Bank of North America v. Rindge
| Decision Date | 27 June 1891 |
| Citation | 154 Mass. 203,27 N.E. 1015 |
| Parties | BANK OF NORTH AMERICA v. RINDGE. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Henry S. Dewey, for appellant.
Hutchins & Wheeler, for appellee.
The plaintiff is a corporation of the state of New York. The defendant is a resident of California, who owned 50 shares of stock in the Haddam State Bank, a corporation of Kansas. The plaintiff recovered judgment in Kansas for $5,343 and costs against the Haddam State Bank, and took out execution thereon, but could find no property of the bank whereon to levy, and so the execution was returned unsatisfied. No steps were taken in Kansas to charge the defendant as a stockholder in the bank, but, he being found in Massachusetts, the plaintiff brings this action against him here, seeking to charge him personally for the judgment against the bank to the amount of the par value of his shares therein, namely $5,000. This is sought to be done by virtue of the laws of Kansas, respecting which the averment in the declaration is as follows: "And the plaintiff further says that, by the laws of the state of Kansas, if any execution shall have been issued against the property or effects of a corporation except a railway or religious or charitable corporation, and there cannot be found any property whereon to levy such execution, then execution may be issued against any of the stockholders to an extent equal in amount to the amount of stock by him or her owned, together with any amount unpaid thereon; or the plaintiff in the execution may proceed by action to charge the stockholders with the amount of his judgment, and such plaintiff may maintain an action at law against any one or more of the stockholders of such corporation to recover a debt due by the corporation." The declaration was demurred to, and we have to determine whether the plaintiff states a case upon his declaration. The declaration does not in terms set forth any statute of Kansas, nor show to what extent the laws of Kansas above set forth are statutory, or rest merely in judicial decisions. It is to be regretted that we are not at liberty to determine the case upon an examination of the statute of Kansas, with the assistance of any construction which may have been put upon it by the courts of that state. But we must take the case as the parties present it to us. The question can hardly be considered as an open one in this commonwealth. This court has often declined to exercise jurisdiction to enforce a liability imposed upon stockholders in corporations established in other states, under statutes of those states. In Post v. Railroad Co., 144 Mass. 341, 345, 11 N.E. 540, it is said: "This court does not take jurisdiction of a suit to enforce this liability of stockholders in a foreign corporation, not because it would be a suit to enforce a penalty, or a suit opposed to the policy of our laws, but because it is a suit against a foreign corporation which involves the relation between it and its stockholders, and in which complete justice only can be done by the courts of the jurisdiction where the corporation was created." See, also, New Haven Horse-Nail Co. v. Linden Spring Co., 142 Mass. 349, 353, 7 N.E. 773, and cases cited.
The case at bar furnishes a strong illustration of the propriety of this course. If the plaintiff, as a creditor of the Kansas corporation, without obtaining any previous judgment in Kansas establishing the defendant's liability as a stockholder, can maintain an action directly and in the first instance against him in Massachusetts, for the purpose of charging him as a stockholder under the qualified liability set forth in the declaration, then it would follow that the plaintiff might also institute a similar action against him in California, or in any number of other states where service upon him could be obtained. The plaintiff might also institute similar actions for the same debt in different states against other stockholders. In such case it is probable that a judgment against one stockholder without satisfaction would be no bar to actions against others, but it is obvious that the defendants in such actions might be put to great inconvenience in ascertaining, and indeed might find it...
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