Case ID: mich_35/html/0103-01.html
Source: Caselaw Access Project
Author: {"author": "Cooley, Ch. J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*John J. Bagley v. Luther Beecher.
    
      Stockholder's liability for labor debts: Contribution: Joint judgment: Several promises. The suit provided for by the statute (Comp. L. 1871, § 2852) is one for contribution, wherein the stockholder who has paid is to recover from, one or more others the amount the latter should ratably pay for his reimbursement; and a.joint judgment, by which one party defendant would be charged, not only for his own delinquency, but for that of others also, is not warranted. The words of the statute ought to be very plain in order to be held to authorize a joint judgment on promises which were several; and what is contemplated by this statute is a recovery against each of Ms ratable proportion, his stock being the basis of estimate.
    
    
      Heard October 12.
    
    
      Decided October 24.
    
    Error to Superior Court of Detroit.
    Luther Beecher, having been compelled as a stockholder to pay a judgment obtained against him under the statute, for labor debts of the Detroit Novelty Works, a manufacturing corporation, brought this action against all the other stockholders, under Comp. JO,, § 2852, to recover the ratable amount due to him from them on account of such payment. He was allowed by the court below, against objection, to take a joint judgment against all the defendants for an amount equal to such a proportion of the whole sum paid by Beecher as the stock of all the defendants together was to the whole stock of the company. John J. Bagley, one of the defendants, brought error.
    
      Griffin & Dickinson and Hoyt Post, for plaintiff in error.
    
      Baker <& Thompson, for defendant in error.
    
      
       TJnder the statute the stockholder is not liable primarily but as surety: Hanson v. Donkersley, 37 NIich., 184. As to what are not labor debts, see Taylor v. Manwaring, 48 Mich., 171; Jones v. Avery, 50 id., 326.
    
   Cooley, Ch. J.:

The court below has acted, we think, upon a wholly erroneous view of the statute under which the action was brought.

The statute is a follows: “The stockholders of all corporations founded upon this act shall be individually Hi-able for all labor performed for such corporation, which said liability may be enforced against any stockholders by action founded on this statute, at any time after an execution shall be returned and [as] not satisfied, or any time after an adjudication in bankruptcy against such corporation: Provided always, That if any stockholder shall be compelled by any such action to pay the debts of any creditor, or any part thereof, he shall have the right to call upon all the stockholders to contribute their part of the sum so paid by him as aforesaid, and may sue them, jointly or severally, or any number of them, and recover in such action the ratable amount due from the stockholder or stockholders so sued.” — Gomp. L., § 2852.

Now, it is manifest, we think, that the suit here provided for is a suit for contribution, in which the stockholder Who has paid is to recover from one or more others the amount he or they should ratably pay for his reimbursement, and it does not contemplate a joint judgment, by which one party defendant would be charged, not only for his own delinquency, but for the delinquency of others also. The words of a statute ought to be very plain before it should be held to authorize a joint judgment on promises which were several.

But such a joint judgment is not in furtherance of the purpose of the statute. It does not enforce contribution, and under the view taken by the plaintiff it might require as many suits as there are stockholders before contribution is rendered complete. Suppose in this case after a joint judgment against twelve the execution is collected of one, he in turn might sue the others, and the one from whom he collected might repeat the operation, and so on. And the numerous suits would not be the only extraordinary result, but the last responsibile party from whom collection was made would be left to bear the loss resulting from the irresponsibility of others. It is impossible to suppose the statute has intended such an absurdity. When it authorizes a suit against several for their ratable proportions, what *is contemplated is a recovery against each of his ratable proportion, his stock being the basis of estimate.'

The judgment must be reversed, with costs, and a new trial ordered.

The other justices concurred.