Court Opinion

ID: 6631839
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:37:54.565521+00
Date Added: 2024-06-11T15:58:58.025758
License: Public Domain

Campbell J.

dissenting:

Two questions arise in this case: First, Whether a stockholder in a Mining Company, organized under the law of 1853, is liable to an action for calls upon shares; and, Second, Whether he is liable for any deficiency which may remain after the Company has sold his shares on such calls.
No question can arise here upon any liability which a person may voluntarily take upon himself by a promise contained in a separate subscription. Here there is no subscription, properly so called, at all. The articles of association contain no promises, and are merely a statement of the distribution of shares. If there is any liability to an action, it lies against all stockholders as such, and the subscription has nothing to do with it. With the exception of the cases to which I wifi refer presently, the authorities universally maintain thát no action lies upon the mere relationship of stockholder in any case; that in order to maintain such an action there must be either an express promise, or an express right of action given in terms by the charter or general law; and that a subscription whereby one agrees to take stock, without' any further promise, creates no right of action, but places the subscriber on the footing of a mere stockholder by assignment or otherwise. Every case (with the exception referred to) which has allowed an action, has allowed it on those conditions only, and all others have been repudiated. The decisions establishing this doctrine have been repeatedly made in Massachusetts, Maine, New Hampshire, Vermont, New York, Pennsylvania, Alabama, and in detached cases elsewhere.
In England no suit has ever been maintained on any other principles. The English charters are always express, *302where any action is allowed. And it would he very difficult to create an ambiguity under the very carefully drawn statutes of that country. No case can be found there where any implied assumpsit has been maintained by a Company for stock assessments. And the only case reported in which any similar question has arisen is Walker vs. Bartlett, 33 Eng. L. & Eq. 261, where a person had sold to another stock, on which, by the law, an action lay for calls, and was ' sued and compelled to pay certain calls made after the assignment, because his vendee did not register the transfer, but left the stock standing in the vendor’s name. The vendor brought an action against his vendee to recover the money he had thus been compelled to pay, and was non-suited, on the ground that the law would raise no implied promise out of the transaction. The question being raised before the full bench, the non-suit was made absolute. The principle of that case goes certainly quite as far as any which denies the implied liability to the Company.
And here the very Act and section which give the directors of the Company power to make calls, provide for a method of enforcing them by sale. The case is not one calling for the devising of a remedy to perfect and enforce the right. All the arguments which would go to infer a remedy by action, from the failure of justice for the want of a remedy, lose their validity when a remedy is provided. The cases cited in Fort Miller & Fort Edward Pl. R. Co. vs. Payne, 17 Barb. 567, embrace a very full body of decisions on these points. That case itself is of value, as classifying them.
The cases of Instone vs. Frankfort Bridge Co. 2 Bibb, 576, and Hartford & New Haven R. R. Co. vs. Kennedy, 12 Conn. 499, are the only ones which have decided that a general liability arises out of the relationship of a stockholder, where the question has directly arisen. In the other authorities'„there has been an express liability. The case of the Dexter & Mason Pl. R. Co. vs. Millerd, 3 Mich. 91, I *303shall refer to presently. In the case in 2 Bibb, there are no authorities referred to, and the reasoning is very brief. The case in 12 Conn. does not purport to be based upon authority, but overrules every case on the subject. And the reasoning of that case appears to me exceedingly sophistical. It undertakes to establish the right to a common law action, in the absence of any remedy by sale — which might very well be sustained if there were no other femedy — and then assumes, without argument or authority, that the fact' that the law gives an express remedy can make no difference in the right to imply another. Yet the absence of any other is the only sustainable basis of an .implied common law action at all. And, after all, it finally basis the right of action in the particular case upon the construction of the charter in question. And it not only confines the right of action to subscriptions, but expressly declines applying the principles beyond the facts reported. (See the last paragraph of the report.) In view of the numerous and well reasoned decisions on this subject in the other States whose courts do not pretend to base their decisions upon the imaginary grounds suggested for them by the Supreme Court of Connecticut, I am constrained to say that this decision is,'in my judgment, entitled to very little respect.
Our own Court, in Dexter & Mason Pl. R. Co. vs. Millerd, confines its decision to a subscriber under the peculiar wording of the charter. The language of the charter authorizing the directors to “ require payment,” was dwelt upon, as containing the power to sue. This language is not contained in the law under consideration. To my own mind I confess there does not appear any peculiar force in this phrase, but the Court certainly laid great stress upon it. But in that case, the Court construed the charter as authorizing two kinds of notices of calls, — one where a forfeiture was intended to be enforced; and the other where none was desired. This was enough to put the right to sue beyond question, if the Court construed the statute correctly; and *304this case comes entirely within the class recognized both in New York and New England, where the terms of the charter as expounded create a right of action. Upon this ground, and applied to subscribers under the Act there expounded, I should feel bound to acquiesce in the decision. But upon the grounds taken by the Court in making it, it can not be made to reach this case. It purports to be governed by the case in Connecticut, and by Sagory vs. Dubois, 3 Sandf. Ch. 466, and Small vs. Herkimer Man. Co. 2 Comst. 330. In the latter case, it is not anywhere intimated that an action could have been brought against a stockholder, except on his subscription, which, in that case, contained an express promise “to pay,” “at such times and in such proportions as the same shall be required by the directors.” And in Sagory vs. Dubois the action was given by an express statutory provision.
In the case in 12 Conn. much stress was laid on the fact that the charter there allowed a sale for interest, as well as principal, from the time when the assessments were payable. Our statute does not allow interest on the assessment at all; and a sale cannot be made for it. No interest runs during the sixty days which must precede a notice of sale, and the sale is merely for the assessment and expenses. This is entirely inconsistent with any right of action; for interest runs from the accruing of such right.
But here there has been a sale of stock, and the action is brought merely for the surplus. And to sustain such an action as this without a statutory authority, not a single case can be found. Even the case in 22 Conn. 456 was an action founded on a statute which gave the right of action in express terms for any deficiency arising after sale. In the case in 2 Dibb, which sustained the implied assumpsit, it was held that if a sale was made, although as under our law, the surplus was to be refunded to the stockholder, the right of action would not lie for any deficiency, but the whole right to sue at all would be barred by the election to sell. *305In Kennebec & Portland R. R. Co. vs. Kendall, 31 Maine, 470, it was held expressly that no action lay for such deficiency; and the sarae doctrine is laid down in 31 Maine, 573, and 39 Maine, 44. In Massachusetts, where, as in Connecticut, an action lies after sale for any deficiency, it is expressly decided in 1 Gray, 544, that such an action is in no sense founded on the subscription, but its validity depends entirely on the statute.
Where there is an express and separate subscription, not required by the charter, but distinct from it, there may be good reason for holding that the remedies in the charter are not affected by, and do not in turn affect, the subscription, any more than they would a promissory note. But where the only act done is done under the charter, contains no promise to jDay, and has no action^ given for it by the charter, and the charter contains an express remedy, it would, in my judgment, go beyond any adjudged case to hold that, after exhausting the express, remedy, any further course remained; or that any remaining liability exists where the relation of stockholder has been terminated.

Judgment affirmed.