Garrigue v. Arnott

80 Ill. App. 24, 1898 Ill. App. LEXIS 364

• Court: Appellate Court of Illinois
• Decided: January 24, 1899
• Status: Published

Opinion

Mr. Justice Horton

delivered the opinion of the court.

It is contended on behalf of appellant that “ the most serious error ”—to use the language of the attorney—appearing in this record, is the holding, in effect, that the decree of the Michigan court is binding upon appellant, and is in material respects res adjudicaba as to him.

That decree is binding as to certain corporate matters. Appellant was nota party to that suit. The decree in that case does not order or make an assessment upon the stockholders or the subscribers for stock. Counsel for appellee state definitely that the case at bar is to recover as against appellant upon the ground that he is liable as a subscriber without regard to the question of what amount of stock, if any, was issued to or held by him.

It certainly would be competent for appellant to show that he was not and never had been such a subscriber, or that he had paid his subscription in cash in full. A finding by the Michigan court in a case to which appellant was not a party, could not, as to him, be res adjudicaba as to such questions. This seems to us to be so fundamental a principle that no authorities need be cited. But see Pennoyer v. Neff, 95 U. S. 714; and Gt. W. Tel. Co. v. Purdy, 162 U. S. 329.

Upon the trial appellant, being called as a witness and having stated that stock in said company of the par value of $6,000 had been issued to him, was asked this: “ Did you pay anything for this stock % ” The witness answered the question, although it was objected to by appellee’s attorney upon the ground that that had been adjudicated, and the objection was sustained.

Counsel for appellant then offered to prove that appellant paid the company $6,000 in cash for the stock issued to him. There were numerous other questions asked and offers made by appellant, which present the same question of law, but which need not be here stated at length. The ruling by the trial court was that there had been a finding upon these questions in the Michigan case, and that such finding and the decree thereon by the Michigan' court were res adjudicaba as to appellant. This case was tried upon that erroneous theory.

The original subscription of appellant was for the sum of $10,000. If he had paid the same in full in cash to the company it would hardly be contended that he could not show that fact, because a court in another jurisdiction, in a case to which he was not a party, had decreed that such subscription had not been paid. Appellant offered to prove that he had received only $6,000 of stock at par value, and that he had paid to the company $6,000 in cash therefor. The most that could be claimed is that he still owed $4,000. But the judgment is for $5,500.

We do not deem it to be necessary for us to review in detail the great number of cases in which the liability of stockholders or subscribers for stock is considered. Great Western Tel. Co. v. Purdy, ante, is in the facts very like the case at bar. It is a suit brought in Iowa by a receiver appointed by an Illinois court to recover upon an assessment upon stockholders. Mr. Justice Gray, speaking for the court, says (p. 337): “ In this action, therefore, brought by the receiver in the name of the company, as authorized by the order of assessment, to recover the sum supposed to be due from the defendant, he had the right to plead a release, or payment, or the statute of limitations, or any other defense going to show that he was not liable upon his contract of subscription.” Appellant had the same right in the case at bar, but he was not permitted to make that defense.

The judgment of the Superior Court is reversed and the cause remanded.