95 Cal. 578 | Cal. | 1892
Many of the questions discussed by
In this case the corporation was not made a party. No objection on the ground of non-joinder of the corporation as a party defendant was made in the court below by demurrer or by answer. The defect was therefore waived. (Code Civ. Proc., sec. 434.) Doubtless the corporation should always be made a party to the suit; but it is not an indispensable party, unless the object of the action is to secure an adjudication of the rights and liabilities of all the parties, and a final settlement of the affairs of the company. When the purpose of a suit is to compel payment of a debt out of the unpaid subscription of a single stockholder, the corporation if not made a party cannot be prejudiced by a judgment against the stockholder, and if he sees fit to go to trial and judgment without objecting to the non-joinder of the corporation, he will not thereafter be heard to complain. It is not claimed in this case, as it was in Baines v. Babcock, that all the stockholders were necessary parties defendant.
It is contended by appellant that the Santa Rosa Laud and Improvement Company is similar in its nature to the South Mountain Consolidated Mining Company, the mining corporation considered by Judge Sawyer in 8 Saw. 366. It is a sufficient answer to this contention to state the purposes for which the corporation under consideration was organized, viz., “ for the purpose of acquiring real property by purchase or otherwise in the county of San Diego, state of California, buying and selling the same, building hotels, street-railroads, and otherwise developing lands.” It stands upon the same basis as the “ banking, railroad, insurance, and like commercial corporations having a subscribed capital stock,” referred to by Judge Sawyer.
It is claimed that there is another distinction between this case and the case of Baines v. Babcock. It is said
We do not think there is any materiality in the distinction pointed out, or any merit in the contention made thereon. It is true, in Baines v. Babcock the complaint alleged that some of the stockholders were “non-residents or insolvent persons,” which allegation was denied, but the court treated the issue as an immaterial one, and found that the stockholders referred to were not necessary parties to the action, and this view was sustained here. In Morawetz on Private Corporations, it is said that a judgment creditor, after the return of his execution nulla bona, may maintain an action “ to compel the share-holders to contribute so much of the capital subscribed by them as will be sufficient to satisfy the claims of the plaintiff and other creditors who may come in for payment. Such a proceeding may be maintained, although the creditors have a statutory right to proceed against the share-holders directly at law.” (Sec. 866.) The error of the appellant arises from his failure to consider the unpaid subscriptions as a corporate asset, which a creditor has the undoubted right in equity to follow wherever the same may be found, when his remedy at law against the corporation ^has been ex
Judgment and order affirmed.
De Haven, J., Sharpstein, J., and McFarland, J. concurred.
Harrison, J., dissented.