Commercial National Bank v. Kirk

Opinion by Me. Justice Elkin, The appellees were stockholders in and directors of a mining corporation of Montana. Under a statute of that state, it is made the duty of. the corporation to make an annual report showing the amount of capital stock authorized, the proportion of the capitalization paid in, and the existing indebtedness, which report is required to be filed in the office of the clerk of the county where the principal place of business is located. In the present case the annual report was not made nor filed as required by the statute. Failure to make and file the report imposes upon the directors a statutory liability to jointly or severally pay the indebtedness of the corporation then existing or any that shall thereafter be contracted until such report shall be made and filed. This suit was instituted in Pennsylvania to enforce against certain of the directors here the collection of an indebtedness of the corporation due the appellant bank in Montana. The right to recover as a personal obligation against directors in this state depends upon the nature of the liability under the Montana statute, which if penal, must be enforced in that jurisdiction. The earlier cases in most jurisdictions regarded such statutes as penal, and suits upon them as actions for jienalties, but the later cases, especially those of the federal courts, which perhaps declare the sounder view of the law, hold that the liability in such cases is contractual in its nature, and [570] such statutes remedial. The leading case declaratory of this doctrine is Huntington v. Attrill, 146 U. S. 657. We have carefully considered this case and the numerous other cases cited by the learned counsel for appellant, and we agree that the weight of authority sustains the general principle announced, but we are not convinced that it can have controlling force in the decision of the present case under the circumstances. It must not be overlooked that the liability sought to be enforced here arises under a Montana statute, and in the first instance we must look to the law of that state to determine its nature, limitation and extent. If the courts of that state had not passed upon the question involved here, it would then be our duty to consider and decide it according to the general principles of law applicable to such cases. But, the supreme court of Montana has passed upon the question in several cases by holding the statute under which the alleged liability in this case arises to be penal, and that its provisions must be strictly construed: Gans v. Switzer, 9 Mont. 408; Elkhorn Trading Co. v. Tacoma Min. Co., 16 Mont. 322; Wethey v. Kemper, 17 Mont. 491; State Savings Bank v. Johnson, 18 Mont. 440. We do not feel at liberty to disregard these decisions of the Montana courts and must conform our administration of the law to them, and this is true independently of what our views on the question involved might be: Ball v. Anderson, 196 Pa. 86. This view of the case makes it unnecessary to discuss the question raised as to the necessity of filing an affidavit of defense. If penal no affidavit is required. The argument of the learned counsel for appellant is able and exhaustive, and if presented to us in the first instance, perhaps convincing, but we are •bound by the Montana decisions as to the penal character of the statute; and if penal, the disposition of the case by the learned court below was clearly right. Judgment affirmed.