Bidwell v. Babcock

25 P. 752, 87 Cal. 29, 1890 Cal. LEXIS 1090
California Supreme Court·Decided December 12, 1890·No. No. 13695·Published·Cited by 10 cases

Opinion

Vanclief, C.

The defendant was sued as a stockholder of a corporation,—the San Diego Street Oar Company,—under section 322 of the Civil Code, to recover his proportionate part of certain alleged indebtedness of the corporation. His demurrer to the complaint was [30] overruled, and upon his failure to answer, judgment was rendered against him by default. This appeal is from the judgment on the judgment roll, and the overruling of the demurrer is assigned as error.

The complaint embraces three causes of action: 1. Indebtedness of the corporation for goods sold and delivered by the plaintiff “during the time” between December 6, 1888, and January 23, 1889; 2. Indebtedness of the corporation to H. L. Shaug, for goods sold and delivered by him, during the same time, assigned to the plaintiff; and 3. Indebtedness of the corporation to Morris and Breadlove for goods sold and delivered by them during the same time, assigned to plaintiff. The indebtedness of the corporation, alleged in the three causes of action, amounts to $858.72.

After properly stating the organization of the corporation, its existence during the time within which the indebtedness was incurred, and that its whole capital stock consisted of two thousand five hundred shares, of the par value of one hundred dollars per share, the complaint proceeds as follows:—•

“4. That a large number of shares of said stock, to wit, 2,170, were subscribed for, issued to, and owned by the various parties who were the owners of said stock, as hereinafter specified, during the time between the sixth May of December, 1888, and the twenty-third day of January, A. D. 1889, both days inclusive, between which dates the debts hereinafter set forth were incurred.”
Then, after alleging the indebtedness of the corporation as above indicated, comes the ninth paragraph, as follows:—
“ 9. That during the time mentioned in paragraph 4 of this complaint, to wit, between December 6, 1888, and January 23, 1889, the defendant, E. S. Babcock, Jr., was the owner of, to wit, 972 shares of the capital stock of said San Diego Street Car Company, and is indebted to [31] plaintiff herein in the sum of, to wit, $384.91, under-section 322 of the Civil Code of California, and other laws of the state of California; that said sum has been demanded of defendant, but he has refused to pay the same, or any part thereof.”

The allegations as to the organization and existence of the corporation, the amount of its whole capital stock, and in regard to the portion thereof subscribed, and the portion thereof owned bj- the defendant, are made only in connection with the first cause of action. None of them is repeated or referred to in connection with the second or third cause of action, as alleged in paragraphs 7 and 8 of the complaint.

The grounds of the demurrer are stated as follows:

"1. That the said complaint does not state facts sufficient to constitute a cause of action; 2. That the said complaint is uncertain, ambiguous, and unintelligible in this, that it does not appear therefrom what number of shares of the capital stock of the San Diego Street Car Company had been subscribed for at the time of the creation of the alleged indebtedness mentioned in said complaint; nor does it show what proportion the amount of stock and shares of stock alleged to be owned by the defendant bears to the whole of the subscribed capital stock of the San Diego Street Car Company; nor does it show what proportion the stock of the defendant bore to the whole subscribed stock of said company at the time of the creation of such alleged indebtedness; nor does the said complaint show what proportionate part of each of the several sums of indebtedness of the San Diego Street Car Company shown in said complaint is the liability of the defendant.
“ 2. Defendant also demurs to that portion of said complaint contained in the paragraph thereof numbered 7, upon the ground that the same attempts to set forth a separate cause of action against this defendant, and that the same does not state facts sufficient for that purpose.
[32] “ 3. On the same grounds stated in the above specification of demurrer Mo. 11, the defendant demurs to that part of the plaintiff’s complaint contained in the paragraph thereof numbered 8.”
The constitution of 1879 (art. 12, sec. 3) provides: “ Each stockholder of a corporation .... shall be individually and personally liable for such proportion of all its debts and liabilities contracted or incurred during the time he was a stockholder as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock or shares of the corporation.”

Section 322 of the Civil Code, as construed by this court, has substantially the same meaning and effect as the above quotation from the constitution.

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Bidwell v. Babcock, 25 P. 752, 87 Cal. 29, 1890 Cal. LEXIS 1090 (Cal. 1890).

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