34 Minn. 323 | Minn. | 1885
The plaintiff, a creditor of the corporation defendant, sues it for the debt, and joins the other defendants, subscribers to and holders of its capital stock, to have determined and
To sustain the ground of demurrer that there is a defect of parties defendant, the defendants claim that the plaintiffs only remedy to enforce the liability against them is an action under chapter 76, in the nature of a suit in equity against all the stockholders, in which all the creditors should be joined as plaintiffs. Although it is not clear from the complaint that there are other stockholders than the defendants subject to liability on account of unpaid instalments on stock, we shall, for the purpose of deciding the question presented, assume that there are. That question is, do the provisions of Gen. St. 1878, c. 34, allow the creditor of a corporation included within it to bring an action in the nature of an action at law against the corporation, to establish the debt, and join in it one or more, though not all, of the stockholders, for the purpose of enforcing against him or them the individual liability for the corporation debts? It has not been directly decided by this court. In Dodge v. Minnesota Plastic Slate Roofing Co., 16 Minn. 327, (368,) the action was under chapter 34, but there had been a judgment for the debt rendered against the corporation in a prior action, and the point made was that the liability of the corporation and stockholders was joint and was merged in the judgment. The court overruled the point. In Johnson v. Fischer, 30 Minn. 173, the corporation was not one of those provided for in chapter 34, and it was therefore held that the
The sections of chapter 34 necessary to consider are the ninth, tenth, and eleventh. Section 9 merely defines the liability. Sections 10 and 11 are as follows:
“Sec. 10. The private property of no stockholder shall be levied on under the preceding section unless such stockholder, as well as the corporation, is duly served with process in the action, and the issue involving his individual liability, as aforesaid, raised and determined; and in no case whatever shall such property be levied on while sufficient corporate property can be found to satisfy the execution, or any part thereof.
“Sec. 11. The officer holding an execution which may be levied on private property, as aforesaid, shall make demand of payment thereon of the president, secretary, or some officer of the corporation, acting, or who was one of the last acting officers thereof; and if he does not forthwith pay said execution, or point out corporate property that may be levied on, the officer shall indorse the fact of such demand, refusal, or neglect upon said execution, and thereupon may levy the same upon the private property of the stockholder served and im-pleaded as aforesaid. Such levy may be made to satisfy any balance due upon the execution after levy upon corporate property, or part-payment out of corporate funds.”
These sections imply an action in which the corporation and the stockholder or stockholders sought to be held must be both served with process, so that judgment may be rendered against each, and in which, in addition to the issue against the corporation, there shall be the issue against the stockholder involving his individual liability,
In the action or actions authorized by chapter 76, there is no suggestion of proceeding upon execution in the manner prescribed in chapter 34. Those seem to be rather in the nature of actions to wind up the affairs of a corporation, to collect and convert all its assets, and appropriate them ratably among its creditors, and to enforce the liability of stockholders to the extent of any deficiency of assets, — actions not proceeding in the ordinary way of actions at law by trial of simple issues, judgment, and execution, but by the exercise of powers peculiar to the former court of chancery, by sequestration, appointment of receivers, taking of accounts of debts and assets, etc. Thus, upon the return unsatisfied of an execution against a corporation, there are provisions for sequestration of its stock, property, things in action, and effects, and the appointment of a receiver, (section 9;) and in such case for a pro rata distribution of its property among its creditors. Section 10. It provides for actions to dis
We have examined thus at large the provisions of chapter 76, to ascertain the character of action therein intended, and to determine if the action indicated in chapter 34- is of the same character, and must be instituted and proceeded with in the same manner, as is provided in the other chapter. From our comparison of the two chapters we are satisfied that the action indicated in chapter 34 is
It follows that this action is well brought, and the order appealed from is affirmed.