Auld v. Caunt

• Decision Date: 09 January 1914
• Citation: 216 Mass. 381,103 N.E. 933
• Parties: AULD v. CAUNT et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

216 Mass. 381

103 N.E. 933

AULD

v.CAUNT et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 9, 1914.

Case Reserved from Supreme Judicial Court, Suffolk County.

Suit by Francis L. Auld against Joseph Caunt and others. On reservation from Supreme Judicial Court. Bill dismissed.I. R. Clark and G. F. Ordway, both of Boston, for complainant.

Currier, Rollins, Young & Pillsbury, of Boston (Samuel H. Pillsbury, of Boston, of counsel), for respondents Rice and Hutchins.

RUGG, C. J.

This is a suit brought to collect the amount of a judgment, recovered by the plaintiff in the courts of this commonwealth against a Maine corporation, from the defendants as subscribers to its stock. If it be assumed in favor of the plaintiff that he has recovered a bona fide judgment within the meaning of the Maine statute, and that a judgment obtained in this commonwealth and not in the courts of Maine may be the foundation for a suit under this statute, he still must maintain that the defendants are persons ‘who have subscribed for or agreed to take stock in said corporation and have not paid for the same,’ under the Revised Statutes of Maine (1903) c. 47, § 89. This Maine statute has been interpreted by the highest court of that state in Libby v. Tobey, 82 Me. 397, at page 404, 19 Atl. 904, at page 906, where it was said:

‘The individual liability of members for the debt of a corporation is a departure from the established rules of law, and is founded solely upon grounds of public policy, depending entirely upon express provisions of statute law. The defendant, if chargeable at all, is chargeable upon a statute liability, as having ‘subscribed for or agreed to take stock in said corporation,’ and who has ‘not paid for the same.’ The contract was not made with him, or on his account. There was no contract express or implied between him and the plaintiff. Such liability is ‘therefore to be construed strictly, and not extended beyond the limits to which it is plainly carried by such provisions of statute.’ Gray v. Coffin, 9 Cush. 192;Erickson v. Nesmith, 4 Allen, 233, 235;Knowlton v. Ackley, 8 Cush. 93, 96. See, also, Savage v. Shaw, 195 Mass. 571, 574 [81 N. E. 303,122 Am. St. Rep. 272,12 Ann. Cas. 806]. * * * The history of the numerous and somewhat complicated enactments upon this branch of the law may be found in an opinion by Tenney, C. J., in Milliken v. Whitehouse, 49 Me. 527, and it is unnecessary to enter upon any extended review of the legislation on this subject here. It is sufficient to say that, up to 1871, the liability existing by general statute (R. S. 1871, c. 46, §§ 24, 26) had been against the ‘stockholders,’ to the amount of their stock, in case of deficiency of attachable corporate property. But, by the act of 1871, c. 205, the statute in relation to the liability of stockholders in corporations was modified, and the word ‘stockholders' which had existed in previous statutes was omitted, and the remedy therein provided now exists only against persons ‘who have subscribed for or agreed to take stock in said corporation, and have not paid for the same,’ etc. * * *

‘The defendant having sold and transferred all the original stock for which he had subscribed, except the 400 shares, at the time this cause of action was contracted, cannot be held upon the one thousand shares which he had purchased in the market. They were not shares he had ‘subscribed for or agreed to within the meaning of the statute. Thames Tunnel Co. v. Shelden, 6 B. & C. 341 (13 E. C. L. 194). A fair inference to be drawn from the language of the statute is that of a transaction or contract with the corporation in accepting, subscribing for or agreeing to take stock, and not one between individuals in the purchase of stock in open market. Had the Legislature intended to make the remedy as broad as that contended for by the plaintiff, and thus render the defendant liable as a ‘stockholder’ upon all stock held or owned by him, regardless of the manner in which he may have obtained it, it would have been an easy matter to have so expressed its meaning. Not having done so, it is not the province of the court to extend the remedy beyond the express provisions of positive enactment, especially in cases where the statute is to be construed strictly.

‘But it is claimed, on the part of the plaintiff, that inasmuch as the defendant was a stockholder in the corporation and knew the circumstances under which the stock was originally issued by the corporation, he was a purchaser with notice, and therefore liable on the 1,000 shares purchased in the market as well as on the 400 shares of original stock.

‘We do not think this doctrine can properly be extended to the facts existing in this case. The authorities relied on in support of this proposition will be found to differ essentially from the case at bar, and relate to cases influenced by some peculiar statute provision differing essentially from that of our own state, or to the cases where the certificates for stock were assessable upon their face or by the charter or by-laws of the company, and payable by installments. In such case the stock, either upon its face, or by the charter or by-laws being liable to assessments, and transferred while the company is solvent, the transferee is substituted for the original subscriber or holder of the stock as to the rights of the company in demanding and collecting assessments. Upton v. Tribilcock, 91 U. S. 45 ;Pullman v. Upton, 96 U. S. 328 .’

To the same effect see Morgan v. Howland, 89 Me. 484, 36 Atl. 990, and Maine Trust & Banking Co. v. Southern Loan & Trust Co., 92 Me. 444, 451, 43 Atl. 24.

The decision of the highest court of a sovereign state as to the meaning of a statute of that state commonly is accepted as final. Moreover this interpretation accords fully with our own view of its meaning. There appears to be nothing inconsistent with this conclusion in McAvity v. Lincoln Pulp &...