Case Name: Woodruff & Beach Iron Works, Plaintiffs and Respondents, v. Henry A. Chittenden, Appellant; Same Plaintiffs v. Simeon B. Chittenden, Appellant; Same Plaintiffs v. Wm. H. Pomeroy, Appellant; Same Plaintiffs v. Isaac N. Phelps and John J. Phelps, Appellants; Same Plaintiffs v. Theodosius Strang, Appellant
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1859-03-26
Citations: 4 Bosw. 406
Docket Number: 
Parties: Woodruff & Beach Iron Works, Plaintiffs and Respondents, v. Henry A. Chittenden, Appellant. Same Plaintiffs v. Simeon B. Chittenden, Appellant; Same Plaintiffs v. Wm. H. Pomeroy, Appellant. Same Plaintiffs v. Isaac N. Phelps and John J. Phelps, Appellants. Same Plaintiffs v. Theodosius Strang, Appellant.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 17
Pages: 406–420

Head Matter:
Woodruff & Beach Iron Works, Plaintiffs and Respondents, v. Henry A. Chittenden, Appellant. Same Plaintiffs v. Simeon B. Chittenden, Appellant; Same Plaintiffs v. Wm. H. Pomeroy, Appellant. Same Plaintiffs v. Isaac N. Phelps and John J. Phelps, Appellants. Same Plaintiffs v. Theodosius Strang, Appellant.
1. In an action against a stockholder of a corporation, created under the “act to authorize the formation of corporations for manufacturing, mining, mechanical and chemical purposes,” (passed February 17, 1848, ch. 40,) to recover of such stockholder to the amount of the stock held by him; on the ground that the plaintiff owns a judgment against such corporation on which an execution has been issued and returned unsatisfied; it is not of itself a defense, that such judgment, though recovered upon a debt contracted with a person not a stockholder, was recovered by a person who was a stockholder, and was subsequently assigned to the plaintiff.
2. The stockholders of corporations created under that statute, are, under seotion 10, severally, individually, liable to the creditors of the Company, only to an amount equal to the amount of the stock held by them respectively, until the acts required by that section have been performed. Their liabilities are fundamentally different from those of the Eossie Caleña Company, (as expounded in 1 Comst., 47.)
3. The recovery from a stockholder, in a corporation created by the act of February 17, 1848, of an amount equal to the amount of the stock which he holds, by a creditor of the Company, would be a defense to a suit brought against him by any other creditor of such Company.
4. If a creditor suing a stockholder also holds stock less in amount than that held by the person so sued, the defendant is not on any principle entitled to any greater relief than ’an abatement from the liability declared by statute, of a sum equal to the amount of the stock held by such plaintiff.
5. But such a deduction, thus made, unless made to one who was at the time a creditor of the company, would not exempt such plaintiff from a recovery against him in a suit subsequently brought by a creditor of the Company.
6. The mere fact, therefore, that the plaintiff, in a suit against the Company, in which a judgment was recovered against it, was a stockholder, is not available as a defense, either partial or total; in an action brought by the assignee of such judgment against a stockholder, especially when it is not alleged in the answer that the plaintiffs’ assignor was a stockholder; nor shown at the trial how much stock he held.
(Before Bosworth, Ch J., and Woodruff, J.)
Heard, November 11, 1858;
decided, March 26, 1859.)
This is an appeal by the defendant, Henry A. Chittenden, from a judgment, entered on a verdict rendered against him upon a, trial had before Mr. Justice Pierrepont and a jury, on the 18th of February, 1858, in an action in which the Woodruff & Beach Iron Works are plaintiffs.
The action was commenced May 20th, 1856, by the plaintiffs, a corporation created under the laws of Connecticut, against the defendant, as a stockholder of The Hudson River Stone Dressing Company, a manufacturing Company organized under the general manufacturing law of The State of New York, passed February 17, 1848.
The plaintiffs’ claim was upon a judgment recovered in the Superior Court of the city of New York, by Samuel Woodruff and Henry B. Beach against The Hudson River Stone Dressing Company, June 12th, 1855, for $23,366.61, and assigned to the plaintiffs.
The complaint avers that on the 31st of March, 1853, at the city of New York, George Bliss, Charles Abernethy and Charles T. Shelton duly signed and acknowledged a certificate of incorporation of The Hudson River Stone Dressing Company, as required by law, and sets out the certificate, which states, among other things, that the capital stock of the Company is to be $200,000, divided into 200 shares; and that the trustees who shall manage its concerns for the first year are George Bliss, Charles Abernethy and Charles T. Shelton. That in April, 1853, the last said Company was duly organized, and prosecuted the business, for which it was incorporated, until after the debt (hereinafter mentioned) was contracted.
That the whole of the capital, $200,000, was never paid in, nor was any certificate of the paying in thereof ever made or filed as required by section 11 of the act of February 17th, 1848.
That the plaintiffs, in November and December, 1853, and January and February, 1854, sold and delivered to The Hudson River Stone Dressing Company machinery for its business, of the price and value of over $22,000, in payment for which the Company, by Charles Abernethy, its Treasurer, duly authorized, made and delivered to plaintiffs nine promissory notes; two for $2,000 each, payable to the order of Woodruff & Beach, and all the others to the order of Woodruff & Beach Iron Works.
That none of the nine notes were paid at maturity, and that on the 14th of September, 1854, all the notes and the claim of the Woodruff & Beach IronWorks thereon were assigned and transferred to Woodruff & Beach.
That Woodruff & Beach brought suit against The Hudson River Stone Dressing Company, on this claim, in the Superior Court of New York, April 11, 1855, and recovered judgment June 12th, 1855, for the amount and interest, $23,366.61, and issued execution, which was returned wholly unsatisfied.
That this judgment was assigned by Woodruff & Beach to plaintiffs, February 22, 1856, and all the claims on which it was recovered.
The complaint then alleges that defendant was a stockholder in the Company from the time of the making of the notes till the return of thé execution, to the extent of 33 shares, and demands judgment for $3,330.
The answer denies each allegation of the complaint, and sets up as matter of defense, that the demands embraced in the judgment against The Hudson River Stone Dressing Company, set forth in the complaint, had been paid or secured to be paid by the trustees of the Company, for whose benefit this action is in fact prosecuted. It does not allege that Woodruff & Beach, the assignors of the plaintiff, were at any time stockholders in The Hudson River Stone Dressing Company.
It appeared on the trial that the plaintiffs’ corporation was formed October 29, 1853, and was composed of no other parties as stockholders or parties interested, than Samuel Woodruff and Henry B. Beach, and one Charles L. Root, previously the bookkeeper of Woodruff & Beach.
That the capital stock of this corporation was $225,000, being, the works of Woodruff & Beach, put in at a valuation of $225,000. That the firm of Woodruff & Beach has never been dissolved, but it has done no business in the way of manufacturing since the plaintiffs were incorporated.
At the trial the plaintiffs proved the notes, judgment and execution, and the several assignments and transfers above stated; and also that the defendant was a holder of eight shares of the stock of the Hudson River Stone Dressing Company; and also that Woodruff & Beach had been stockholders in it from the time it was organized; but there was no evidence tending to show how much stock they, at any time, either jointly or severally held.
It also appeared that Woodruff & Beach, before suing the Hudson River Stone Dressing Company, (as before stated,) brought suits against the Trustees of that Company. After the Trustees were sued, an agreement was made between them and Woodruff & Beach, that the suits against the Trustees should not be further prosecuted, until suits had been brought against the stockholders to recover the same demand, and the result had been ascertained. That Abernethy gave to Woodruff & Beach, under this agreement, his note for $12,500, and Bliss gave his note for $10,000, which notes had been paid. The witness (Samuel Woodruff) by whom the making of this arrangement was proved, testified, that “this arrangement with Abernethy and Bliss was made by Woodruff & Beach, and the notes were received by them; these notes were advanced by Abernethy and Bliss, not as payment at all, but as collateral security; we never received a dollar on account of the notes on which judgment has been recovered, * * we do not pay back unless we recover; * * whatever we first recover, goes to Bliss and Abernethy; we still have a claim against Abernethy and Bliss” for $14,000, “if we don’t get it in one way, we mean to get it another.” He also testified, that the suits brought against the Trustees were still pending, and that the agreement made with them was in writing, and present in Court.
.It was not read or offered in evidence, notwithstanding the plaintiff objected and excepted to the admission of the parol evidence given in respect to the terms of such agreement.
When the plaintiff rested, the defendant moved to dismiss the complaint, upon the grounds:
1. That there was no proof that Abernethy had authority to execute the notes sued on.
2. That the action is not properly brought; that all stock holders should have impleaded in one suit.
3. That the defendant, being a holder of full paid stock, has complied on his part with the requirement of the statute, and is not liable. And that, at all events, the plaintiffs must first exhaust all their remedies against the delinquent subscribers.
4. That Woodruff & Beach, being stockholders of the Hudson River Stone Dressing Company at the time the judgment was obtained by them, could not have brought their action against a co-stockholder in this form, and that these plaintiffs, as assignees, took no better or greater rights by their assignment.
The motion was denied, and the defendant excepted.
When- the testimony was closed, the defendant renewed his motion to dismiss the complaint, on the same grounds. It was denied, and he excepted.
The counsel for the defendant further insisted that it appeared by the evidence that the claim on which the action was brought had been paid to the plaintiffs by Abernethy and Bliss, two of the trustees and stockholders, and that said Abernethy and Bliss are the real parties in interest in this action.
But his Honor the Judge decided that there was not sufficient evidence to go to the jury on that point. To which decision the counsel for the defendant then and there excepted.
And the Judge instructed the jury, as matter of law, that they must find a verdict for the plaintiffs for the amount claimed, with interest.
To which decision and instruction the counsel for the defendants then and there excepted.
The jury, under the instruction of the Court, returned a verdict for the plaintiffs, for the sum of -eight hundred and ninety-eight dollars.
Judgment having been entered on the verdict, the defendant appealed from it to the General Term. Appeals by the defendants, irf the other suits brought by the same plaintiffs, viz., one against Simeon B. Chittenden; one against William H. Pomeroy; one against Isaac 1ST. and John J. Phelps, and one against Theodosius Strang, and presenting substantially the same pleadings, evidence, and exceptions, were argued at the same time, by the same counsel, and on the same points.
William Allen Butler, for appellant (the defendant).
I. The plaintiffs have no right to maintain this action, and the complaint should have been dismissed at the trial, as prayed, inasmuch as they derive their cause of action by assignment from Woodruff & Beach, who were stockholders in the Hudson River Stone Dressing Company, at the time the debt averred in the complaint was contracted, and at all times thereafter.
1. Woodruff & Beach, being stockholders of the Hudson River Stone Dressing Company could not themselves have brought an action against any other stockholder for the recovery of the debt in question. (Bailey v. Bancker, 3 Hill, 188.)
2. The reason of this inability is, that, until the capital stock was fully paid in, all the stockholders were answerable for the debts of the Company, and one stockholder could not maintain an action against the others for a debt due from the whole. The stockholders were not liable as sureties for the Company, but as principals and copartners. (General Manufacturing Law, 1 R. S., 4th ed., 1216, § 28; Bailey v. Bancker, 3 Hill, 188, opinion of Bronson, J., and cases cited there; Harger v. McCullough, 2 Denio, 119, 123; Corning v. McCullough, 1 Comst., 47.)
3. The stockholders being thus liable, Woodruff & Beach could not, by assignment of the judgment recovered by them against the Company, confer any greater rights than they themselves had as judgment creditors. No transaction between them and third parties could give a right of action on the judgment which they did not themselves possess. (Bailey v. Bancker, 3 Hill, 188.)
4. The difficulty is not removed by the assumption that the plaintiffs, the Woodruff & Beach Iron Works, and not Woodruff & Beach, were the original creditors.
(1.) Conceding that the.Iron Works had a cause of action against the defendant and other stockholders before their assignment of the notes to Woodruff & Beach, it was extinguished by that assignment, and could not be revived by any subsequent assignment from Woodruff & Beach to them.
(a.) The assignment by the Iron Works was absolute “ to them, the said Woodruff & Beach, and their personal representatives forever.” Though a formal instrument of transfer, it did not even contain power to sue and collect in the name of the assignors.
(5.) Up/to the time of this assignment, Woodruff & Beach were liable as stockholders to the plaintiffs. By virtue of the assignment, the right of the creditor and the liability of the debtor met in the same persons, and the right of action was discharged. (Blanchard v. Ely, and cases there cited, 21 Wend., 343; Thomas v. Thompson, 2 Johns., 471, 474.)
(c.) The fact that Woodruff & Beach were liable only to the extent of their stock, does not alter the case. The assignment to Woodruff & Beach, although it transferred the entire cause of action on the notes as against the Hudson River Stone Dressing Company, yet, as between them and their co-stockholders, gave them only a right to contribution; and no greater right could afterwards be conveyed by them to the plaintiffs.
(2.) The Woodruff & Beach Iron Works had no cause of action against the defendant when they assigned to Woodruff & Beach. No judgment had been recovered against the Company, and when judgment was subsequently recovered by Woodruff & Beach, and the right to sue the stockholders was thereby perfected, it was only a right to sue for a contribution. No other right passed by the assignment to plaintiffs.
5. Woodruff & Beach, and the Woodruff & Beach Iron Works, were, in fact, the same parties. The evidence shows that they used their firm name and their corporate name to suit their convenience. The assignment of the notes to the firm was evidently because the firm were the real parties interested in the transaction, and the assignment of the judgment by the firm to the corporation was a mere contrivance to evade the difficulty which stood in the way of a suit by the firm against their co-stockholders.
II. There was sufficient evidence to go to the jury upon the questions whether the plaintiffs, or Abernethy and Bliss, the trustees of the. Company,' were the real parties in this action, and whether or not there had been a settlement, through the trustees of the plaintiffs’ claim. The Judge erred in directing the jury to find for the plaintiffs. The judgment should be reversed, and a new trial ordered.
William M. Evarts, for respondents (the plaintiffs).
I. The ruling of the Judge at the trial that there was no evidence to go to the jury, in support of the defense of payment of the plaintiffs’ claim by the trustees of the Stone Dressing Company and of the prosecution of this action for their benefit, was correct.
1. The Manufacturing Corporations Act makes the trustees liable for the debts of the Company, to its creditors, in a variety of cases. But, in all these cases, the trustees are but sureties for the Company, the primary debtor; and, if charged, will have recourse against the Company for their indemnity.
So the creditor has, by the statute, the direct liability of the stockholders upon the indebtedness of the Company, while the capital remains unpaid. This liability of the stockholders is not as sureties, but as partners; the immunity of mere corporate liability not being granted to the stockholders while the capital remains incomplete.
When, therefore, the trustees are chargeable as sureties, under the statute, to a creditor, who has the double recourse against the corporation and the stockholders, on payment of such a debt, the trustees would be subrogated to the same double recourse.
The provision of security to the creditor by a surety, in whatever form, cannot defeat the creditor’s right against the principal debtor.
Nothing beyond this was intimated in any evidence in the case, much less proved. (See the Act, Laws 1848, p. 54, §§ 10, 12, 13, 23; Bailey v. Bancker, 3 Hill, 188; Corning v. McCullough, 1 Comst., 47.)
2. The evidence given was illegal, being parol evidence of a contract which was in writing, and accessible as evidence.
The refusal of the Judge to submit this evidence to the jury was correct, in this point of view.
II. The only ground of nonsuit, requiring any consideration, is the fourth proposition of the defendant’s counsel on that motion.
1. The circumstance that the plaintiffs—being the original creditor of the corporation, and having the liability of the various defendants (according to the statute) upon its debt—assigned the claim against the corporation to an assignee, who recovered judgment against the corporation, and then reassigned the debt, judgment and all rights pertaining thereto to the plaintiffs, is wholly immaterial.
The objections to one stockholder suing another upon a debt of the corporation, and the rule which limits his remedy to an action for contribution, proceed upon the ground that the plaintiff, in such a suit, is under the same measure of liability as the defendant. This reasoning has no application to the present action.
2. The judgment recovered, and remedy thereon exhausted, against the corporation,, make the condition precedent of the statute to the prosecution of an action against the stockholder. The statute in no manner requires that the remedy against the stockholder must be prosecuted by the plaintiff in the judgment against the corporation.
The judgment and the remedies which adhere to it are assignable like any other rights of action. (Incorporations Act, §§ 10, 24; Bailey v. Bancker, ut supra.)
HI. The defendant’s exception to the exclusion of evidence is untenable, the evidence offered being plainly irrelevant and immaterial.
IV. The additional ground of nonsuit insisted upon in the action against Simeon B. Chittenden, and in that against William H. Pomeroy, is unsupported by the facts in either of those actions. The relation of stockholder was abundantly proved. (Incorporations Act, § 25.) The judgment for plaintiff in each case should be affirmed with costs.

Opinion:
By the Court—Bosworth, Ch. J.
It appears clearly, from evidence which the Judge at the trial held to be competent, that the amount which the plaintiffs may recover in this action, is to be paid by them to Bliss and Abernethy.
Or, to state the fact with more precise accuracy, Abernethy gave his note to the plaintiffs for $12,500, and Bliss for $10,000, which notes have been paid. These notes were given and paid upon an agreement that the " trustees " of the Hudson River Stone Dressing Company should not be further proceeded against in the suits brought against them by these plaintiffs, until their suits against the stockholders of said Company were decided, and so much in amount of the sums which Abernethy and Bliss had so paid, should be refunded, as the, plaintiffs should recover in such actions against the stockholders.
These facts make Abernethy and Bliss interested in the event of this action, but not the actual parties in interest, as they have no right to the money which may be collected of. such stockholders, have no right to control the actions against them, and would not be liable to the stockholders for their costs of such actions, if they should succeed in- their defense.
Such facts are not a bar to the present action. The notes, advanced by Abernethy and Bliss, were not advanced or taken as a satisfaction of the suits • against them as trustees, (these suits are still'pending,) nor as a payment - of 'the claim which is the basis of this action, but as collateral security.
The liabilities of the stockholders of the Hudson River Stone Dressing Company, are very different from those of the Rossie Galena Company. The latter are severally and jointly and personally liable for all debts and demands contracted by the Company. (1 Comst., 47.) The former are severally liable to the creditors .of the Company, to an amount equal to the amount of the stock they respectively hold, until the event happens, which, by section 10 of the act of 1848, chapter 40, terminates such liability. (Laws of 1848, p. 56.)
If one stockholder of the Rossie Galena Company could sue another to recover a debt owing by the Company, and collect it, the latter would, it is contended, by such recovery and payment, become a creditor of the Company for the amount of such debt, and as such creditor might sue the plaintiff as such stockholder, and recover, it back, which would be absurd. In other words, such a debt is as absolutely the debt of each stockholder as of either,- and for its whole amount.
tinder the act of 1848, chapter 40, H. A. Chittenden is liable to pay $800 of the plaintiff's .demand, and no more.
Assuming that Woodruff .& Beach owned stock to. the same amount, the defendant, on paying that sum in satisfaction of the recovery against him, might possibly have as much right as a creditor of the Company ,by reason of such. recovery and payment, to.recover the same sum of them, as one stockholder of the Rossie Galena Company, by reason of a recovery against and payment by himself, would. to recover, a like sum of any other stockholder of such Company; still we do .not- concede that this proposition is tenable.
But if Beach'& Woodruff owned stock to a less amount than $800, the defendant could, at most, recover only a sum equal to the amount of the stock which they held. And if it should he made to appear that Woodruff & Beach had been compelled to pay to other creditors of the Company, in satisfaction of just demands of such creditors against the Company, a sum equal to the amount of their stock, that fact would be a defense to any such action.
The case of stockholders of the Rossie. Galena Company is fundamentally different. They are jointly and severally and absolutely liable to creditors of the Company for all the debts of the Company, and are liable as, and on the ground that, interse, they are partners. That liability cannot be .extinguished, except by actual payment or satisfaction of such debts.
In the present case, each stockholder is liable, as such, to only the amount of his stock. When he has been compelled to pay that sum to any creditor, his liability as mere stockholder is at an end. He cannot recover any portion of such sum from any other stockholder who, before suit brought against him, has been eompelled-topay to creditors the amount of his own stock.
The mere fact, therefore, that one stockholder is suing another to recover, in whole or in part, a debt due from the Company, is not,"yie?' se, either at law or in equity,.a bar to the action.
In the present case, it was proved that Woodruff & Beach were stockholders when the debt in question was contracted, and continued such down to the trial of this action. But how much stock they held was not attempted to be shown; nor is- it alleged in the defendant's answer 4hat they were stockholders.
It must, perhaps, be presumed that they severally owned at least one share. I know of no principle on which it can be said that the law presumes they owned more.
The mere fact that they were stockholders, without reference to the amount they held, was relied on as being of itself a sufficient ground for a nonsuit. It was not attempted to be used as the ground of a partial defense, but was relied upon as a flat bar.
Hence, when the plaintiffs rested, the • defendant moved for a nonsuit on that ground. When the testimony was closed, a dismissal of the complaint was asked on the same ground.
The defendant's position on the present appeal, (point I, sub. 2,) is, that " the stockholders were not liable as sureties for the Company, but as principals and copartners."
They are not liable as copartners; neither are they liable as principals to any particular creditor in any such sense, that a compulsory payment to one to the amount of their stock, will not be a perfect defense to a suit subsequently brought by every other.
If, therefore, this suit had been brought by Woodruff & Beach the fact that they were, from the outset, stockholders, would not of itself be a bar to the action. Whether, if it had been shown that they owned stock to an amount equal to, or greater than that held by the defendant, such fact would be a bar, is a question that does not arise in this case.
Simonson v. Spencer et al., (15 Wend., 548,) more closely resembles this case, than any one arising upon the Rossie Galena Company's act
By the act incorporating The Harlem Canal Company, the stockholders, were jointly and severally liable for the debts of the Company, to the nominal amount of the stock held by them. (Session Laws of 1826, pp. 369 and 371, § 9; 14 Wend., 20.) In Simonson v. Spencer, supra, (15 id., 549,) the Court said, " these parties do not stand in the relation of partners to each other; and the fact of their being all stockholders cannot present any valid objection to this suit" " The statute creating the Harlpm Canal Company does not imply that the equities" between the parties are to be considered, and the language is, 'and any person having any demand against the said Company may sue any stockholder singly, or any two or more .stockholders jointly, and recover in any Court having cognizance thereof.' There is nothing here implying a liability in the other stockholders to contribution; there is no difficulty as to proper parties." The head note to Bailey & Storm v. Bancker, (3 Hill, 188,) states that "certain dicta" in the case of Simonson v. Spencer, were overruled.
In Bailey v. Bancker, the Court assumed, that Chief Justice Savage, was in error as to the facts of the case of Simonson v. Spencer, when he, substantially, asserted that all the parties were stockholders. No notice is taken by Judge Bronson of the fact, that the two statutes are entirely different. It is in the recollection of one of us, that Simonson v. Spencer was not cited on the argument of Bailey v. Bancker, but a reference to that case was handed to the Court after the argument was concluded. Simonson v. Spencer was not discussed by counsel, nor was the difference between that act and the Rossie Galena Company's act commented upon.
We think, therefore, that when Chief Justice SAVAGE, in Simonson v. Spencer, (15 Wend., 549,) states: " These parties do not stand in the relation of partners to each other; and the fact of their being all stockholders cannot present any valid objection to this suit," we may regard him as asserting as a fact in the case, that all the parties to that action were stockholders. And when the radical difference between the two acts is considered, we may regard whatever disapprobation was expressed of that case in Bailey & Storm v. Bancker, as obiter dicta.
' But the present action is not brought by a stockholder. The present plaintiffs are not liable as stockholders to any creditor of the Hudson River Stone Dressing Company.
The only defense, based on the fact that their assignors of the cause of action sued on were stockholders, is, that such assignors could not maintain an action like the present because they were stockholders, and therefore their assignees, the present plaintiffs, cannot. But we have seen that such fact is not of itself, and alone, a bar to such an action by the plaintiffs' assignors.
That was the only point made, based on this fact, either on the motion to nonsuit, or to dismiss the complaint.
In any view of the case, the most that the defendants could have claimed, had. this suit been brought by Woodruff & Beach, was, that the recovery should be limited to the excess of the amount of the defendant's stock over the amount of that held by Woodruff & Beach. But no such position was taken at the trial, nor are facts stated in the answer to which such a rule, .even if sound, could be applied. The position was that Wood-ruff & Beach, while they owned the cause of action in question, could not have maintained a suit against the defendant, and therefore, as it is argued, their assignees cannot.
We have already expressed the conclusion that this position is untenable.
It follows, that a nonsuit was properly denied, as was also the motion to dismiss the complaint.
To the instruction, that the plaintiffs were entitled to recover of the defendant to the amount claimed, (viz., the amount of the stock held by the defendant,) with interest, the defendant also excepted. The jury found a verdict for $898. The defendant held but eight shares of stock, instead of thirty-three shares as stated in the complaint. The $98 was the interest on $800 from the time of suit brought to the time of the trial. The parties agreed upon the amount of the interest.
The instruction to find a verdict for this sum was erroneous, if the recovery should have been reduced on the presumption, that Woodruff & Beach held severally, even one share of the stock, while the cause of action belonged to them.
We think no such deduction should have been made in this action even on that ground, and on that assumption of fact.
At the time of the trial the defendant had no demand against or debt owing to him by the Company. There was, therefore, no liability of Woodruff & Beach as stockholders for any such debt to be set off.
He was not a creditor of the Company, either at law or in equity, by reason of the cause of action in question, and could not become one, except by paying, in whole or in part, the debt in question.
A deduction from the recovery that has been had, of a sum equal to the amount of the stock held by Woodruff & Beach, would not exempt Woodruff & Beach from an action by an actual creditor of the Company to recover of them the amount so deducted.
And we do not accede to the proposition, that under the statute in question, a stockholder who has been compelled, as such, to pay debts owing by the Company to the amount of his stock, can maintain an action at law by reason thereof, against other stockholders, to reclaim the whole or any part of the money so paid.
Whether those who have been compelled to pay can, in equity, coerce a contribution from those who have not been so compelled, in an action to which all the stockholders are parties, is a question that does not arise on the present appeal.
We think none of the defendant's exceptions are well taken. Evidence was admitted against the plaintiffs' objection, which may have been incompetent.
But the defendant had the benefit of it, and the plaintiffs are not the appellants.
The judgment in this action, and in that of the same plaintiffs in the four other suits against other defendants, argued at the same time, must be affirmed with costs.
Judgment accordingly.