Train v. Marshall Paper Co.

Holmes, C. J. This is an action upon two promissory notes made by the defendant, a corporation organized under Pub. Sts. c. 106. At the date of the writ its debts exceeded its capital. The defendant has obtained a discharge in bankruptcy, and the only question before us is whether the Superior Court should have entered some form of judgment against it, notwithstanding the discharge, for the purpose of enforcing the liability of the directors under Pub. Sts. c. 106, § 60. [515] Notwithstanding Loring v. Eager, 3 Cush. 188, and the cases that followed it, we assume, for the purposes of decision, that there is nothing in the bankruptcy law to prevent the entry of a judgment imposing no liability upon the corporation, In re Marshall Paper Co. 102 Fed. Rep. 872, 874 ; 95 Fed. Rep. 419, but we are of opinion that such a judgment does not satisfy the requirement of the Massachusetts statute. Pub. Sts. c. 106, § 62. The language of the section is: “No stockholder or officer in such corporation shall be held liable for its debts or contracts, unless a judgment is recovered against it, and it neglects for thirty days after demand made on execution to pay the amount due,” etc. Evidently the judgment in contemplation is one which will establish a debt and will warrant a legally effective execution. The impossibility of such a judgment because of the insolvency or bankruptcy of the corporation was not contemplated. The reason may have been that, as was pointed out by the judge of the Superior Court, the insolvency or bankruptcy of the corporation would not have prevented' such a judgment when the law was passed. Coburn v. Boston Papier Maché Manuf. Co. 10 Gray, 243. Pub. Sts. c. 157, § 135. Therefore the argument must be that we ought to enlarge the expressed scope of the words by construction, in the belief that the Legislature would have enlarged the expression had the case been presented, or on the presumption that it would have done so because in our opinion that would have been the logical working out of a policy sufficiently expressed. We shall not go into disputes of nomenclature and consider whether the liability of the directors is to be regarded as penal, and we shall assume for the purposes of the case that a special judgment might be framed by the court without more specific authority, if necessary to carry out the meaning of the act. Davenport v. Tilton, 10 Met. 320, 330. But the liability is a statutory liability, and we perceive no clear indication of policy that should carry it beyond the conditions precedent in the form in which they are expressed. In case of bonds given to dissolve attachments, if the defendant was discharged in insolvency or bankruptcy, the court constantly refused to enter a special judgment for the purpose of charging the sureties until such a judgment was authorized by statute. Loring v. Eager, 3 Cush. 188. [516] Carpenter v. Turrell, 100 Mass. 450, 452. Hayes v. Nash, 129 Mass. 62. St. 1875, c. 68. St. 1880, c. 246, § 8. Pub. Sts. c. 171, §§ 23, 24. Hill v. Harding, 130 U. S. 699, 703. It is true that the analogy is not perfect and that the decisions seem to have been put on the effect of the discharge rather than on the construction of the statutory bonds and the acts under which they were given. Perhaps it is more pertinent to point out that in the cases where special judgments have been framed by the court it has been for the very purpose of an execution issuing under them against property attached, “ the cases of suits proceeding to a judgment without the authority to issue execution thereon being very limited in their character, and such as are specially authorized by statute.” • Barnard v. Cushing, 4 Met. 230, 234. The same thing must be true where any possible judgment or execution would be an empty form. Archambeau v. Platt, 173 Mass. 249, 251. We do not regard the case as one which it would be impossible to decide the other way, but we see no sufficient reason for enlarging the words of the statute beyond their obvious meaning. Judgment for the defendant.