Hampson v. Weake

4 Iowa 13

Opinion

"Woodward, J.

[1]

The first question is, whether the injunction was properly granted. The District Court had jurisdiction of the subject matter, and personal service was made on the president and several directors of the corporation. Thus far, therefore, there is no question. But the petitioners complain that in the proceeding to charge the members of the corporation, they had no notice, and, therefore, as we understand, they intend to infer that the j udgment ordering execution against them, is invalid. The Constitution, (Art. 8, § 2,) provides that: “ The stockholders (of corporations) shall be subject to such liabilities and restrictions as shall be provided by law.” By the common law, the stockholders of a corporation were not liable for the debts of the corporate body. This provision of the constitution was undoubtedly intended to render them liable in such degree and manner as the legislature should see proper. The legislature has accordingly directed that in such case, the officers of the corporation shall be summoned in, to show cause why the property of the members should not be held liable. These officers or managers, are chosen by the members, and would always, probably, be stockholders themselves, and so liable with others, so that the interest of all is, in some fair measure, represented. The statute did not intend to drive the creditor to the inconvenience, expense and delay of suits against all or any of the stockholders, after he had obtained his judgment against the corporation. We do not regard this provision of the law as either unconstitutional or unreasonable. The District Court having acquired jurisdiction, all the other questions suggested by the complainant, were, within the province of that court to decide. It is not very clear that this court need to have noticed the above question concerning the proceedings in connection with the constitution,-but we have adverted to it so as to leave no doubt. The other grounds upon which the application for an injunction was based, were the following: That the private property of the members was exempt. This involved a judicial construction of §§ 6 and 26, of the act of 1847. Another was, that the proceedings, to render the stockholders liable, should have been conducted under the Code, and not under the act of 1847. Supposing them different, this admits of a question. A third was, that the court could not render them liable for more than the amount of their stock. A fourth ground was, that they were liable, even to the company, only on certain previous conditions, such as the advertisement of the calls for 'installments. It is very manifest that all these questions were for the court to determine before it rendered j udgment that execution issue, and that its judgment upon them, is conclusive, unless an appeal be taken. The proceeding now before us seeks to convert a bill praying for an injunction, into a writ of error, to inquire into and correct the proceedings and judgment of the District Court. It does, as is alleged by counsel, seek to go behind the judgment of the court awarding the execution against the property of the members. And this is a judgment, quite as much as the judgment for the debt, against the company. The proceedings and judgment of the court within its jurisdiction, cannot be inquired into and set aside in this manner. See 1 Pet. 328; Elliot v. Piersoll, 2 Pet. 157; Thompson v. Tolmie, 3 Pet. 193; Ex parte T. Watkins, 6 Pet. 691; U. States v. Arredondo, 10 Pet. 473; Voorhees v. The Bank of United States, 2 Howard, 319; Grignon's Lessee v. Astor et al., 11 M. R. 227; Wright v. Marsh et al., 2 G. Greene, 95.

The case has been unfortunately delayed in this court, through causes which no one could control. One of the members of the court having been of counsel, could take no part in its adj udication. The other two differed in opinion, upon some of the questions presented. A change having taken place, it is desired to bring the suit to a close. Whilst the causes assigned by the petitioners for injunction as grounds for its dissolution, either are not sufficient for that effect, or do not come to us in such manner that we can properly consider them, yet there is one, not presented, which is worthy of notice. The j udgment was recovered against the corporation, and not against individuals. But such proceeding's were had, that in accordance with the statute, as we may for the present assume, the court rendered judgment (or ordered) that an execution issue against the property of the members. But there is no judgment against persons as members. There is no adjudication that certain persons were such; The execution, therefore, should follow the judgment, and run against the corporation, with a clause that it be levied on the' property of the members. The clerk should not undertake to adjudicate on their membership, by causing the execution to run against them personally, but should leave the officer to ascertain who are members, as he may. And thus leave the party also to his proper remedy, if he believes himself not' liable, or to his other proper course, if he is liable. The execution was, therefore, irregularly issued, and for this reason, at least,-was properly stayed by the injunction. Although one of us is not entirely satisfied with this view, nevertheless, as the cause comes to us in a manner unfavorable for reaching some of the questions, and as the object of this particular-proceeding has passed by, we have concluded to place it upon the foregoing ground, hoping that if another case is presented upon the same matters, we shall be able to reach the true questions, and shall have the benefit of a full bench in their consideration. The judgment of the District Court in dissolving the injunction, is reversed.

Wright, C. J., haying been of counsel, took no part in the decision of this cause.