Court Opinion

ID: 7045198
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:54:18.68819+00
Date Added: 2024-06-11T16:11:30.260864
License: Public Domain

On Petition for a Rehearing.
Morris, C.
The appellant insists that this action is not, as the court held, based upon a judgment against the corporation, but upon the original indebtedness and the undertaking of the stockholders as individuals, to pay the debts of the corporation. We have re-examined the amended complaint, as set forth in the amended transcript, and we are satisfied that the action is upon the judgment, and not upon the original indebtedness of the corporation.
The appellant sues as the assignee of the judgment; he sets out the assignment, and avers that the appellees are liable upon it. True, he avers that the judgment was for services rendered to the corporation, and sets out an account of such services, but the action is not founded upon the account, but upon the judgment.
Where a judgment is declared upon as the cause of action, it is conclusive between the parties to it. We d'o not think the judgment in this case against the corporation could be held to be conclusive against the stockholders when sued individually for the debts of the corporation. It is not the cause of action upon which they are liable to be sued. „ No one would pretend that the individual liability of the stockholder for the debts of the corporation, which is primary, would be merged in a judgment against the corporation for such debts. Whether the judgment against the corporation for its indebtedness could be used in evidence against the stockholders when sued individually for such indebtedness, is another question which we need not decide; but it is certain, we think, that the cause of action, the original indebtedness, still exists as a cause of action against the stockholders, notwithstanding the judgment against the corporation, that it is not merged in such j udgment, and upon it the stockholders are individually liable. And to this we understand the ap*316pollan t t.o agree. But if the judgment against the corporation is to have the effect of a judgment against the stockholders individually, it would seem that as to him the cause of action upon which the judgment is rendered must be held to be merged in it, and that the stockholder is no longer liable upon it. This is not the law. The liability’of the stockholder is primary, and he may be sued upon the original indebtedness though it has been put in judgment against the corporation.
Per Curiam. — The petition for a rehearing is overruled.