Frank Thomas v. Conrad Matthiessen
| Decision Date | 02 February 1914 |
| Docket Number | No. 171,171 |
| Citation | 34 S.Ct. 312,58 L.Ed. 577,232 U.S. 221 |
| Parties | FRANK N. THOMAS, Petitioner, v. CONRAD H. MATTHIESSEN |
| Court | U.S. Supreme Court |
Messrs. Alfred Adams Wheat and Philip Ashton Rollins for petitioner.
[Argument of Counsel from pages 222-225 intentionally omitted] Messrs. Arthur C. Rounds and Harold Otis for respondent.
[Argument of Counsel from pages 225-232 intentionally omitted]
This is a suit by a citizen of California, the holder of two notes made in California by the Wentworth Hotel Company, to recover from a stockholder in that corporation, a citizen of New York, a proportionate share of the sums due upon the same. The facts as agreed and found are as follows: The corporation was formed under the laws of the territory of Arizona, among many other things, to buy and sell real estate, 'to build, maintain, operate, and carry on, in all its branches, the business of hotel keeping,' and to build or purchase gas or electric works in Arizona or California, 'both for its use in the hotel business and for the purpose of selling and disposing of the same.' The principal place of business in Arizona was Tucson, and that outside of it was Los Angeles, California, with power to change to Pasadena, in that state. Before the incorporation, the defendant, re-
siding in New York, signed a writing reciting the intent of the subscribers to form a corporation in Arizona for the purpose of acquiring a portion of the Oak Knoll, and building a first-class hotel thereon; and he thereby subscribed for a certain number of shares. Later he took and paid for one thousand shares. The Oak Knoll is near Pasadena, in California, and the defendant and his associates intended the corporation to have the power to build and manage a hotel in that neighborhood, and expected that it would do so, but intended their liability to be controlled by the laws of Arizona.
The corporation complied with the laws of California, bought the land, built the hotel, went into business, and finally was adjudged insolvent. The notes in question were given for loans to the company. At the time of subscribing the defendant agreed with the company that he should be exempt from personal liability, and that neither the corporation nor its officers should have power to subject him or the other stockholders to it. Such exemption was expressed also in the certificate of incorporation. But by the statutes of California each stockholder of a corporation is personally liable for such proportion of the debts contracted while he is such, as the amount of his stock bears to the whole subscribed, and the liability of each stockholder of a corporation formed under the laws of any other state or territory of the United States, but doing business in California, is the same. Civil Code, § 322. The courts below ruled that the defendant could not be held, the circuit court of appeals citing Risdon Iron & Locomotive Works v. Furness [1906] 1 K. B. 49, 75 L. J. K. B. N. S. 83, 54 Week. Rep. 324, 93 L. T. N. S. 687, 22 Times L. R. 45, 11 Com. Cas. 35, in which it was held that the law of California could not impose liability upon an English shareholder in an English corporation, without his assent. 113 C. C. A. 101, 192 Fed. 495.
We agree that without authority from the stockholder a corporation cannot make him answerable in a way not
contemplated by the charter. We will assume for purposes of decision, although we express no opinion upon the point, that a provision for doing business in other states without any express reference to the possible difference in their laws would not be enough to change the rule. But a provision exempting the stockholder alongside of one authorizing the doing of business elsewhere cannot be taken to limit the latter authority to those states that grant a like exemption, or be deemed an attempt to override the law of the place where the business is to be done. That law may fail to operate for want of power over the person sought to be affected; but the charter leaves it open to that person to come in under it by assent. If the law of California forbade a foreign corporation to do business there unless all the stockholders filed a written assent to its conditions, the Arizona charter would not make such an agreement void. If this be true, then a particular stockholder may give such assent outside of the instrument of incorporation, and be bound by it.
In this case the defendant expressed in writing his wish the corporation should set up a hotel in California. It is true that he also desired and stipulated that he should be free from personal charge. But that is merely the not infrequent occurrence of a party bringing about the facts and attempting to prohibit their legal consequence to which we lately had occasion to advert in National City Bank v. Hotchkiss, 231 U. S. 50, 56, 58 L. ed. , 34...
To continue reading
Request your trial
-
Louis Liggett Co v. Lee 12 8212 13, 1933
...in California, this provision was held applicable. Pinney v. Nelson, 183 U.S. 144, 22 S.Ct. 52, 46 L.Ed. 125; Thomas v. Matthiessen, 232 U.S. 221, 34 S.Ct. 312, 58 L.Ed. 577. And more recently this Court has sustained a constitutional provision of Virginia which prohibits foreign public ser......
-
Moran v. Cobb
...where the business was done, as completely and as fully as if the appointment had been made in Arizona. See Thomas v. Matthiessen, 232 U.S. 221, 34 S.Ct. 312, 58 L.Ed. 577." 12 Grout v. First Nat. Bank, 48 Colo. 557, 562-563, 111 P. 556, 558, 559, 21 Ann.Cas. 418; King v. Pomeroy, 8 Cir., 1......
-
R.I. Hosp. Trust Co v. Doughton
...certainly by the permission and under the ultimate protection, if not by the direct operation, of our laws. Thomas v. Matthiessen, 232 U. S. 235, 34 Sup. Ct. 312, 58 L. Ed. 577. To point out the various differences between the authorities cited and the instant case would only be a work of s......
-
Lee v. Jenkins Brothers
...1941, 122 F.2d 710; Gallagher v. Washington County S. L. & B. Co., 1943, 125 W.Va. 791, 25 S.E.2d 914; cf. Thomas v. Matthiessen, 1914, 232 U. S. 221, 34 S.Ct. 312, 58 L.Ed. 577. See Reese and Kaufman, The Law Governing Corporate Affairs: Choice of Law and the Impact of Full Faith and Credi......