Court Opinion

ID: 3608354
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:53:12.717204+00
Date Added: 2024-06-11T13:39:48.341538
License: Public Domain

This action is based upon section 10 of the general railroad act (chap. 140 of the Laws of 1850, as amended by chap. 282 of the Laws of 1854), which provides, that "each stockholder of any company formed under this act shall be individually liable to the creditors of such company to an amount equal to the amount unpaid on the stock held by him, for all the debts and liabilities of such company, until the whole amount of the capital stock so held by him shall have been paid to the company." The only material question brought up on this appeal is whether, in an action against a stockholder to enforce this liability, a judgment recovered against the company is competent evidence of the plaintiff's status as a creditor of the company and of the amount due him.
The effect of section 10 is not to impose any penalty upon the stockholder, or any original liability, but simply to confer upon the creditor of the corporation the right to pursue, for the satisfaction of his claim, the indebtedness of the stockholder to the corporation for his unpaid subscription to the capital stock. (Mills v. Stewart, 41 N.Y. 389.) The liability of the stockholder is not created or enlarged by the statute. It rests *Page 317 
upon his contract with the corporation, and the creditor is simply subrogated to the claim of the corporation against its debtor, in case he avails himself of his right under the statute to pursue the stockholder as such debtor to the corporation. A payment by the stockholder to the creditor, upon a recovery by him under the statute, will discharge the stockholder pro tanto
from his indebtedness to the corporation. The creditor thus claims through the corporation, and to entitle him to this statutory subrogation or transfer, he need only show that he is a creditor. If he shows this fact by evidence which is binding and conclusive against the corporation, such evidence should be competent against the stockholder to establish the title of the creditor to succeed to the rights of the corporation. A judgment against the corporation being the highest evidence against it, should be as effectual to pass its title to the fund in question as a deed or any other form of transfer. The cases of Miller v.White (50 N.Y. 137) and McMahon v. Macy (51 id. 155) depend upon an entirely different principle. In those cases the defendant was not pursued as a debtor to the corporation, or for any pre-existing liability of his own, but upon an original liability created by the statute, and it was not in the power of the corporation to admit away his case, or suffer a recovery which should be binding upon him and create, as against him, a liability to which he was not previously subject. The present case depends upon the same principle as Hastings v. Drew
(76 N.Y. 9), and other cases of actions by creditors against the debtors of their debtors, or for the recovery of assets of such debtor. In all such cases a judgment recovered by the plaintiff against his debtor is evidence of the right of the plaintiff to pursue the debtors or assets of the judgment debtor.
The exceptions to the exclusion of evidence of the defendant's counter-claim cannot be sustained. Before this evidence was offered the case had been closed, and it was reopened for the sole purpose of allowing the defendant to put in evidence certain exhibits and records. The defendant was not entitled, *Page 318 
under this order, to go into a new defense and put in oral evidence. We find no good exception in the case.
The judgment should be affirmed.
All concur.
Judgment affirmed.