Rocky Mountain National Bank v. . Bliss

Sapallo, J. The twenty-fourth section of the General Manufacturing Law of 1848 (Chap. 40) has been construed in the case of Handy v. Draper * decided at the present term, and it is there held that the return of an execution unsatisfied against the corporation is a condition precedent to the right of a creditor to bring an action against a stockholder, and that this condition applies to the case of a continuing stockholder as well as to that of one who has ceased to be such. The proceeding against the company in Colorado was not a compliance with this condition. It was a proceeding in rem, which affected only the property there attached, and the execution issued was only against that specific property. (Dix v. Briggs, 9 Paige, 595 ; Crippen v. Hudson, 13 N. Y. 161; Thomas v. Merchants' Bank, 9 Paige, 216.) But, in addition to that objection, we think that the statute requires the recovery of a judgment and the issue of an execution in this State. In requiring the creditor to exhaust his legal remedies against the corporation, before resorting to the personal liability of the stockholders, the statute could not have contemplated that the recovery of a judgment and issue of an execution against the company in any State of the Union should be a compliance with the condition. The legal remedies afforded by the courts of this State, where the corporation was created and is domiciled, are those which the legislature must be deemed to have intended. Such is the construction given to a similar provision in respect to creditors’ bills, and although the cases are not precisely the -same, we think that they strongly confirm the view that when a statute of this State requires, as a condition precedent to further proceedings in its courts, that an execution against the property shall first have been issued, it means that such execution shall have been issued out of a court of this *343 State of general jurisdiction. (Tarbell v. Griggs, 3 Paige, 207; Dix v. Briggs, supra ; Crippen v. Hudson, supra.) The judgment should be affirmed. All concur. Judgment affirmed. Footnotes [*] Ante, p. 334.