72 Md. 331 | Md. | 1890
delivered the opinion of the Court.
This is another of the many actions that have been brought by Grlenn, trustee, against stockholders of the National Express and Transportation Company, a cor
The defendants pleaded five pleas: first, That they never were indebted as alleged; second, That they never promised as alleged; and the third and fourth pleas, being special pleas, were demurred to; and by the fifth plea it was alleged that the National Express and Transportation Company was never duly served with process to appear in the suit in the Chancery Court of Richmond, and therefore the decree of the 14th of December, 1880, and all the orders passed in. that cause, were and are, as against the defendants, null and void. Issues were joined on the first, second, and fifth pleas, and they were tried and passed upon by a jury, who found for the plaintiff, under instructions given by the Court.
There is no conflict or dispute in regard to the main facts of the case. All the statute law of Virginia, including the charter of the National Express and Transportation Company, bearing upon the questions involved; the record of the Chancery suit in Virginia, referred to in the declaration; and also the petition of the defen
It appears that the shares of stock in respect of which this suit was brought, had all been acquired and held by the defendants in 1866, and had all been sold and transferred by them to other parties, by actual transfer on the books of the corporation, and for which certificates had been issued by the company to the transferrees, prior to the 20th September, 1866, the date of the deed of assignment to trustees for the benefit of the creditors of the corporation. The plaintiff admitted, in respect to the ownership of the stock, that the assessment of $30 per share, sued for in this case, had been by the plaintiff collected from other persons, claimed to be liable therefor, as holders of such stock, as to 175 shares, part of the 385 shares; and that the assessment claimed of the defendants in this case is upon 210 shares. It was also shown in evidence that the plaintiff, by letter dated the 16th of March, 1881, gave notice to the defendants of the assessment upon the stock, and demanded payment within twenty days from that date.
Upon this evidence the jury were.instructed by the Court, at the request of the plaintiff, that if they found from the evidence that the defendants were stockholders of the National Express and Transportation Company before the passage of the decree of December 14th, 1880, by the Chancery Court of the City of Richmond, mentioned in the declaration, then, under that decree, and the laws of Virginia given in evidence, the defendants became liable to pay to the plaintiff the sum of $30 per share on each and every share of said stock which the jury might find to have been held by the defendants before the date of said decree of December 14th, 1880, less the amount of $30 per share on each and every share
1. This instruction would appear to be strictly in accordance with the provision of the statute law of Virginia, in regard to corporations, in force at the time of the organization of the National Express and Transportation Company, and which was in force at the date of the decree of December 14th, 1880, and it was with reference to the provisions of the Virginia statute, that all the shares of stock of the corporation were issued to, held and transferred by, those dealing in such stock. In the Code of Virginia of 1860, tit. 18, ch. 57, sec. 24, but in Code of 1873, same tit. and ch., sec. 26, it is provided, that “No stock shall be assigned on the boohs without the consent of the company, until all the money which has become payable thereon shall have been paid; and on any assignment the assignee and assignor shall each be liable for any instalments which may have accrued, or which may thereafter accrue, and may be proceeded against in the manner before provided. ” And by sec. 29 it is provided, that “If any such person shall, for valuable consideration, sell, pledge, or otherwise dispose of, any of his shares of stock to another, and deliver to him the certificate for such shares, with a power of attorney authorising the transfer of the same on the books, the title of the former (both at law and in equity) shall vest in the latter so far as may be necessary to effect the purpose of the sale, pledge or other disposition, not only as between the parties themselves, but also as against the creditors of any subsequent purchasers from the former, subject to the provision of the twenty-sixth section. ’ ’
As we have said on a former occasion, when required to construe this same provision of the statute, the terms of the 26th section would seem to be too clear for any
We have, however, been strongly xirged to reconsider our previous construction of these sections of the Virginia statute; and if we could see that there was any reasonable ground for supposing that there was error in our construction adopted in the case of McKim vs. Glenn, we should not hesitate to reconsider that construction, and to correct the error. But we see no reason to doubt the
2. Now, in order to avoid the liability thus fixed by the statute, and authorized to be enforced by the decree of December 14th, 1880, the defendants have set up certain special defences, which have not heretofore, in any of the numerous cases founded upon the call made by the decree of December 14th, 1880, in the different Courts of the country, been attempted to be availed of, — certainly not heretofore judicially sanctioned as valid defences, in any of the cases to which we have been referred, — and not even suggested by the defendants themselves, in their petition for review and reversal of the decree of December 14th, 1880, filed so late as November 3rd, 1881, the final adjudication upon which rvas made by the Court of Appeals of Virginia, and to Avhich we have already referred.
The third idea entirely fails to present a ba,r or full answer to the action. If the facts alleged were found to be true, they would not entitle the defendants to the verdict. The plea does not present a material, single, and certain issue of fact, which, if found for the defendants, would constitute a full answer to the claim made by the declaration, and therefore bar the right to recover. If the matter set up in the plea were available at all, it would only be in reduction of the 30 per cent, call upon the stock, and would be admissible in evidence under the plea of never indebted as alleged.
But we cannot perceive upon what principle the matter of this plea can avail the defendants in any form. The plea alleges that after the decree of December 14th, 1880, ascertaining the amount of indebtedness of the National Express and Transportation Company, and fixing the rate of assessment upon each aud every share of the capital stock of the company, for the purpose of paying the debts thus ascertained, the various creditors and complainants, (without naming the creditors') for the purpose of avoiding the possible result of a pending litigation as to the validity of the decree of December 14th, 1880, institxxted by certain stockholders, assented to the passage of an order by the Court, of -July 21st, 1883, whereby the plaintiff, as trustee, was authorised and directed to accept from any of the stockholders of the company, or from any other person claimed to be liable on account of the stock, within six months from the date of said order, $25 per share, part of the $30 per share called for by the decree of December 14th, 1880, with interest axxd costs, “in full discharge of all further liability, of all persons on account of the shares of stock wherever such payment should be made.” That the stockholders who insti
The defendants, while they allege that the proceedings that led to the decree of July 21st, 1883, were had without their knowledge, do not allege that they were not aware of the offer made by the decree, within the period allowed for the election to accept the terms prescribed , nor do they allege that they were prevented from availing themselves of the terms offered by the decree by anything done or said by the plaintiff, or those represented by him. On the contrary, we find from the record in
3. With respect to the fourth plea, a different question is presented, hut one, we think, which was correctly determined by the Court below.
This fourth plea makes defence on equitable grounds, and sets itp matter supposed to be sufficient to vacate and completely destroy the validity of the decree of the 14th of December, 1880, under which this suit is brought. It is alleged by the plea, that in the case in which the decree of December 14th, 1880, was passed, reference had been made to a commissioner to ascertain the amount of debts of the corporation, and to whom due ; that the commissioner reported a very large amount of indebtedness as being due to a large number of persons and corporations ; that the company was without counsel to represent it, and without officers, resident in the State
The facts alleged in this plea are set up and attempted to he availed of as a defence and har to recovery, in a purely collateral proceeding. They do not present the question of the want of jurisdiction of the Chancery Court of Richmond to render the decree of December 14th, 1880. That Court was one of competent jurisdiction, and it is not denied, indeed conceded, that it had acquired jurisdiction over the corporation as defendant, and those represented by it, by service of process upon one of the directors and upon the cashier of the company. A single member of a board of directors of a corporation, while service of process upon him may be sufficient to bring the corporation into Court to defend, is not clothed with power, or charged with the duty, of making and conducting a defence for the corporation. He may defend for himself, if he is sought to be charged or affected by the decree, but he is not required alone, nor is he authorised, to assume the duty and responsibility of shaping and prosecuting any particular defence for and in behalf of the corporation ; nor is the corporation bound by a defence interposed by a single director. General Ins. Co. vs. United States Ins. Co., 10 Md., 517; Peck vs. Detroit Novelty Works, 29 Mich., 313; 1 Moraw. on Corp., sec. 531. Anderson being made a party defendant to the bill of complaint, appeared and answered, but not in his character of director, and did not admit that he was a director of the company ; and it was not until the making of the decree of December 14th, 1880, that it was determined and finally settled that he was a director, and that the service of process upon him was sufficient to subject the corporation to the jurisdiction of the Court.
It has heen strongly argued, however, that as fraud vitiates everything, even the most solemn judgments or decrees of the highest Courts, the allegation of fraud as affecting a decree of a sister State ought to be allowed, if supported by facts, as a defence to an action founded on the decree; and this notwithstanding the provision of the Constitution and. laws of the United States, that “full faith and credit shall be given in each State to the public acts, records, and judicial proceedings of every other State ; ” and that they “shall have such faith and credit given to them in every other Court in the United States as they have by law or usage in the Courts of the State from whence the said records were or shall be taken.” The general proposition contended for, as applied to judgments and decrees, is undoubtedly true. But the question here is, whether such defence can he taken in a collateral proceeding, founded upon a decree, where, to give effect to such defence, the decree of a Court of competent jurisdiction of a sister State is required to be reviewed, and declared null and void, by the Court in which such defence is made ? This is a Federal question, and the Court of last resort for the determination of such question would seem to have defi
In the case of Christmas vs. Russell, 5 Wall., 290, it was held by the Supreme Court of the United States, upon careful review of the authorities, that a judgment conclusive between the parties in the State where rendered is equally so in every other Court in the United States, and consequently that the plea of fraud in procuring the judgment is not á legal answer to the declaration; in other words, that the plea of fraud is not available' as an answer to an action on the judgment; and that such judgment can only be impeached by a direct proceeding taken for the purpose. And so in the case of Maxwell vs. Stewart, 22 Wall., 77, it was held by the same Court, that fraud could not be pleaded to an action in one State upon’a judgment recovered in another. In that case the late Chief Justice Waite, in delivering the opinion of the Court, said: “In Christmas vs. Russell, 5 Wall., this Court held that fraud could not be pleaded to an action in one State upon a judgment in another. With this we are satisfied. ” And in the still more recent case in the same Court, of Hanley vs. Donoghue, 116 U. S., 1, 4, it is laid down as the settled law of the Court, that “Judgments recovered in one State of the Union, when proved in the Courts of another, differ from judgments recovered in a foreign country in no other respect than that of not being re-examinable upon the merits, nor impeachable for fraud in obtaining them, if rendered by a Court having jurisdiction of the cause and of the parties. ”
Nor has this Court been less explicit in laying down the law upon this subject. In Glenn vs. Williams, 60 Md., 121, while considering the effect of this same de
If there was ground for supposing that there had been fraud or collusion practiced in obtaining the decree, to the wrong of the defendants, they should have applied to the Court rendering the decree, upon the distinct ground of such fraud or collusion, for a reversal or vacation of such decree, and not attempt an impeachment of it in a collateral proceeding in another jurisdiction. In such direct proceeding against the decree for reversal or vacation, all the parties concerned would have been
We think, for the reasons stated, the Court below was clearly right in sustaining the demurrer to the fourth plea.
4. The only remaining question presented on this record, is one in regard to the right of the plaintiff to recover interest on the assessment. The Court below instructed the jury to allow interest on the assessment from the 3rd of January, 1881, the day on which the plaintiff bonded and qualified as trustee; and refused a request by the defendants to instruct that the question of interest was one entirely within the discretion of the jury, and that interest should be allowed or not, as the jury might determine, under the circumstances of the case.
The original subscription to the stock of the corporation, in respect of which the defendants are sued, was a Virginia contract, and had reference to the law of Virginia, existing at the time, as to the nature and extent of its obligation. The Code of Virginia of 1860, the provision of which is continued in that of 1873, tit. 18, ch. 57, secs. 21 and 23, declares that “If the money, which any stockholder has to pay upon his shares, be not paid as required by the president and directors, the same, with interest thereon, may be recovered by warrant, action, or motion as aforesaid.” The Supreme Court of the United States, in the case of Hawkins vs. Glenn, supra, quote the section of the Virginia Code just recited, and say that “Interest would, therefore, seem chargeable
Judgment reversed, and new trial awarded.