135 Mich. 248 | Mich. | 1903
{after stating the facts).
Chapter 269 of the Compiled Laws relates to proceedings against corporations in chancery. It provides, among other things, that circuit courts in chancery shall have jurisdiction over directors and other officers of said corporations, to compel an accounting of their official conduct-, etc. It provides, also, for sequestering the property of a corporation where a judgment at law or decree in chancery shall be obtained, and an execution returned unsatisfied. Section 9780, 3 Comp. Laws, reads:
“ The provisions of this chapter shall not extend to any incorporated library or lyceum society; to any religious corporation, or any incorporated academy or select school; nor to the proprietors of any burying ground incorporated under the laws of this State.”
It is the contention of the defendants that the bill in this case is filed under chapter 269, and that the section above quoted prohibits the maintenance of the bill in this case. If this contention be maintained, it follows that there is no liability imposed upon the stockholders of the corporations enumerated in section 9780 to pay for their stock which they have subscribed and own. A corporation for cemetery purposes may buy land, issue its obligation to the purchaser, due at a future time, and may contract for building the necessary house or houses thereon, the erection of fences, etc.; but, when these creditors ask for payment, the corporation may, through its directors and stockholders, say to them: “We have no tangible property which you can reach upon execution. We have not paid for our subscriptions, and you cannot compel us to, because the statute prohibits it.” Such a proposition is shocking to the moral sense of every honest man. It is
Aside from the remedies and proceedings provided by chapter 269, courts of equity have jurisdiction in many cases. The remedies therein provided are not exclusive. If there were no statute upon the subject, equity would have jurisdiction to compel stockholders to pay the amount of the capital stock into the treasury of the corporation for the payment of its debts. In Brown v. Mining Co., 105 Mich. 653 (63 N. W. 1000), the bill was filed to wind up the affairs and distribute the assets of the corporation. The bill was dismissed. We held that “the court had jurisdiction of the subject-matter independently of the statute.” So, in this case, the remedy provided by the statute is merely cumulative. See, also, Jordan v. Everett, 93 Tenn. 390 (24 S. W. 1128); Jones v. Boston Mill Corp., 4 Pick. 507 (16 Am. Dec. 358); Biddle v. Moore, 3 Pa. St. 161. The bill in this case is in form the same as would be filed if no statute existed. It does not refer to the statute. It is the common-law duty of a creditor in such cases to proceed first against the property of the corporation, to ascertain if any can be found to satisfy his debt, before proceeding against the stockholders. The proceeding against the stockholders would be entirely unnecessary if there were tangible assets subject to the payment of creditors. But, as already stated, this act upon which the defendants rely does not exempt them from
The case is remanded for further proceedings in accordance with this opinion. The complainant will recover the costs of this court.