Court Opinion

ID: 6513601
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:24:34.96276+00
Date Added: 2024-06-11T15:54:57.360608
License: Public Domain

SOMERVILLE, J. —
This case is analogous, in its leading facts, to Glenn v. Semple, 80 Ala. 159; s. c., 60 Amer Rep. 92. Its merits may be disposed of by a few propositions abundantly supported by authorities precisely in point.
1. The decree of the Chancery Court of the City of Richmond, rendered on the fourteenth day of December, 1880, on a creditors’bill previously filed in December, 1871, against the National Express and Transportation Company and the trustees of that corporation, is not only admissible as evidence in this case against the defendants, as stockholders in said company, but is entitled to as full faith and credit in the courts of this State, as it would be in the courts of Virginia, where the corporation was located and had its principal office, and where the decree was rendered. If the court had jurisdiction of the subject-matter and of the parties, and the stockholders are to be regarded as parties to that suit for any purpose, this is the necessary legal effect of the decree under the Constitution and laws of the United States. *626Christmas v. Russell, 5 Wall. 291; Maxwell v. Stewart, 22 Ib. 77.
2. The record in that case, which is made a part of the record before us, shows sufficiently that the court acquired jurisdiction of the corporation itself, by service of process on the proper officers. This service was on two of the directors, one of whom appeared and answered; and also on the cashier of the company, who also appeared and answered. The Virginia court decided, that this service was sufficient to give jurisdiction; and that decision is binding on us. It can not be collaterally attacked. If erroneous, it should have been corrected on direct appeal. The precise point was so decided in Glenn v. Springs (U. S. Cir. Ct.), 26 Fed. Rep. 494; and again in Glenn v. Williams, 60 Md. 93.
3. The same cases also hold, that the decree rendered against the corporation in that case, was conclusive against the stockholders, so far as it affects the condition and status of the corporate property, although they were not personally made parties to the proceeding by service of process on them. The rule in cases of this nature is, that the interest of the stockholder is represented by the presence of the corporation, for all the purposes of that suit. It was said in Glenn v. Williams, supra: “When the court obtained jurisdiction of the corporation, every stockholder, in his coi'porate capacity, was a party to the cause, and was supposed to be represented by the president and the directors, who were intrusted with the management of the corporate interest of all the stockholders.” It was observed, further, that the stockholders being distributed among the several States, many of them being non-residents of Virginia, ordixiary process of the courts of that State could not reach them; and if the court were required to make them parties personally, the creditors of the corporation would be without adequate remedy. The unpaid subscriptions of stock are assets of the corporation, being a trust fund for the payment of its debts-; and “as against a creditor, with an established debt against the corporation, by judgment or decree, the stockholder has no right to withhold the funds of the company, upon the ground that he was not individually a party to the proceedings in which the recovery was obtained.” —Glenn v. Williams, 60 Md. 116; Hawkins v. Glenn, 131 U. S. 319; Sanger v. Upton, 91 U. S. 56; Great Western Tel. Co. v. Gray, 122 Ill. 630; s. c., Amer. Law Reg., vol. 27, p. 160, and note 168; Vanderwerker v. Glenn (Sup. Ct. Va.), S. E. Rep. 806.
*6274. The decree of the Bichmond court also conclusively-determined the following points: First, that there was no laches on the part of the corporation, or its trustees, in the prosecution of that suit, or in obtaining the decree, which, as we have stated, was rendered on December 14th, 1880; Secondly, that the statute of limitations did not bar the claims of creditors up to that time; Thirdly, the authority of the court to make the call or assessment upon all who were stockholders in the company; Fourthly, the legal identity of the National Express Company, to which the subscriptions were originally made payable, and of the National Express & Transportation Company, to which its corporate name was changed; Fifthly, the right of the trustee, Glenn, to bring this suit.—Glenn v. Springs, 26 Fed. Rep. 494; Glenn v. Soule, 22 Fed. Rep. 417; Glenn v. Williams, 60 Md. 93; Sanger v. Upton, 91 U. S. 56; Hall v. U. S. Ins. Co., 5 Gill, 484; Glenn v. Semple, 80 Ala. 159; s. c., 60 Amer. Rep. 92; German Passenger Railway Co. v. Fitler, 60 Penn. St. 124; s. c., 100 Amer. Dec. 546; note, p. 552; Hawkins v. Glenn, 131 U. S. 319.
5. The books of the corporation were admissible, as prima facie evidence of the correctness of the subscriptions, as to all whose names there appear as owners of stock, especially in view of the fact that the defendants in this case interpose no plea denying the genuineness of their original subscription, and are shown to have paid one assessment made on their stock by decree of the court in 1880, which was an admission by them of their stalus as stockholders. There is no presumption that these names have been fraudulently .inserted on the corporate books by an act of forgery. Turnbull v. Payson, 95 U. S. 418; Glenn v. Orr, 96 N. C. 413; Glenn v. Springs, supra; Railroad v. Applegate, 21 West Va. 172; Vanderwerker v. Glenn (Sup. Ct. Va., 1888), S. E. R. 106; Cook on Stockholders, § 73; 1 Morawetz Corp. (2d Ed.), § 75.
6. That the demand here sued for was not barred by the statute of limitations, is conclusively settled in Glenn v. Semple, 80 Ala. 159; s. c., 60 Amer. Rep. 92. See, also, Wait on Insolvent Corp., § 631. We there held, that the statute did not commence to run in favor of stockholders until December 14th, 1880, when the Bichmond Chancery Court ordered the assessment of unpaid stock subscription sued for in that action. The assessment here sued for was made#on March 26th, 1886; and the suit was brought in November 19th of the same year.
*628The questions here involved have a great many times come before the courts of this country for decision, and there has been a singular unanimity among them in the conclusions reached, all being in harmony with the views above announced. This is shown by the various cases above cited, in which the present appellee, Glenn, was party plaintiff.
The other assignments of error are not well taken, and the judgment of the Circuit Court is affirmed.