Hancock Nat. Bank v. Farnum

• Decision Date: 14 April 1898
• Citation: 40 A. 341,20 R.I. 466
• Parties: HANCOCK NAT. BANK v. FARNUM.
• Court: Rhode Island Supreme Court

40 A. 341

20 R.I. 466

HANCOCK NAT. BANK

v. FARNUM.

Supreme Court of Rhode Island.

April 14, 1898.

Action by the Hancock National Bank against Jonathan W. Farnum. Demurrer sustained.

Wm. J. Cronin and John E. Conley, for plaintiff.

Edwards & Angell, for defendant.

STINESS, J. The declaration sets out that the plaintiff is a creditor of the Commonwealth Loan & Trust Company, a corporation under the laws of Kansas, upon a judgment of the United States district court for the district of Kansas; that execution issued on said judgment, which has been returned unsatisfied; that the defendant holds 10 shares of the stock of said company, of the par value of $100 each; that he owes the plaintiff the sum of $1,000, under the laws of Kansas, which provide that execution for an amount equal to his stock may issue against a stockholder when property of the corporation cannot be found whereon to levy an execution against the corporation, or that the plaintiff may proceed by action to charge the stockholder; that by the constitution of Kansas, and by decisions of its supreme court, the liability of the stockholder is contractual, several, and transitory; and that, having been so decided, under the provisions of the constitution of the United States an action on such liability may be had in this state. Article 12, § 2, of the constitution of Kansas; article 4, c. 23, par. 1192, of the Kansas General Statutes; and the decisions of the supreme court of Kansas in Howell v. Manglesdorf, 33 Kan. 194, 5 Pac. 759, Abbey v. Dry-Goods Co., 44 Kan. 415, 24 Pac. 426, and Wells v. Robb. 43 Kan. 201, 23 Pac. 48—are made a part of the declaration. The defendant demurs to the declaration. The plaintiff does not claim that a purely statutory liability in one state is a cause of action in another state, but that when it is of a contractual nature, or of a kind adapted to the lex fori, it is a cause of action. Accordingly it seeks to bring this case within the contractual class, and its proposition is this: The law is construed in Kansas to constitute a contract. Full faith and credit must be given to this construction, as a judicial proceeding, in other states. Hence the plaintiff is entitled to enforce in this state the liability of a stockholder in a Kansas corporation, as on a contract. The argument is pressed with ability and plausibility, but we are not able to see that it is applicable to this case. The declaration does not aver that the defendant has made a contract, nor that the law under which the corporation exists has made him a contracting party, but that an opinion of the supreme court of Kansas says that the relation between a stockholder and a corporation creditor is that of a contract. The provision of the federal constitution relates to statutes, judgments, and decrees. These are the things which are to have full faith and credit in the several states. Opinions of courts are not judgments; and although a court, in the interpretation of the statutes of its own state, will be followed by other courts, there is no rule of comity or law that a court should be followed when its opinion is given simply upon its interpretation of general legal principles. Still less would an opinion be binding when it is not a decision, but merely a dictum. It does not appear to us that the opinion of the supreme court of Kansas, which is relied on in this case on the matter of contract, was, as to that question, anything more than a dictum. Howell v. Manglesdorf is the leading case. But the question to be decided was whether execution could be ordered against a nonresident stockholder upon a notice served outside of the state, and the court said that it could not. Incidentally the court said that the liability was statutory, and in the nature of a guaranty. But this was not a question in the case, nor was the statement one which applied to any interpretation of the statute involved in the question at issue. It was only a remark upon the general nature of the liability, in connection with the statement that it was independent of that of the company, and at the close of the opinion the dictum is added that an action may be brought in any state where service can be made. Abbey v. Dry-Goods Co., 44 Kan. 415, 24 Pac. 426, and Howell v. Bank, 52 Kan. 133, 34 Pac. 395, simply decided that stockholders must be sued separately. Plumb v. Bank, 48 Kan. 484, 29 Pac. 699, and Van Demark v. Barons, 52 Kan. 779, 35 Pac. 798, decided that stock must be transferred on the books of the bank. None of these cases decide that a contract arises under the statute, and, even if it did, it would be a decision on general legal principles, and not an interpretation of the statute itself. Assuming, however, that the opinion of the supreme court of Kansas is that the relation of a stockholder to creditors is contractual, it is not a binding opinion upon us; it is not a judgment, to which full faith and credit must be given, under the federal constitution; and, giving to it the high respect which is due to the court from which it comes, it still falls short of establishing, as a matter of pleading in this declaration, the fact of a contract by the defendant, in Kansas, by virtue of the statute. The clause of the constitution of Kansas cited in the declaration does not create, or purport to create, the liability. It is not a self-executing provision, but one which implies that legislation is necessary to carry it into effect. Marshall v. Sherman, 148 N. Y. 9, 42 N. E. 419. The supreme judicial court of Massachusetts overruled a demurrer to a similar declaration in Bank v. Ellis, 166 Mass. 414, 44 N. E. 349; but it did so upon the ground that the declaration set out that the defendant, according to the law of Kansas, was liable to a judgment creditor of a corporation, as upon a contract which is suable anywhere. It does not appear that the court made any examination of the law in Kansas, nor that the decisions upon which the contractual...