6 Mich. 441 | Mich. | 1859
The defendants, with some eighty-nine others, formed an association, styled “The Novi and White Lake Plank Road Company,” under the act of 1851. A judgment was obtained against the company by the assignor of the complainant, for work and labor done, and for other indebtedness, to the amount of about three thousand four hundred dollars, and an execution was issued thereon, and returned unsatisfied, except as to the sum of twenty-two dollars. Thereupon this bill was filed against the stockholders, to recover the amount of the judgment. A general demurrer was interposed to the bill, and it is now urged that the bill should be dismissed for want of proper parties; the defendants insisting that all the shareholders should have been made defendants to the suit.
A careful examination of the statute, and a consideration of its purposes, satisfies us that the liability created by the statute is in no sense joint. The section creating it is as follows: “The stockholders of every company incorporated under this act, shall be jointly and severally liable in their individual capacity for all labor performed for such company; and shall also be liable for the payment of the debts of such company for an amount equal to the amount of stock they have severally subscribed or held in said company, to be recovered of the stockholder who is such when
This view- is strengthened by a consideration of those portions of the statute which provide for and govern these proceedings in chancery against the individual stockholders, Sec. 1918 of chap. 65 provides, that no such proceedings shall be had against them until after a judgment against the company, and the return of an execution unsatisfied in whole or in part, or until the company shall have been dissolved; and further provides that “Any stockholder who may have paid any debt of said company, either voluntarily or by compulsion, shall have a right to sue and recover of such company the amount thereof, with interest, costs, and ex, penses; and any such stockholder who may have paid as aforesaid, shall have a right to bring an action against, and recover of, the rest of the stockholders, or any one or more of them, the due proportion thereof which such stockholder or stockholders ought to pay; and if such action for contri, bution shall be brought against more than one stockholder,
Reading all these provisions together, it is very clear that they give to a creditor a right, in a case like the present, to •sue and collect from one or more of the stockholders, the ■amount of his demand; a contrary construction .of the law would, in many, and perhaps in most, instances, render' it impotent to afford a remedy, as the great number of stockholders in many of these associations, their liability to be •scattered all over the country, and the consequences of the -death of any of them, before or pending the litigation} would render a joinder of all frequently an impossibility, and always of so d btful and expensive a natme as to deter a plaintiff from pursuing the remedy. But were the liability of the stockholders to be construed as strictly joint and several, we think the objection for want of parties could not prevail in equity, as it is a well settled rule that when it is apparent that the parties who may be affected by the decree are very numerous, and that to require the joinder ■of ah who may be interested will be virtually to deny any •remedy to a complainant, their joinder will tnot be insisted upon. — See 2 Pet. 483, 487, 488.
The next, and principal, question arises upon the con■struction of the statute creating the liability (§1916, sivpra,). The defendants insist, that, by a correct construction, this section imposes upon the stockholder a liability equal only to the amount of his stock, less the sum paid in thereupon, except for labor performed, for which, it is conceded, he is ■liable, irrespective of the amount of his stock, or the payments thereon-: . that, if the whole stock had been paid in.
The statute can receive no such construction. The stock, when paid in, either wholly or in part, becomes a portion of the corporate property; and as this remedy against the stockholders can only be pursued after judgment against the com-, pany, and the return of an execution unsatisfied, wholly or in part, the presumption is that this has been already reached by the execution, or that it has been otherwise appropriated;. If it has not all been paid in, a court of equity, upon long established and well settled principles, would compel its collection by the directors of the company, as a fund for the benefit of creditors.
The effect of the construction contended' for by the de^ fendants is that the Legislature intended nothing by this, provision, as the stockholders are liable to the extent con-, tended for, by virtue of their subscription, and under the. common law.
It was to extend this liability beyond that incident to. their subscription to the stock, or subsequent purchase, and to impose upon them an additional individual liability to, creditors, that this provision was inserted in the law. They are liable individually, whether subscribers or purchasers, to the extent of their stock, above their liability in their cor-, corporate capacity. Such liability for general debts is precisely the same in character as that for labor performed, with this difference only, that for general debts it is limited to the amount of their stock, while for labor performed for the company it is limited only by the amount of the demand. — See Briggs v. Penniman, 8 Cow. 395.
The decree must be affirmed, with costs.