Anglo-american Land Mortgage & Agency Co. v. Dyer
| Decision Date | 18 June 1902 |
| Citation | 64 N.E. 416,181 Mass. 593 |
| Parties | ANGLO-AMERICAN LAND MORTGAGE & AGENCY CO., Limited v. DYER. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Omar Powell and Wm. G. Waitt, for plaintiff.
R. A Hopkins and H. P. Harriman, for defendant.
This is an action to recover certain assessments made upon 40 shares of the capital stock of the plaintiff company held by the defendant. The shares are of the par value of 10 each, and the liability of the shareholders is limited to the par value. The assessments in suit amount to >>>6 per share, and assessments amounting to 2 per share had been previously paid by the defendant,--1 when he bought the stock in 1884, and 1 on an assessment made in 1885. The exceptions set out all the material evidence. At the close of the evidence the defendant requested certain rulings, all of which except two were refused, and the jury were directed to return a verdict for the plaintiff. The case is here on exceptions by the defendant to the ruling thus given, and to the refusal to rule as requested, and on exceptions to the refusal to make certain rulings that were requested during the trial. We shall consider only the exceptions that have been argued by the defendant, treating the others as waived.
Amongst the rulings requested and refused was one that on all the evidence the action could not be maintained, and that a verdict be directed for the defendant. The plaintiff is a corporation organized under the companies' acts of Great Britain. The first question--and what is said on the defendant's brief to be the principal question--is whether assessments made by foreign corporations can be collected by such corporations in the courts of this commonwealth of stockholders residing here. If the other grounds of liability are present, we see no objection to the maintenance of such an action against resident stockholders in the fact that the corporation seeking to collect the assessments is a foreign corporation. The liabilities of resident stockholders in foreign corporations have been recognized and enforced in unmerous cases in the courts of this commonwealth. It is unnecessary to do more than refer to the recent case of Howarth v. Lombard, 175 Mass. 570, 56 N.E. 888, 49 L. R. A. 301, where the authorities are collected and considered, and where it was held that an assessment upon the defendant as a stockholder in a bank in the state of Washington could be collected here. The objection that the remedy is by a sale of the stock, as has been held in regard to local assessments in various cases in this state (New Haven Horse Nail Co. v. Linden Springs Co., 142 Mass. 349, 354, 7 N.E. 773, and cases cited), is removed by the fact that the defendant has, if not expressly, at least impliedly, agreed to pay to the plaintiff any assessments that might be made. In his application for the stock, which was in writing, he agreed to accept the shares that might be allotted to him 'upon the terms of the prospectus and memorandum and articles of association,' and authorized the insertion of his name upon the memorandum of association. The statute (19 & 20 Vict. c. 47, § 7) under which the corporation was organized, and which must be taken to be a part of the contract between the defendant and the plaintiff (Howarth v. Lombard, supra; Hutchins v. Mining Co., 4 Allen, 580), provides that the memorandum of association shall bind the members of the company 'to the same extent as it would' if each member had subscribed his name and affixed his seal thereto, and there were contained in it a covenant on his part and his heirs, executors, and administrators, to observe all the conditions of such memorandum. The statute makes similar provisions in regard to the articles of association, and further provides that 'all moneys payable by any member of the company in pursuance of the conditions and regulations of the company, or of any such conditions or regulations, shall be deemed to be a debtdue from such member to the company.' The articles of association provide that 'the directors may from time to time make such calls as they think fit upon the members in respect of all moneys unpaid on their shares, and each member shall pay the amount of every call so made on him to the persons and at the times and places appointed by the directors.' The certificate that was issued to the defendant provided that he took the shares 'subject to the articles of association and the rules and regulations of the company.' The effect of these various provisions was, we think, to create a valid and binding contract between the defendant and the plaintiff company, by which he became bound to pay to it such calls or assessments as the directors might make upon him from time to time in respect to the moneys unpaid on his shares, and which could be enforced against him in the courts of this state or of any other state or country where proper service could be obtained upon and jurisdiction acquired over him.
The defendant further objects that the capital stock had not all been subscribed for when the assessments were made, and that therefore, under Land Co. v. Jernegan, 126 Mass. 155, and other cases decided in this commonwealth, the action cannot be maintained. The articles of association provide that 'the nominal capital of the company is 500,000, divided into 50,000 shares of 10 each, of which the first issue shall be 25,000 shares, with power to increase such capital and to issue all or any part of the original or increased capital at a premium or at a discount,' etc. Upwards of 37,000 shares have been issued. The provision quoted above formed a part of the contract between the defendant and the plaintiff company, and by agreeing that the first issue should be 25,000 shares, with power to increase the capital, the defendant has waived the right, if he would otherwise have had it,--upon which we express no opinion,--to object that the whole 50,000 shares had not been subscribed for. There is nothing contrary to public policy in such an agreement. If the provision that the first issue should be 25,000 shares be regarded as a stipulation that that number of shares must be subscribed for, then it appears that the stipulation has been complied with. It is not necessary to consider whether it should be so regarded, or what would be the effect under the English law,...
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