Spence v. Shapard

STONE, J. Under a New York statute, “relative to corporations for manufacturing purposes,” passed March 22, 1811, the following provision is found: “ That for all debts that shall be due and owing by the company at the time of its dissolution, the persons then composing such company shall be individually responsible to the extent of their respective shares of stock in the said company, and no further.” See 2 [Revised Statutes, edition of 1859, 654, § 7. Under this statute many rulings were had in the several courts of New York, and the following, among other principles, were laid down, and have ever since been steadily adhered to: That when the corporation is dissolved, the liability of the stockholders to the creditors becomes primary and absolute ; that it is not necessary first to sue the corporation, or to aver or prove its insolvency; that when the creditor sues a single stockholder, he can maintain an action of assumpsit or debt, and that when he proceeds against two or more stockholders, he can maintain a bill in equity.—Slee v. Bloom, 19 Johns. 456; Briggs v. Ferriman, 8 Cow. 387; S. C. Hopk. 300; Simonson v. Spencer, 15 Wend. 548; Bank of Poughkeepsie v. Ibbotson, 24 Wend. 473; Van Hook v. Whitlock, 3 Paige, [600] 409; Perkins v. Church, 31 Barb. 84; Diven v. Duncan, 41 Barb. 520; Garrison v. Howe, 17 N. Y. 458; Stover v. Flask, 30 N. Y. 64; see, also, Bullard v. Bell, 1 Mason, 243; Matthews v. Albert, 24 Md. 527; Pollard v. Bailey, 20 W. 520. Section 1478 of the Code of 1852, (Bevised Code, § 1760,) relating to the same subject, is a copy, less some unnecessary words, of the provision of the New York statute copied above. Its language is, “ The stockholders of any such corporation are liable for all debts due by it at the time of its dissolution, to the extent of their stock.” We think the present bill can be maintained, without averring the insolvency of the corporation, and without previous suit against it. ¥e have declined to follow the New York rulings, so far as they hold that an action at law may be maintained by creditors against individual stockholders.—Smith v. Huckabee, 53 Ala. 191. The present bill was filed against two persons, charging that they were stockholders of a corporation, named and called “ The Alabama and Georgia Contracting Company,” whose business was “ contracting for and building and constructing railroads in the States of Georgia and Alabama.” It charges that one of the remaining stockholders was dead, and that the other two named were non-residents of Alabama. That on or about February, 1872, said corporation “ became indebted to complainant in the sum of one hundred and sixty dollars, for wood sold and delivered by complainant to the corporation,” which debt is unpaid; that the shares of defendants in said corporation were ten thousand dollars each, and that said corporation has been dissolved. There are few manufacturing or mechanical enterprises that do not need and employ wood in connection with their business. We can not say, as matter of law, on demurrer to complainant’s bill, that the contract charged is ultra vires, and without the power of the corporation to contract. The bill is sufficiently definite, and contains all necessary averments to entitle complainant to the relief he prays, and the demurrers to it should not have been sustained. Beversed and remanded.