55 Mo. 418 | Mo. | 1874
delivered the opinion of the court.
As the only question in this case arises on the sufficiency of the petition, it will be necessary to state it in substance. The action is brought by Perry & Brothers, a partnership firm doing business under that name, against Turner, Hays, Wasson and others, alleged to be stockholders in the St. Louis and St. Joseph railroad company, to recover the amount of $22,500, alleged to be due from that company to the plaintiffs.
It is alleged that in 1868 the company was duly organized
The number of shares of stock which each defendant held is there stated, as also the fact that they continued to hold such shares up to the date of said dissolution; that none of the defendants had paid the debts sued for, or any part of them, nor have they or either of them ever paid into said company any amount over and above the amount of capital stock held by each.
The plaintiffs then proceed to set out at large the various items of indebtedness of -the company to them growing out of work and labor done and materials furnished, and certain bills of exchange drawn on the company and accepted by them, but which the plaintiffs having indorsed had ultimately to pay, and also sundry settlements had with the company which left the company in debt to them in the sum of $7,858.13, due on the 18th day of October, 1870; and for all these items or amounts, with interest, they ask judgment. The details of these claims are immaterial to the consideration of the questions to be decided. The plaintiffs further state that on the 20th of December, 1870, the company became and was wholly and completely insolvent and unable to pay its debts and liabilities; that on said day said company was declared bankrupt by a court of competent jurisdiction, and thereupon all its property, real, personal, etc., was assigned and transferred to an assignee appointed by the said court in bankruptcy; that from this time the company abandoned its business, and ceased to operate its road and has never since re-organized, etc. Whereupon the plaintiffs state that, by reason of the facts above stated said company was dissolved on the day and year last aforesaid. Plaintiffs also state that by virtue of the statutes relative to corporations and by virtue of the provisions of the constitution and laws of the State of Missouri, the defendants became
After answers and replications had been filed, and the case came up for trial, the plaintiffs offered evidence to sustain the various allegations of the petition, which being objected to, the court sustained the objection. Whereupon the plaintiffs took a non-suit, with leave, etc.
This petition is obviously framed upon a misconstruction of the 22d section of the first article of our law concerning Private Corporations. The suit is brought against several stockholders to recover certain debts against the company, on the allegation of a dissolution of the corporation. The 22d section provides “ that if any company formed under this act dissolve, leaving debts unpaid, suits may be brought against any person or persons who were stockholders at the time of such dissolution, without joining the company in such suit.” And it is assumed that this language is broad enough to declare that the stockholder or stockholders sued, are liable for the amount of the indebtedness, without regard to the amount of stock he lipids. In other words, upon a dissolution of a corporation, under the act, each stockholder is responsible for the debts of the corporation, as in case of partnership. A stockholder owning only one share, if a hundred dollars, is liable for a debt of the corporation which may be to fifty times the amount of his stock. Such a construction, however it might comport with the literal meaning of the terms of the act,would be rather startling to those who have embarked in such enterprises. The legislature had undoubtedly the power to make each stockholder responsible for all the debts of the company, the only limit to the power of the legislature under the constitution being that .the responsibility should
Put the concluding part of this section seems to show very conclusively, that the legislature had no design to exact from a stockholder any amount over and above the amount of stock he held. For it provides that where such suits are brought against the stockholder, and a recovery is had and executions are satisfied, the stockholder thus sued and compelled to pay the judgment “ may sue all who were stockholders at the time of the dissolution for the recovery of the portion of such debt for which he was liable, and the execution upon the judgment shall direct the collection to be made from property of each stockholder respectively: and if any number of stockholders (defendants in the case) shall not have property enough to satisfy his or their portion of the execution, then the amount of deficiency shall be divided equally amongst all the .remaining stockholders, and collections made accordingly, deducting from the amount a sum in proportion to the amount of stock owned by the plaintiff at the time the company dissolved.”
This section is manifestly a 'copy of the 32d section of the act of 1855 concerning Koad Associations, under which only a single liability was attached to stockholders; and the legislature neglected to make the corresponding changes which the constitution of 1865 ■ required. So that, under this 22d section as it stands copied from the law of 1855, the defendants are not liable at all under the allegations of the petition, which concede that they had fully paid up their respective shares of stock; for the 39th section of this law of 1855 declares in so many, words “that a stockholder in any company formed under this act shall not be liable for more than the amount of his stock,” and the 22d section of the act of 1865 is a simple repetition, word for word, of the 32d sec* tion of the act of 1855, above referred to.
But conceding that as the Constitution did not permit the legislature to diminish the liability of the stockholders below
This point was sufficiently considered by this court in State Savings Bank vs. Kellogg (52 Mo., 583). In that case this court adopted the views of the New York courts in the construction of a similar provision of their corporation law, Slee vs. Bloom,(19 Johns., 456,) and Briggs vs. Penniman,(8 Cow.387,) and held that a formal surrender or a judgment of dissolution at the instance of the State, was not necessary to authorize the creditors to sue the stockholders under this 22d section. The averments in that case were that the corporation was wholly insolvent and bankrupt, and was totally without funds or means, whereby it became dissolved, by reason of a total want of funds or means to exercise its corporate powers. In this case the allegation is that the St. Louis and St. Joseph railroad company became and was wholly and completely insolvent and unable to pay its debts and liabilities, and had been declared bankrupt in the United States District Court, and all its effects had been assigned and transferred to the assignee appointed by that court. This allegation is not so exact and complete as the allegations in the ease of the State Savings Bank vs. Kellogg, but we suppose no allegations are necessary, except that the company was dissolved, and it is not necessary to state the facts upon which that allegation is based. They are matters of proof, and it is for the court on the trial, to declare whether a dissolution within the meaning of the law is established.
The responsibility of the stockholders is undoubtedly secondary and contingent, and the statute only relieves the creditors from pursuing the corporation in case of its dissolution. What facts will constitute such a dissolution is not necessary to be averred in the pleadings. (Bank of Poughkeepsie vs. Ibbotson, 24 Wend., 473.)
But treating it as an action at law to recover the liability imposed by the constitution, and the statute, it is equally defective, since there is no joint liability imposed in such cases. Each stockholder is responsible to creditors for the amount or double the amount of his stock, as the case may be, and a joint judgment could not be rendered. This is clearly established in) the case of Ibbotson, above referred to, where the New York statute is substantially the same as ours. Justice Nelson says in that case: “There can be. no doubt that the liability of the stockholders is several and not joint. The measure of it may be wholly different in each case, depending upon the shares held. A joint suit would be impracticable as there could be no joint judgment. Besides the act did not intend that they should be sureties for each other; Each is severally responsible to the amount of his own stock.”
In Norris vs. Johnson, (34 Md., 485) no different doctrine is maintained'. That was a suit against a single stockholder, and it was held, as it was in the case of Ibbotson, that such an action was maintainable at law, although there were other creditors besides the one suing. In neither case is it denied that a remedy in equity against all the stockholders might be pursued.
In Massachusetts the doctrine has been, that the creditor is confined to his remedy in equity, as it requires the party seeking to enforce the liability to join in the suit all the parties in interest who are to be affected by the’ decree, and thereby avoids a multiplicity of actions and apportions among all the
But in New York and Maryland they allow a creditor to bring his action at law against any stockholder, and so in this State I suppose the double liability can be enforced against any stockholder by an action at law, although an equitable suit might be maintained against them all to contribute the share of each in proportion to his stock to the debts sued on.
The case of State Savings Bank vs. Kellogg (82 Mo., 583), has been cited to show that a joint action at law may be maintained ; but an examination of that case as reported does not establish any such doctrine. No such question was raised, or discussed, or decided, nor does the statement show that any such question could have arisen. The suit in that cáse may have been against all the stockholders and it may have been an equitable proceeding. It was certainly only to recover the amount due from each defendant proportioned by the amount of stock owned by him. Nothing more was claimed and no question of the misjoinder of parties defendant was made.
If the action is to be regarded as an equitable one, then the question arises, whether a single creditor can select a certain number of stockholders from whom to exact their respective liabilities without suing for all others who may be creditors, and against all the stockholders who may be liable, thus apportioning the responsibilities as the law ultimately designs them to be. This is the mode pursued in Massachusetts (Harris vs. First Parish of Dorchester, 23 Pick, 112; Erickson vs. Nesmith, 15 Gray, 221), and the only mode there tolerated. But our law, as in New York and Maryland, allows an action at law against any stockholder; the stockholder thus compelled to pay must resort to his remedy for contribution against other stockholders. But such a proceeding, whether at law or equity, is not upon a joint liability and can only reach the individual liability of each stockholder, and if brought against more than one stockholder must necessarily be a proceeding in equity.
It is intimated by the court in the case of Kritzer vs. Woodson, 19 Mo., 327, that the section of our statute which ren
How far the existence of these contemporaneous provisions of the constitution and statute would affect the liability in this case under the decision of Hawthorne vs. Calef, and other decisions of this court following that case, may be a question worth considering. But I will not be understood as expressing any opinion, either for myself or my brother judges, on this point. It is clear that the statutes designed to carry out this 6th section of the 8th article, now repealed since November, 1870, may limit the enforcement of such liability as to time.
I think the judgment must be affirmed.