied upon his private property.

"We are satisfied that the court erred in sustaining the demurrer.

Eeveesed.