Putnam v. Misochi

• Decision Date: 28 November 1905
• Citation: 189 Mass. 421,75 N.E. 956
• Parties: PUTNAM v. MISOCHI et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

189 Mass. 421

75 N.E. 956

PUTNAM v. MISOCHI et al.

Supreme Judicial Court of Massachusetts, Suffolk.

November 28, 1905

COUNSEL

H. V. Cunningham, for plaintiff.

Arthur H. Russell and Manson, Hall & Coville, for certain defendants.

Geo Libby, for defendant Hoak.

OPINION

KNOWLTON, C.J.

This is a bill in equity brought against certain stockholders of a corporation organized under the laws of Maine, to obtain contribution towards the payment of a judgment against the corporation, made by the plaintiff, under a liability created by the statutes of that state. The plaintiff failed to make full payment for his subscription to the capital stock of the corporation, and was therefore liable for the corporate debts, under Rev. St. Me. c. 46, §§ 37, 38, 44-47, to an amount equal to the sum left by him unpaid. For the same reason each of the defendants was equally liable for these debts. Each had subscribed for the same number of shares of the capital stock, and had made the same payment for them.

It is a familiar principle that when several parties are equally liable for the same debt, and one is compelled to pay the whole of it, he may have contribution against the others to obtain from them the payment of their respective shares. This right to contribution is not founded upon contract, but upon a principle of natural equity and justice. To use the language of the court in Aspinwall v. Sacchi, 57 N.Y. 331-334: 'The doctrine of contribution rests on the principle that where the parties stand in equali jure, the law requires equality, which is equity; and one of them shall not be obliged to bear the burden, in case of the rest. It is founded, not on contract, but on the principle that equality of burden as to common right is equity, and the obligation to contribute arises from the nature of the relation between the parties.' See, also, Stone v. Fenno, 6 Allen, 579; Cary v. Holmes, 16 Gray, 127; Ray v Powers, 134 Mass. 22; Merrill v. Prescott, 67 Kan. 767, 74 P. 259; 1 Story's Eq. Jur. §§ 493, 495; 7 Am. & Eng. Encl. of Law (2d Ed.) 363. The principle has long been applied to the liability of stockholders in corporations for the corporate debts. In 1 Cook on Corporations (5th Ed.) § 211, we find the law stated as follows: 'A court of chancery will compel the subscribers to pay in full the amount of their unpaid subscriptions, if the corporate indebtedness makes it necessary, leaving them to seek contribution from the other stockholders. The rule, however is well settled that a stockholder who has been compelled to pay more than his proportion of the debt of the company may maintain an action against his co-stockholders for contribution.' The neglect of a subscriber for stock to pay for it in full is not a tort, which deprives him of his right to contribution, but it leaves him in the position of a surety, who is liable for a debt equally with other sureties. Nickerson v. Wheeler, 118 Mass. 295. This is recognized in the numerous suits for contribution by stockholders which are sustained by the courts. This case is therefore one of a common class, in which a plaintiff's right to relief is plain, unless there is something peculiar in the facts that the corporation was established in another state and that the original liability arose under the laws of that state. In this respect there is nothing in this case materially different from the liability, under the laws of other states, which has been enforced repeatedly by this court in other cases. While this liability for corporate debts is statutory in terms, it is contractual in its nature. In this respect it is like the liability referred to in Broadway National Bank v. Baker, 176 Mass. 294, 57 N.E. 603, in Howarth v. Lombard, 175 Mass. 570, 56 N.E. 888, 49 L. R. A. 301, in Hancock National Bank v. Ellis, 172 Mass. 39, 51 N.E. 207, 42 L. R. A. 396, 70 Am. St. Rep. 232, in Whitman v. Oxford National Bank, 176 U.S. 559, 20 S.Ct. 477, 44 L.Ed. 587, in Hancock National Bank v. Farnum, 176 U.S. 640, 20 S.Ct. 506, 44 L.Ed. 619, and in Flash v. Connecticut, 109 U.S. 371, 3 S.Ct. 263, 27 L.Ed. 966. Such a liability, unless an exclusive mode of enforcing it under local laws is prescribed by the...