Benson v. Silvey

Canty, J. This is an appeal from an order overruling a demurrer to the complaint. The ground of demurrer was that the court has no jurisdiction of the action. The complaint alleges that the Iron River Brownstone Company is, and during the times therein specified was, a corporation organized under the laws of Wisconsin; that plaintiff performed manual labor and services for it, at its request, between specified dates, not six months apart, of the value of $69.20, which is unpaid; that during all of said times the defendants were, and still are, stockholders in said corporation; that each of them then held, and still holds and owns, shares of such capital stock of the par value of $1,000; that section 1769 of the Wisconsin Statutes, as compiled and published in 1S89, is as follows: “The stockholders of every corporation, other than railroad corporations, shall be personally liable to an amount equal to the stock owned by them respectively in such corporation, for all debts which may be due or owing to its clerks, servants and laborers for services performed for such corporations, but not exceeding six months’ service in any one case.” Under a statute somewhat similarly worded, the Supreme Court of Wisconsin holds the liability of the stockholder to be primary and absolute, attaching at the moment the debt is contracted. Coleman v. White, 14 Wis. 762. This action was brought in the Municipal Court of Duluth. The statute provides that the jurisdiction of that court shall not extend to any action “wherein the relief demanded in the complaint is equitable in its nature.” Sp. Laws 1891, ch: 53, § 2. Appellants do not contend that the courts of this state cannot enforce the statutory liability of the stockholders of a foreign corporation, but claim that it cannot be done in an action at law; that an action to enforce a stockholder’s liability must be an equitable action, involving all the creditors and all the stockholders; and [77] that, therefore, the Municipal Court has no jurisdiction. It is true that the fund provided by the stockholders’ liability is limited to the amount of the capital stock, and that, where a fund thus limited is provided for creditors, it belongs to all of them alike, to the extent of their claims, and if insufficient, in proportion to their claims, that they are tenants in common in the fund; and that the action should be by, or in behalf of, all the creditors against all of the stockholders. Conceding this, it does not follow that the right of each creditor to the fund is an absolute property right, or that this is anything more than a rule applied as far as practicable in equity proceedings, and which may be modified when obstacles to its application exist, such as the nonresidence of some who are proper or necessary parties to the action. If an action will lie in this state on the liability of such stockholder in a foreign corporation, it ought to be a sufficient excuse for failing to bring in necessary parties that they are beyond the jurisdiction of the court. Conceding that the complaint in this action should have stated some excuse for not making the other stockholders parties defendant to this suit, the failure to do so is merely a defect of parties defendant; and conceding, also, for the purpose of argument, that the action should have been brought by all of the creditors, the failure of the other creditors to join is merely a defect of parties plaintiff. These defects can be waived by failing to' object to them either by demurrer or answer. Suppose the defendants thus waive these defects, if such they are, and the action proceeds to judgment against them. Will that judgment be void for want of jurisdiction? If not, then a demurrer will not lie on such ground. We are clearly of the opinion that such judgment would be valid. This is not an equity action, but an action at law, of which the court below has jurisdiction, if permitted to proceed. It seems to us that the real position of appellants is that they have demurred, not because this is an equity action, but because it ought to be. The fact that plaintiff brings an action at law, of which the court has jurisdiction, when it appears that he should have brought an action in equity, of which the court would not have had jurisdiction, does not make the complaint de [78] murrable for want of jurisdiction. The remedy is by demurrer on other grounds, or by making the objection by proper allegations in the answer. The order appealed from is affirmed. Giijítllan, C. J., took no part. (Opinion published 60 N. W. 847.)