Court Opinion

ID: 7060649
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:20:30.917037+00
Date Added: 2024-06-11T16:12:09.652308
License: Public Domain

Dissenting Opinion.
Lotz, J.
It is averred in the complaint, that the “plaintiffs and defendants entered into a certain agreement to organize a corporation. * * * Afterwards the plaintiffs organized such corporation, * * * and certificates of stock * * * were issued to the plaintiffs and defendants, severally, which were accepted by *10the plaintiffs and defendants, and paid for, according to said agreement.”
From these averments, I think it appears that the plaintiffs and defendants were promoters, incorporators, and stockholders of the corporation, and that the relation of stockholders existed between them from the time of the organization of the corporation to the commencement of this action.
It is the policy of the Legislature of this State to secure to the laborer the speedy and certain payment of his wages. This policy, however, as held in the majority opinion, does not give him the right to proceed directly against a stockholder without a showing that a suit against the corporation would be unavailing. He must first exhaust the corporation. A corporation of the kind described in the complaint can not proceed with its business without the assistance of laborers. If the wages are not paid, the laborers may refuse to work, and the business of the corporation come to an end.
It is averred that “no funds were provided for the payment of employes and laborers.”
A stockholder who pays the wages of the laborers, under such circumstances, does so in the interest of the corporation, and for the purpose of promoting its business. The property of the corporation is represented by the stock, and payments of this kind enure to the benefit of the stockholders. When the appellees made the payment of the labor claims, they did it for the protection of their own property and that of their fellow-stockholders, the appellants. They were,, subrogated to the rights of the laborers. Their remedy, it is true, was primarily against the corporation. But the complaint shows that the corporation is insolvent, and from this it follows that a suit against it would be unavailing.
Upon the theory that the relation of stockholders ex*11isted between the appellants and appellees, from the organization of the corporation to the time of the commencement of this action, I think the complaint states a good cause of action.
Filed Jan. 11,1894.