Court Opinion

ID: 3990721
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:50:45.270781+00
Date Added: 2024-06-11T14:25:42.879855
License: Public Domain

I feel constrained to dissent from the conclusions of my brethren expressed in the foregoing opinion.
Since, under the California constitution and statutes, each stockholder is individually and personally liable for such proportion of the debts of the corporation as the amount of stock, owned by him bears to the whole of the capital stock; since this is a liability by the stockholders direct to each creditor, and not to the corporation, immediately upon the incurring of the indebtedness by the corporation; and since the creditor has the right to sue and recover direct from the stockholder such proportion of his claim; I am unable to understand how any indebtedness owing by the corporation to the stockholder so sued can be held to be an off-set in his favor against the creditor. If this be the law, then by action of the corporation and the stockholder alone, the creditor, without his consent, may be deprived *Page 190 
of the right to look to the stockholder for his proportionate liability.
The outstanding features of this problem, as I see it, are that the stockholder's liability to the creditor is immediate and is limited to such proportionate amount of the creditor's claim as the amount of his stock bears to the whole of the corporation's capital stock; that is, if a stockholder owns one-tenth of the capital stock, he is immediately liable to the creditor for one-tenth of the creditor's claim, recoverable at the suit of the creditor against such stockholder. This, to my mind, renders the California constitution and statutes as providing, in substance, for a fund for the ratable payment of all corporate debts as a charge against the stockholders in proportion to their several ownerships of the corporation's capital stock. True, the California constitution and statutes, as here presented to us, do not provide for the collection from the stockholders and paying out to the creditors by a receiver or some other trust officer acting in behalf of all creditors, but the result of suits by creditors directly against stockholders for their proportionate liabilities has, to my mind, exactly the same effect under these California constitutional and statutory provisions; that is, the several amounts of liability from the stockholders to the corporate creditors constitute in substance, on the whole, a trust fund for the benefit of the corporate creditors. I think that most, if not all, of the authorities cited in the majority opinion can be reconciled with, and will lend support to, this view of the law, when critically examined.
I am willing to concede for present purposes that as between two stockholders, both of whom are also creditors of the corporation, the problem would have to be viewed from a different angle. But that is not this *Page 191 
case. This respondent creditor is not a stockholder of the Luthy Company of California, of which the appellant Week is a stockholder, from whom recovery is sought as such stockholder.