116 Cal. 169 | Cal. | 1897
Appeals from the judgment and from the order denying a new trial.
Plaintiff pleaded that the defendant, the Electric Rapid Transit Company, was a corporation organized and existing under the laws of the state of Kansas, and that it was not a railway, religious, or charitable corpo
The defendants other than the Electric Rapid Transit Company are sued as stockholders of that corporation.
The action, then, is an effort upon the part of the judgment creditor of the Kansas corporation to enforce against California stockholders their statutory liability for the judgment debt.
1. On the trial, the provisions of the Kansas constitution and statutes bearing upon the questions were introduced in evidence. Section 11 of article XII of that constitution provides as follows: “Debts from corporations shall be secured by individual liability of the stockholders to an additional amount equal to the stock owned by each stockholder, and such other means as shall be provided by law, but such individual liabilities shall not apply to railroad corporations, nor corporations for religious or charitable purposes.” Section 1192, article
Plaintiff’s action is admittedly an attempt to charge the stockholders under the italicized portion of the statute above quoted. Appellant’s contention is, that all of the provisions of this act contemplate special statutory remedies given by the laws of another state, and not consonant with the laws and procedure of this state, and that such liability cannot be enforced in this action. It is undoubtedly true that penalties and special remedies provided by the laws of a state will receive no extraterritorial recognition, and may not be imported into the courts of another state. That question has recently received careful consideration at the hands of this court, and it is necessary to do no more than refer to the case of Russell v. Pacific Ry. Co., 113 Cal. 258. Upon the other hand, it is equally true that when a statutory liability is not in its nature penal, and does not depend upon remedies whose enforcement is peculiar to the courts of the state which has created the law—where, in short, the statutory liability is a simple personal liability growing out of the contract of the shareholder,
It is to be considered, then, whether the statute of Kansas above quoted, in creating the specific liability, designates a mode for its enforcement which may not be exercised without the jurisdiction of its courts, or whether it merely provides for a personal liability, enforceable in an action at law in any of the courts of sister states possessing common-law jurisdiction.
It will be noted that the statute in question offers a twofold remedy to the judgment creditor of a corporation whose execution has been returned nulla bona. It first provides a remedy peculiar to the laws of Kansas and unenforceable in other forums. The second is embraced in the portion of the statute which has been italicized. That this language empowers the judgment creditor to maintain his action at law against a share, holder wherever he may be found, and to do this without first obtaining a judgment against the Kansas corporation in the courts of the state where the statutory liability of the shareholder is sought to be enforced, we entertain no doubt, and, if doubt were to be entertained, the numerous and uniform decisions of the supreme court of Kansas, of the federal courts, and of the courts of sister states so interpreting this clause, would be sufficient to remove it.
In Howell v. Manglesdorf, 33 Kan. 194, the court had under review this statute, and, interpreting it, said: “It will be observed that two remedies for enforcing the individual liability of stockholders are prescribed in the statute above quoted. In the one case the judgment creditor of an insolvent corporation may proceed by a summary action on a motion in the court where the judgment was rendered against the corporation; in the other, by an ordinary action to be instituted wherever personal jurisdiction of the stockholders can be acquired. .... This ruling does not debar a creditor of the insolvent corporation of a remedy against the stockholder residing in another state, and upon whom service can
In the federal courts, also, the same statute, and the rights of litigants under it, frequently have been the subject of consideration. Thus, in Bank of North America v. Rindge, 57 Fed. Rep. 279, the suit was an action at law by a judgment creditor of a Kansas banking cor. poration against the defendant as a stockholder in that corporation to enforce the stockholder’s liability under the statute in question. It was held that the action-would lie; that under the interpretation given to the law by the Kansas courts the stockholder’s statutory liability was in the nature of a contract of guaranty, and that a judgment creditor might proceed against the stockholder accordingly. Such also was the decision of the federal courts in Rhodes v. United States Nat. Bank, 66 Fed. Rep. 512, and McVickar v. Jones, 70 Fed. Rep. 754.
The same law has passed under the review of the supreme court of Missouri in the case of Guerney v. Moore, 131 Mo. 650. It was there held that the judgment creditor might proceed by an ordinary action at law against the stockholder wherever personal jurisdiction of the stockholder could be obtained, and that the statute of Kansas was the measure of the stockholder’s liability.
Bank of North America v. Rindge, 154 Mass. 203, 26 Am. St. Rep. 240, is relied on by appellants as being in opposition to these authorities. In that case the supreme court of Massachusetts regretted that under the
It may, therefore, be concluded with much certainty that under the Kansas statute the liability is in contract, and is not penal; that the rights of the judgment creditor and the reciprocal rights and duties of the stockholder are measured by this statute, and that, under the law, the creditor who has obtained judgment in Kansas against a corporation, upon which judgment an execution has been issued and returned nulla bona, may pursue the stockholder in an action at law wherever jurisdiction of his person may be obtained, and secure judgment against him; that he may sue one or many of the stockholders; that he may take judgment against them without first having obtained judgment against the corporation in the state in which his action against the stockholders is commenced; and that the measure of the individual stockholder’s liability is the face value of his shares, together with the amount of his unpaid subscription thereon. (Flash v. Conn, supra; Hoyt v. Bunker, 50 Kan. 574; Bagley v. Tyler, 43 Mo. App. 195; Aldrich v. Anchor etc. Co., 24 Or. 32; 41 Am. St. Rep. 831; Dennick v. Railroad Co., supra; Paine v. Stewart, 33 Conn. 516.
The judgment and order are therefore affirmed.
Temple, J., and McFarland, J., concurred.
Hearing in Bank denied.