Court Opinion

ID: 8002450
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:50:25.814525+00
Date Added: 2024-06-11T16:35:46.015598
License: Public Domain

Eagg, Judge,
delivered the opinion of the court.
This suit was instituted, in the St. Louis Court of Common Pleas, against Charles Blattau, Erancis Beehler, John Rugg, and Henry Prante. The defendants were sued, as directors of the Missouri Spinning Company, to recover the amount of several judgments which had been rendered in favor of the plaintiffs against the corporation, and which they were unable to collect by legal process.
The alleged liability of defendants rests upon the provisions of section 20, article I, of the act concerning corporations (R. C_. *461855, p. 374). One of the plaintiffs was a stockholder in the company, and the decision of this case turns exclusively upon the construction of the statute referred to. The section is as follows:
“ The whole amount of the debts of any corporation hereafter created, except banking companies, shall not exceed the amount of its capital stock actually paid in ; and in case of any excess, the directors under whose administration it shall happen shall be jointly and severally liable to the extent of such excess for all the debts of the company then existing, and for all that shall be contracted so long as they shall respectively continue in office, and until the debt shall be reduced to the said amount of the capital stock.”
A proviso is added, exempting such of the directors as might be absent at the time of contracting the debt, or who had objected to the same and afterward given notice to the stockholders as required by the act. In this case it was shown that the debts created by the corporation exceeded the amount of its capital stock actually paid in, by a sum much larger than that claimed to be due the plaintiffs. There was no attempt to prove that the defendants, or either of them, were embraced in the exceptions of the proviso. The court thereupon instructed the jury at the trial that if they believed “ from the evidence that the plaintiff Watson was a stockholder of the Missouri Spinning Company, and that he was such stockholder at the time that the liability of the said company to said plaintiffs was contracted, the plaintiffs are not entitled to recover.” The plaintiffs submitted to a non-suit, and, after an unsuccessful motion to set it aside, bring the case here by writ of error. No notice seems to have been given of the suing out of the writ of error; and as the appearance of only one of the defendants in error, Charles F. Blattau, has been entered, the writ must be dismissed as to the remainder.
The case of Kritzer v. Woodson, 19 Mo. 327, is relied upon to sustain the action of the court below in giving the instruction as above stated. That was a case where a stockholder in a corporate company sued the directors to recover back an amount which he had been compelled to pay to the creditors of the company. The law made him liable to the extent of double the *47amount of stock in the company. Its entire assets having been exhausted, He was compelled to pay the creditor of the company the amount which he sought to recover in that suit, upon the ground that the debts of the corporation had been suffered to accumulate to an amount in excess of the capital stock actually paid in. But the court said this statute was given for the protection of creditors, and not the individual members of tbe company. It is true that for any improper management of tbe affairs of tbe company, by wbicb a liability might be incurred on tbe part of .the directors to tbe individual members, an action could be maintained against them. Such liability, however, exists independent of this statute. It is clear that tbe point decided in that case was that tbe statute was intended for tbe protection of such parties as really held debts against tbe company.
Tbe stockholder, by discharging an obligation wbicb tbe law imposed upon him, could not make himself tbe creditor of tbe corporation. His claim was in no sense a debt due by tbe company, and hence it was not covered by tbe provisions of a statute made for a different purpose altogether. This seems to have been a debt contracted by tbe company in tbe prosecution of its business, and tbe liability of tbe defendants cannot be affected by tbe fact that one of tbe plaintiffs was a stockholder, Certainly tbe interests of bis co-partner ought not to suffer on account of bis relation to tbe corporation. Tbe obligation differs in no essential particular from any other incurred by tbe company; and if it was due and owing to tbe stockholder alone, we can see no good reason for depriving him of tbe protection intended to be given to all creditors alike.
Tbe instruction was improperly given,‘and tbe judgment must be reversed. The other judges concurring, tbe judgment of tbe Court of Common Pleas is reversed, and tbe cause remanded to tbe Circuit Court of St. Louis county for further trial in accordance with this opinion.