Court Opinion

ID: 6410608
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:52:24.664603+00
Date Added: 2024-06-11T15:51:21.645666
License: Public Domain

Thomas, J.
Under the provisions of the statutes of this commonwealth, the members of manufacturing companies, incorporated since the 23d of February 1830, are, in certain contingencies, made jointly and severally liable for the debts and contracts made by such companies. And the question of law raised by the demurrer is, whether a creditor of a corporation, who is also a stockholder individually liable ‘for its debts, can attach on mesne process or levy his execution upon the property of other members of the corporation, also liable for its debts ; or whether his sole remedy against such other members of the company is by bill in equity for contribution. It is a difficult question, but may be, we think, satisfactorily answered.
That the individual stockholders are liable for the debts of the company must be taken for granted in the discussion. The Rev. Sts. c. 38, § 30, provide that when the stockholders of any manufacturing company shall be liable, by the provisions of this chapter, to pay the debts of the company, or any part thereof, their persons or property may be taken therefor on any writ of attachment or execution issued against the company for such debt, in the same manner as on writs and executions issued against them for their individual debts. Section 31 gives to the creditor a remedy by bill in equity in this court. Section 32 provides that any stockholder who shall, whether voluntarily or by compulsion, pay any debt of the company, for which he is made liable by the provisions of this chapter, may recover the amount so paid in an action of the case against the company, in which action the property of the company only shall be liable to be taken, and not the person or property of any stockholder of the company; or the person who shall have so paid such debt of the company may have a bill in equity in this court, for contribution, against any one or more of the stockholders who were originally liable with him for the payment of the said debts, and may recover against each of them their just and equitable pro* portion thereof.
*79The St. of 1851, c. 315, provides, in substance, 1. That the property of a stockholder shall not be taken upon any execution against the corporation, unless a summons in the action is left with such stockholder; 2. That a stockholder so summoned may come in, take issue on his liability, and, if it shall appear he is not liable for the debt, judgment shall be entered for him on the issue joined, in which case the execution shall have annexed thereto a supersedeas as to that stockholder.
The nominal plaintiff is not a member of the company ; but, under the facts stated in the answer, and admitted in the demurrer, he can have no other or greater rights than Baker, the promisee of the notes. The statutes make plain provisions for persons who are creditors of the corporation, and for stockholders who, voluntarily or by compulsion, pay the debts of the company. In this case, Baker, the real plaintiff, is a creditor to whom a debt is due from the company, and he is at the same time a stockholder liable for the debt. He is not within the letter of the Rev. Sts. c. 38, § 32 ; he has not voluntarily or by compulsion paid a debt of the company for which he was made liable by the provisions of that chapter. He is not within the fair scope and spirit of § 30 ; he is not one having a debt against the company, which, as respects him and to him, the other stockholders are jointly and severally liable to pay. The ultimate liability of the other stockholders to him is only to pay their proportionate part of the debt.
1. The statute, while it gives the most efficient remedies to third parties, leaves the stockholders upon an equal footing. The legislature could not intend, we think, that a stockholder who voluntarily becomes the creditor of the company, by loan or otherwise, should stand on better ground than one whose property has been taken to pay the debt of the company, or who pays the debt to prevent his property being taken. There seems to be no good reason for such distinction.
2, The real plaintiff is a creditor of the corporation. He has his action against the corporation. He may attach or levy upon the corporate property. As against the corporation, he has the same rights, and the same power to enforce them, as a creditor *80who is not a stockholder. See Pierce v. Partridge, 3 Met. 44 But proceeding one step further, passing from the corporation as a legal person to the individuals that compose it, the difference between the creditor who is not a stockholder, and the creditor who is, becomes manifest. To the creditor who is not a stockholder, each of the stockholders is not only jointly with the others, but severally liable for the debt, and for the entire debt. To a creditor who is also a stockholder, each of the other stockholders is not severally liable, and for the entire debt, but only for his proportionate part thereof. The creditor therefore who is not a stockholder may, from any stockholder liable, get his whole debt. If he is a creditor and also a stockholder, he may have contribution ; he may have all the stockholder is bound to pay him, and no more.
3. But, upon the construction of the statute claimed by the plaintiff, he may collect from one stockholder, not only all that such stockholder is bound ultimately to pay, but all that the entire body of stockholders, including the plaintiff, is bound to pay. He may collect wdth his right hand what he must restore with his left. Take a plain case: The corporation owes to A a debt of a thousand dollars ; A and B áre the only stockholders liable for the payment of the debt; A sues the corporation, and levies his execution upon the property of B; B brings his bill in equity against A, and compels him to pay back, by way of contribution, five hundred dollars. It is but the momentary shifting of the burden which both must bear.
We think the fair construction of the statutes leads to no such result. But while the plaintiff has, against the corporation, the power to sue at law, and enforce his claim against the property of the company, his remedy, as against the other stockholders, is for contribution. And if his case is not within the Rev. Sts. c. 38, § 32, it is within the provision of c. 81, § 8, giving this court jurisdiction in equity in all suits for contribution by or between any persons who are respectively liable for the same debt or demand, where there is more than one person liable at the same time for contribution.
The question of the liability of the respondents as officers oí *81the corporation is not and could not be raised upon this record. There is no provision in the Rev. Sts. c. 38, or the Si. of 1851, c. 315, for summoning in officers in a suit against the corporation, and testing their liability in that form.

Plaintiff's demurrer overruled.