May v. Black

45 N.W. 949, 77 Wis. 101, 1890 Wisc. LEXIS 176
Wisconsin Supreme Court·Decided May 20, 1890·Published·Cited by 14 cases

Opinion

OetoN, J.

This action was commenced by the respondent on a demand for work and labor, and in behalf of all others having like claims who may come in and become co-plaintiffs, against the Nanaimo Mining Company, a corporation organized under the laws of the state of Michigan, and John G. Black and others, stockholders of said corporation residing in this state or amenable to the process of the court. The action is in equity, and the prayer is that the defendant stockholders be decreed and adjudged to pay into court, for the use of the plaintiffs, the amounts due each for such work and labor. No judgment is demanded against the corporation, and it did not appear in the action. It is alleged in the complaint that the corporation is insolvent, and that all of its property has been sold to pay its creditors in attachments. The judgment is at law, that the plaintiff and five others who had become co-plaintiffs “ have and recover against the defendant John O. Black $1,838.34 and costs, and against John S. McDonald, $529.74 [103] and. costs, and that execution issue in due form of law.” The defendant John O. Black held, stock as assignee of the said McDonald at the time the labor claims for which judgment was rendered against him accrued, and the defendant McDonald held the same stock when such claims for which judgment was rendered against him accrued, and said Black was not a stockholder when the suit was commenced, but the said McDonald was. The said Black was the cashier of the Continental National Bank of Chicago, and. held the stock as such cashier, by assignment from McDonald, as collateral security for a loan made by him of the bank, and not otherwise.

The important questions of law in the case were, therefore: (1) Were,the stockholders at the time the debt accrued hable, or those who were such when the action was commenced, or are the stockholders of this corporation lia-' ble as copartners or sureties? (2) Could Black be held hable, holding such a relation to the stock and the bank? (3) Is this the proper remedy and in the proper jurisdiction? On this appeal these questions were argued before this court by the respective and learned counsel with great force and ability. The third question, of remedy and jurisdiction, should stand first. If this court should hold that the plaintiff has mistaken his remedy or pursued it in the wrong tribunal or jurisdiction, it would be neither necessary nor proper to decide the first two questions. "We are compelled by the authorities and the reasons on which they are based to hold in the negative as to both questions.

1. This is a corporation of the state of Michigan, and the liability of its stockholders, and the manner of its enforcement, are governed by the laws of that state. It is a special statutory liability, to be enforced by statutory remedies. Sec. 35, No. 113, of the Public Acts of 18 YT, of that state, the general law under which this corporation was organized, provides that “ the stockholders of all corporations existing [104] hereunder shall be individually hable for all labor performed for such corporation, which said liability may be enforced by action in assunypsit commenced within two years from the time when payment for such labor became due, and not afterwards.” It would seem that an action against stockholders for such labor claims ought to be brought under this statute. But it is contended by the learned counsel of the respondent that, inasmuch as the constitution of that state created this liability without providing any special remedy or method of enforcement, it may be enforced by the usual remedies for the enforcement of any such general liability. The constitutional provision is that “ the stockholders of all corporations and joint-stock associations shall be individually hable for all labor performed for such corporation or association.” It was held in Hanson v. Donkersley, 37 Mich. 184, that this liability is not prim-wry but collateral, and in a suit under the statute the statutory conditions must be fully complied with; and in Peck v. Miller, 39 Mich. 594, it was held that, if the constitutional provision is sufficient to execute itself, it can be only by some proceeding in equity, but that there is no remedy at law to do' complete justice in such a case without some aid of statutes.

In Morley v. Thayer, 3 Fed. Rep. 737, it is held by Judge Cliefobd that a similar constitutional provision of Massachusetts could not execute itself, and required legislation to carry it into effect by prescribing the means and mode of its enforcement, and that it is clear that the statutes passed in fulfilment of that requirement constitute the unmistakable rule of decision, and furnish the only basis of judicial action. To the same effect are Fusz v. Spaunhorst, 67 Mo. 256; French v. Teschemaker, 24 Cal. 518; and Groves v. Slaughter, 15 Pet. 449. It is inconceivable how any remedy could be effectual without the aid of statutory provisions. But the plaintiff is estopped from so claiming by his complaint, [105] that predicates the action on the statutory liability and refers to the statutory proceedings of the corporation by wbicb the liability was incurred. The action is brought under the statute, and, as a matter of course, the statute must be complied with. The remedy provided by the statute is exclusive of all others. “ The statute which creates the corporation may also declare the purpose of its creation, and provide for the manner of its enforcement.” Pollard v. Bailey, 20 Wall. 520. “Where the statutes of the state which creates a corporation, making the stockholders liable for the corporate debts, provide a special remedy, the liability of a stockholder can be enforced in no other manner.” Fourth Nat. Bank v. Francklyn, 120 U.S. 747. “Where the statute prescribes expressly the form of the remedy it is the well established rule that that remedy was intended by the legislature to exclude every other, and it must be strictly pursued.” Cook, Stock, § 220, and cases cited.

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May v. Black, 45 N.W. 949, 77 Wis. 101, 1890 Wisc. LEXIS 176 (Wis. 1890).

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