Court Opinion

ID: 6412396
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:53:40.731628+00
Date Added: 2024-06-11T15:51:24.929083
License: Public Domain

Dewey, J.
1. The form of this process, and the averments in the declaration, are sufficient to authorize the ordinary judgment against the corporation, and a levy upon the stockholders upon whom service was made, if, in other respects, they are chargeable. Holyoke Bank v. Goodman Paper Manuf. Co. 9 Cush. 576. Farnum v. Ballard Vale Machine Shop, 12 Cush. 507. Richmond v. Willis, 13 Giay, 182.
*2182. The fact that proceedings in insolvency had been instituted, and that subsequently the plaintiff had proved his claim and received a dividend thereon, will not operate to prevent a recovery in the present action for the balance unpaid. Morse v. Reed, 13 Met. 62. Barker v. Haskell, 9 Cush. 218. Coburn v. Papier Maché Manuf. Co. 10 Gray, 243.
3. The filing of a bill in equity, after the institution of the present suit, by another creditor of the corporation against the directors and stockholders of the corporation for personal liabil ities alleged to have accrued under the provisions of the statutes regulating manufacturing corporations, although it purports to be for the benefit of all creditors who may elect to become parties, will not defeat a recovery in the present action against the corporation, or affect the right to levy upon the stockholders who are by statute made thus chargeable in an action at law instituted in the present form. The liability of the directors, under the Rev. Sts. c. 38, § 25, is a liability entirely distinct from that of the stockholders under § 22.*
4. This corporation is to be classed with manufacturing corporations, and is by the terms of its charter made subject to the liabilities set forth in c. 38, as well as in c. 44, of the Rev. Sts. It was incorporated by St. 1838, c. 149, “ for the purpose of carrying on the business of bleaching, callendering, printing, dyeing and finishing silk, cotton and linen goods.” The addition al act of 1848, c. Ill, only increased the capital and changed its name. Its actual business was that of bleaching goods after they came from the mills. We have no doubt that this corporation has attached to it the liabilities of a manufacturing corporation, as respects those who are stockholders.
5. The corporation, the principal defendants in the action, having admitted the due execution of the note by their authorized agent, the indebtedness of the corporation could not be further questioned by one of their stockholders summoned as such merely. Holyoke Bank v. Goodman Paper Manuf. Co. 9 Cush. 576. Any question upon this point is only open by consent of *219both parties. We perceive, however, no objection to the sufficiency of the evidence to establish the indebtedness of the corporation, and this objection was not urged at the argument.
6. The further inquiry is as to the liability of particular individuals to be charged as stockholders of this corporation, upon any execution which may issue upon a judgment rendered in favor of the plaintiff against such corporation.
In the case of Moses French, the facts are these: He became a stockholder in 1853, and continued such until October 19th 1857; and the plaintiff seeks to charge him upon a note of the corporation dated June 22d 1857, payable in four months from date. He was, therefore, a member when the debt was contracted, and until the same had nearly arrived at maturity. All who are members of any manufacturing corporation, incorporated subsequently to the Rev. Sts., being such when the debt was contracted, are subject to the conditional liability imposed upon stockholders for the debts of the corporation. Such has been the doctrine of this court, as,long held and apparently sanctioned fully by the cases of Hovey v. Mill Dam Foundry, 21 Pick. 453, and Holyoke Bank v. Burnham, 11 Cush. 183. The result must be therefore that French is chargeable as a stock holder liable to the present creditor.
In the case of Ephraim Buttrick, summoned as a stockholder, it being conceded that, prior to the date of the note held by the plaintiff, Buttrick held stock in the corporation, it was proposed to show in his defence that he received the same as collateral security for a debt due from the person transferring it to him, and that prior to the date of the note, the debt having been paid, he signed a transfer in blank on the back of the certificate, and delivered it to his debtor, but nothing further was done to re-transfer the stock. The form of the transfer to Buttrick was absolute, and not in conformity with the provisions of St. 1838, c. 98, § 3, as to shares transferred as collateral security. That a person holding stock in a manufacturing corporation by such absolute certificate is liable for the debts of the company, under Rev. Sts. c. 38, § 16, was held by this court in the case of Holyoke Bank v. Burnham, supra ; and that a delivery of a certificate oí *220stock in a manufacturing corporation, indorsed with a printed transfer, signed, but not filled up, passes no title in the shares, was decided by the case of Boyd v. Rockport Steam Cotton Mills, 7 Gray, 406. The latter case seems directly in point on the question of the validity of the retransfer by Buttrick. Upon the facts, it seems to be clear that Buttrick must be held liable as a stockholder. Without expressing any opinion upon the necessity of recording transfers of stock in manufacturing corporations on the books of such corporation, to vest a valid title in the purchaser, the court have no doubt that there must be a full transfer of the shares to some third party, executed by the holder of the shares ; and this had not been done in the presen! case by Buttrick.
Tileston and Hollingsworth were summoned as stockholders, describing them in the writ, after a recital of their individual names, as “ copartners under the name of Tileston & Hollingsworth.” It would seem from the bill of exceptions, that by the stock books of the company these persons were to some extent owners of stock as copartners. But upon the case as found by the jury, the stock they had owned as partners had been in fact divided between them, and the jury found that Tileston owned stock as an individual, and Hollingsworth owned stock as an individual; and the court ruled that they were not entitled to a supersedeas, as asked for by them. It appears that each had been duly served with a summons, alleging him to be a stockholder, and each was before the court; and it is further stated in the bill of exceptions that “ the proper amendments were made, or considered made, without objection.” In the opinion of the court, the objection to the form of charging them may properly be deemed to be obviated by the amendment considered to be made. Such amendment would have been competent and proper.
As to the other persons defending against the charge of being stockholders, the objections urged have been disposed of in the former portions of this opinion. Exceptions overruled.

 See Cambridge Water Works v. Somerville Dyeing & Bleaching Co. 14 Gray, 193, and 4 Allen, 239.