Crippen v. Laighton

• Decision Date: 28 July 1899
• Citation: 44 A. 538,69 N.H. 540
• Court: New Hampshire Supreme Court
• Parties: CRIPPEN et al. v. LAIGHTON.

44 A. 538

69 N.H. 540

CRIPPEN et al.

v. LAIGHTON.

Supreme Court of New Hampshire. Rockingham.

July 28, 1899.

Bill by Crippen, Lawrence & Co. against John Laighton. Bill dismissed.

Bill in equity, alleging that on June 10, 1890, the plaintiffs recovered judgment in the district court of the county of Dickinson, in the state of Kansas, against the Corn State Bank, a corporation established January 31, 1887, by the laws of Kansas, for $805.70 debt, and costs taxed at $215.85; that execution issued on the judgment, and was returned unsatisfied; that the defendant subscribed for and "actually" took five shares of the capital stock of the bank of the par value of $100 each; that by the law of Kansas the plaintiff may have and recover of the defendant, as an individual shareholder in the bank, the sum of $500,—that is to say, an amount equal to the par value of his stock; and praying that the defendant be ordered to pay that amount to the plaintiffs. The defendant (now and always heretofore a citizen of this state), in his answer, "denies that the plaintiffs have any cause of action in this jurisdiction upon the facts stated, or that they can maintain any bill in equity thereon, and claims the benefit of all exceptions which would be available to him upon demurrer." He also denies all the material allegations of the bill, and alleges that, "if any cause of action ever existed upon the facts in the plaintiffs' bill stated, the same was not brought within the time limited for the enforcement of the plaintiffs' demands against him, and so was barred by the statute of limitations." The cause was heard on the bill, answer, and proofs. All the allegations of the bill are found to be true. The defendant was a stockholder of the bank when its indebtedness to the plaintiffs occurred, and until after their judgment against the bank was rendered. December 26, 1889, the Western Trust Company, a corporation established by the laws of Kansas, bought all the assets and assumed all the liabilities of the Corn State Bank, and January 1, 1891, went into the hands of, and was wound up by, a receiver. The constitution of Kansas contains a clause as follows: "Dues from corporations shall be secured by individual liability of the stockholders to an additional amount equal to the stock owned by such stockholders, and such other means as shall be provided by law; but such individual liability shall not apply to railroad corporations, nor corporations for religious and charitable purposes." Const, art. 12, § 2. The statutes of Kansas provide: "That if any execution shall have been issued against the property or effects of a corporation, except a railway or a 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; but no execution shall issue against any stockholder, except upon an order of the court in which the action, suit, or other proceeding shall have been brought or instituted, made upon motion in open court, after reasonable notice in writing to the person or persons sought to be charged; and, upon such motion, such court may order execution to issue accordingly; or the plaintiff in the execution may proceed by action to, charge the stockholders with the amount of his judgment." Gen. St. 1889, par. 1192. By the Kansas statute of limitations, "an action upon a liability created by statute" must be brought within three years after the cause of action has accrued, but it does not run in favor of a person while he is absent from the state. All other relevant statutes, practice code provisions, and all pertinent judicial decisions of Kansas are a part of the case, and, as furnished by counsel, are as follows: "If any corporation created under this, or any general statute of this state, except railway or charitable or religious corporations, be dissolved, leaving debts unpaid, suit may be brought against any person or persons who were stockholders at the time of such dissolution, without joining the corporation in such suit; and if judgment be rendered and execution satisfied, the defendant or defendants may sue all who were stockholders at the time of the dissolution for the recovery of the portion of such debt for which they were liable, and the execution upon the judgment shall direct the collection to be made from property of each stockholder respectively; and if any number of stockholders [defendants in the case] shall not have property enough to satisfy his or their portion of the execution, then the amount of the deficiency shall be divided equally among all the remaining stockholders and collection made accordingly, deducting from the amount a sum in proportion to the amount of stock owned by the plaintiff at the time the company was dissolved." Gen. St. 1889, par. 1204. "If any stockholder pay more than his due proportion of any debt of the corporation he may compel contribution from the other stockholders by action." Id. par. 1205. In Howell v. Manglesdorf, 33 Kan. 194, 5 Pac. 759, it was decided that under paragraph 1192 execution could not issue against a stockholder resident in another state upon notice served upon him in his own state,—in other words, a stockholder in another jurisdiction could not be subjected to execution under that section without his voluntary appearance or consent,—and incidentally the court said the liability was in the nature of a guaranty. In Abbey v. Dry-Goods Co., 44 Kan. 415, 24 Pac. 426, it was held that the liability of stockholders to creditors of the corporation is several, and not joint; that an action by a creditor against two or more stockholders cannot be sustained, but each must be sued separately. This doctrine was affirmed In Howell v. Bank, 52 Kan. 133. 34 Pac. 395. The question whether the defendant's liability under the laws of Kansas can be enforced in this state by bill in equity or other form of procedure is reserved.

Samuel W. Emery and James W. Remick, for plaintiffs.

Frink & Marvin, for defendant.

BLODGETT, C. J. The question submitted is whether the plaintiffs' bill (or action at law, if they are permitted to amend) can be maintained; or, in other words, whether a cause of action unknown to the common law, and which exists only by reason of a local law of the state of Kansas, can, or ought to be, enforced in this jurisdiction. The several states of the Union do not stand, in their relations to each other, altogether like foreign countries. They are all subject in many respects to a superior sovereignty, and to numerous laws common to all of them. They are in various ways mutually dependent upon each other. To a large extent their interests are common. Their personal and commercial intercourse is constant, and without restriction. Their political and business relations are equally Intimate. Many of their relative rights and duties are declared by a "carefully prepared instrument," which controls them all They are not several or foreign, but united, states. Nevertheless, each state is a sovereign state, except only as it is subject to the federal constitution, under which, for all purposes embraced in it, "the states and the citizens thereof are one, united under the same sovereign authority, and governed by the same laws. In all other respects, the states are necessarily foreign to and independent of each other, their constitutions and forms of government being, although republican, altogether different, as are their laws and institutions" (Bank v. Earle, 13 Pet. 519, 584); "and their acts have, consequently, no extraterritorial authority" (Sedg. St. & Const. Law, 60; Blanchard v. Russell, 13 Mass. 1). Such being the relation and position of the states in regard to each other, a uniformity of state laws is universally recognized as desirable, but has hitherto been found impracticable. There is no reasonable probability of such uniformity in the immediate future through the action of the states. It is in fact apparent that by reason of their location, the peculiarities of their soil and climate, the character of their people, their business and commercial interests, and a multitude of other conditions and circumstances, a law beneficial in one state might be injurious in another. To make a law of Massachusetts equally valid and enforceable in Oregon might, and probably would, do injustice to the citizens of both states, or to make the laws of both identical. The federal constitution declares that: "Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof." Const. U. S. art. 4, § 1. Under this provision the congress has enacted that: "The acts of the legislature of any state or territory, or of any country subject to the jurisdiction of the United States, shall be authenticated by having the seals of such state, territory, or country affixed thereto. The records and judicial proceedings of the courts of any state * * * shall be proved or admitted in any other court within the United States, by the attestation of the clerk and the seal of the court annexed, * * * together with a certificate of the judge, chief justice, or presiding magistrate that the said attestation is in due form. And the said records and judicial proceedings, so authenticated, shall have such faith and credit given to them in every court within the United States as they have by law or usage in the courts of the state from which they are taken." Rev. St. U. S. § 905. By this statute the mode of authentication of both state statutes and of the judgments of state courts, and the effect of such judgments in other states, are determined. Mills v. Duryee, 7 Cranch, 481; ...