The herald., 1894-08-25
THE LAW rs SETTLED.
Vhe Supreme Court Passes Upon thu L
ability of Seockholders.

The Supreme Court Passes Upon the L.
ability of Stockholders.
An opinion was received by Deputy
Clerk Sesnon OF tile supreme court an
nogncing the decision of the court
in tho case of the Sank OF San Luis
Obispo. respondent. vs. the Pacific Coast
Steamship company, appellant.
This suit was begun June 8, 1890, TO
recover from the defendant as stock
holder in the San Luis Hotel company
it's proportion CT an indebtedness alleged
to be due from the hotel company TO the
plaintiff.
TWAS averred in the com plant that
the capital stock OF the hotel company
was $4,000, divided into 750 sheres of
the par value of 500, aud that the de-
tendant was the owner of 81. IA shares of
the stock; that December, 80, 1886. the
hotel company borrowed from the plain.
tif 500, ,l77.66, and gave its promissory
note Tor that amount.
1t was further averred that on or about
April IL, 1890, an action was begun
against the hotel company to recover the
amount due on the note for principal.
interest. attorneys fees and costa, and
that on or about the Both day OF the
Same month judgment was given against
the defendant for sS237.93; that after.
wards an execution was issued upon the
Judgment and returned wholly unsatis-
fed, and that the proportion OF the in
debtedness for which the defendant was
individually and personally liable was
$2l05.07, with interest from date OF j1dg-
meut, and that no part had been paid.
The defendant 6emurred to the COM
plaint. upon the grounds that the cause
OF action WAS barred by the provisions OF
subdivision ! of section 33S, and by the
provisions of section 359 of the code OF
civil procedure.
The demurrer was overruled and the
defendant then anewered, and, among
other defeEses set up, pleaded in bar OF
the action the same provisions OF the
code.
The case was tried and the court
| found. among other things, that the ac-
tion was not barred, and that the plain
tiff was entitled to judgment for the cum
of $l25l.63, with costs. Judgment was
entered, from which the appeal was
| taken.
| The supreme court, in deciding the
question raised, says that the demurrer
should have been sustained, and con-
tnuea:
"The action was commenced more
than three years and five montha after
the date of the note set out. The cause
OF action appeared, therefore, on the face
OF the complaint to be barred by statute
of limitations.
st must now be regarded az settled
law in this state that the liability of
stockholder of a corporation to pay his
proportion OF its corporate debts, is one
created by statute, and an action to en-.
force that liability must be brought
within three years after the cause OF &C.
ton accrues. Moore vs. Boyd, IA CAL,
l67; Hyman vs.. Coleman, 50 Cal, $50 /;
Hunt VS.. Ward, 80 CAL, 612.) In the
caee laet mentioned it was held that the
liability OF eteckholder of a corporation
upon note given by the corporation is
created, within the meaning of section
359 OF Che code of civil procedure, at
least as early as the date OF the note,
and the statute of limitations COM
mencea to run in favor OF the tockholder
FROM the date of its execution, ard not
from its maturity, regardless of how long
the liability of the corporation to actions
may be postponed by agreement of the
creditor. The judgment appealed from
| is reversed ard the cause remanded."