105 Ky. 648 | Ky. Ct. App. | 1899
delivered the opinion op the court.
In 1S65 the “National Express & Transportation Company,” a corporation, was organized under the laws of the State of Virginia. The appellant, Calloway, subscribed for $2,500 of its capital stock. Only twenty per cent, of the stock seems to have been paid to the corporation by the subscribers. In 1866 it became insolvent, and made to certain persons an assignment of its property in trust for the benefit of its creditors. The trustees seem to have done nothing, or but little, towards executing the trust, and one of the creditors filed a bill in the chancery court of the'city of Richmond, State of Virginia, to enforce it; and the court removed the trustees, and appointed John Glenn in their stead. The court ascertained the debts of the corporation, and adjudged that eighty per cent, of
The question in this case is, what effect should be given to the judgment of the chancery court of the city of Richmond? If it is conclusive, then none of the defenses relied upon by the appellant is available. Judge Robertson, whose genius and erudition enabled him to write so luminously and perspicuously that every important legal question he discussed was made interesting, a'nd was adorned by his pen, did not allow his reputation to suffer in delivering the opinion in Williams v. Preston, 3 J. J. Marsh., 601, [20 Am. Dec., 179], wherein he considered the faith and credit which should be given to judgments of courts in sister States, and said that they should be in
This conclusion was correct, because section 1, article 4, of the Constitution of the United States, provides “that full faith and credit shall be given in each State to the public acts, records and judicial proceedings of every other State,” -and, pursuant to that provision of the Constitution, the Congress enacted a law in which it is declared that records properly authenticated “shall have such faith and credit given to them in every court within the United States, as they have by any law or usage in the courts of the State from which the said records are or shall be taken.”
In Williams v. Preston, it is said: “This court would not dispute a regular judgment, rendered by a competent court of another State according to her local laws, as expounded by her supreme. authority, so far as it had the right to expound and settle them.”
The doctrine was announced in that case that a personal judgment rendered in Virginia against a defendant, a resident of this State, who was not served with a process in that State, or who had not entered his appearance to the action, was invalid. The decree rendered in Virginia, upon which this action was brought, was not a personal judgment. The court had jurisdiction of the subject matter of the litigation, and jurisdiction of the bankrupt corporation and its trustee, and it could rightfully settle the trust estate, and determine who
In Williams v. Preston the question was not involved or considered as to what was the effect of the judgment in a sister State as to privies; nor was the question involved in that case as to what would be the effect on the rights of stockholders in an action to which the corporation was, but they were not parties, of a judgment making a call upon them for the payment of unpaid stock. At that time but few questions were arising in the courts of this State involving corporate rights, or the rights of stockholders therein. The stockholder is so far an integral part of the corporation that, in view of the law, he is privy to-the proceedings touching the body of which he is a member.
It was said in Sanger v. Upton, 91 U. S., 56: “It was not necessary that the stockholders should be before the court when it [the order] Vas made, any more than that they should have been there when the decree of bankruptcy was pronounced. That decree gave the jurisdiction and authority to make the order. The plaintiff in error could not, in this action, question the validity of the decree; and for the same reason she could not- draw into question the validity of the order. She
This court has its labors very much simplified and lightened by reason of the adjudications of the Supreme Court of the United States, the Supreme Court of Appeals of Virginia, and the Court of Appeals of Maryland, in -which cases Avere considered the identical questions involved in this case, and Avere actions based upon the decree sought to be enforced in this action, except, in the Virginia case, it Avas a direct attack upon it.
In Hawkins v. Glenn, 131 U. S., 332 [Sup. Ct., 743], the court had under consideration the question as to the effect of the decree which is the basis of this action, and said: “We think it can noc be doubted that a decree against a corporation, in respect to corporate matters, such as the making of an assessment in the discharge of a duty resting on the corporation, necessarily binds its members, in the absence of fraud, and that this is involved in the contract created in becoming a stockholder.
The decree of the Richmond Chancery Court determined the validity of the assessment and that the lapse of time between the failure of the company and the date of the decree did not preclude relief, by creating .a bar through statutes of limitation or the application of the doctrine of laches. And so it has been held in numerous cases referred to in the argument. The court may have erred in its conclusions, but its decree can not be attacked collaterally, and, indeed, upon a direct attack, it has already been sustained by the Virginia Court of Appeals.”
Hamilton v. Glenn, 85 Va., 901 [9 S. W., 129], was a direct attack upon a decree, and the court held that the stockholders were not necessary parties to the action, and were bound by it.
lYe are of tbe opinion that, from tbe nature of tbe contract wbicb tbe. appellant entered into when be became a stockholder in tbe company., be is a privy to tbe decree, and is bound by it. Tbe authorities to wbicb we have called attention fully sustain this proposition, and they also bold that tbe statute of limitation did not begin to run until after tbe court entered an order assessing tbe stockholders. It therefore follows that tbe plea of limitation is not available. Tbe defense that compromises were made with some of tbe stockholders under tbe decree of 1883 is not good, because the conclusive nature of tbe decree making tbe call for tbe fifty per cent, precludes such a defense here. Tbe judgment is affirmed.