Court Opinion

ID: 3988340
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:44:23.741793+00
Date Added: 2024-06-11T14:22:24.643893
License: Public Domain

I concur in the result. Plaintiff relied on the decree in the case of Utah Standard Mining Company v. Tintic Indian Chief Mining  Milling Company as evidence that defendants had paid nothing for their stock in the Utah Standard Mining Company. A judgment against the corporation is conclusive upon stockholders as to the existence of the liability of the corporation, the amount of its liability, and the validity of the claim against the corporation. But a stockholder is not concluded by the judgment against the corporation in a proceeding to which he was not a party, as to questions affecting his individual liability to pay the claim against the corporation. 14 C.J. 1068, § 1662. A judgment binds and is admissible against the parties to the suit in which it is rendered and their privies, but it may not be introduced to establish the facts upon which it is based as against third parties. 10 R.L.C. 1116.
The judgment relied on by plaintiff cannot be used as evidence to preclude the stockholders, sought to be charged with the payment of the corporate debt, from disputing the fact upon which the judgment rests, namely that the corporation received nothing from the stockholders for the stock issued to them. That fact was put in issue by the answer herein, and the defendant stockholders are entitled to litigate that question as to them before they are concluded on that issue. The judgment for nonsuit was properly granted.