Converse v. Hamilton

• Decision Date: 10 November 1908
• Citation: 118 N.W. 190,136 Wis. 589
• Parties: CONVERSE v. HAMILTON.
• Court: Wisconsin Supreme Court

136 Wis. 589

118 N.W. 190

CONVERSE

v.HAMILTON.

Supreme Court of Wisconsin.

Nov. 10, 1908.

Appeal from Circuit Court; Dane County; E. Ray Stevens, Judge.

Action by Theodore R. Converse, receiver of the Minnesota Thresher Manufacturing Company, against Caroline A. Hamilton. Judgment for defendant, and plaintiff appeals. Affirmed.

This action is brought against a resident of the state of Wisconsin to enforce a stockholder's liability arising under the laws of Minnesota. In May, 1901, the Merchants' National Bank of St. Paul recovered a judgment against the Minnesota Thresher Manufacturing Company (hereinafter called the bankrupt), a corporation organized under the laws of the state of Minnesota, amounting to $2,936.07. Execution was issued upon said judgment, and was returned unsatisfied, whereupon the plaintiff brought an action for the sequestration of the stock, property, and effects of said bankrupt, and applied for the appointment of a receiver to take charge of the same. The plaintiff receiver was appointed in said action in August, 1901. In September, 1901, an order was made in the action, requiring the creditors of the bankrupt to become parties thereto, and to appear and exhibit therein their claims against said bankrupt. In pursuance of such order the claims of creditors were allowed to the amount of $443,752.12 Section 3 of article 10 of the Constitution of Minnesota provides that “each stockholder in any corporation (excepting those organized for the purpose of carrying on any kind of a manufacturing or mechanical business) shall be liable to the amount of stock held or owned by him.” The Supreme Court of Minnesota held in the case of Merchants' National Bank v. Minnesota Thresher Manufacturing Company, 90 Minn. 144, 95 N. W. 767, that the capital stock of the bankrupt was liable to assessment under this constitutional provision. Under the law of Minnesota as it existed prior to 1899, the double liability of stockholders could only be enforced by instituting an action by or in behalf of the creditors against the corporation and its stockholders in the state of Minnesota. This law was materially modified by chapter 272, p. 315, Gen. Laws Minn. 1899, which statute was in effect at the time the receiver was appointed in this action. A statement of the substance of the Minnesota statute referred to, in so for as it is necessary to here state it, will be found in the report of Hunt v. Whewell, 122 Wis. 34, 35, 99 N. W. 599. At the time, the receiver was appointed, the defendant, a resident of the state of Wisconsin, was the owner of 21 shares of the stock of the bankrupt company, of the par value of $1,050. On December 22, 1902, an order was made in the receivership proceeding, levying an assessment of 36 per cent. upon the outstanding capital stock of said corporation, and directing the receiver to institute the necessary proceedings to collect such assessment. On June 11, 1907, a second order was made levying a like assessment of 64 per cent. on the capital stock of the corporation for the purpose of paying its debts, and the receiver was by said order directed to enforce collection of such assessment. This action is brought upon both assessments. A demurrer to the complaint was interposed, which was sustained, and, the plaintiff declining to amend, final judgment was entered dismissing the complaint, from which judgment this appeal is taken.

Timlin, J., dissenting.Jones & Schubring (C. A. Severance, of counsel), for appellant.

Sanborn & Blake, for respondent.

BARNES, J. (after stating the facts as above).

It is conceded by counsel for both parties in this case that every controverted question therein involved was also involved and decided in Hunt v. Whewell, 122 Wis. 33, 99 N. W. 599. It was there said in reference to the cause of action sued upon: “The liability is statutory, the remedy to enforce it is statutory, and the appellant's title is a creature of the statute.” A conclusion was reached that, as to such a cause of action, the courts of this state could, if they chose, close their doors and refuse to entertain the same. The opinion in Hunt v. Whewell covers every phase of this case that it is considered by the court necessary or even advisable to cover here. As far as this court is concerned, that decision is stare decisis as to all questions involved until a higher tribunal reaches a different conclusion. In the case of Bernheimer v. Converse, 206 U. S. 516, 27 Sup. Ct. 755, 51 L. Ed. 1163, relied upon by appellant's counsel as practically overruling Hunt v. Whewell, the question of comity was not involved, was not discussed, and was not passed upon in any way. The right to refuse comity was the sole question decided in Hunt v. Whewell. The Bernheimer Case, therefore, is not in conflict therewith.

For reasons given in Hunt v. Whewell, and upon the grounds therein stated, the judgment in this case should be affirmed.

Judgment affirmed.

TIMLIN, J. (dissenting).

Upon the questions involved in this cause I think the law is in a regrettable condition of uncertainty. Hancock Nat. Bank v. Farnum, 176 U. S. 640, 20 Sup. Ct. 506, 44 L. Ed. 619;Huntington v. Attrill, 146 U. S. 657, 13 Sup. Ct. 224, 36 L. Ed. 1123;Laing v. Rigney, 160 U. S. 531, 16 Sup. Ct. 366, 40 L. Ed. 525;Harding v. Harding, 198 U. S. 317, 25 Sup. Ct. 679, 49 L. Ed. 1066;Finney v. Guy, 189 U. S. 335, 23 Sup. Ct. 558, 47 L. Ed. 839;Bernheimer v. Converse, 206 U. S. 516, 27 Sup. Ct. 755, 51 L. Ed. 1163;Hunt v. Whewell, 122 Wis. 33, 99 N. W. 599;Finney v. Guy, 106 Wis. 256, 82 N. W. 595, 49 L. R. A. 486;Eau Claire Bank v. Benson, 106 Wis. 624, 82 N. W. 604.

This is not a contest relating to property in this state and between creditors resident in this state and a foreign receiver. There are many such cases, and there is some confusion on that subject. 1 Wharton, Conflict of Laws (3d Ed.) § 390 2/3 et seq. But in this state the rules of law controlling that class of cases are fairly settled. There can ordinarily be in such cases no questions concerning the faith and credit to be given to judgments of a sister...