Merrimac Mining Co. v. Bagley

14 Mich. 501, 1866 Mich. LEXIS 64

• Court: Michigan Supreme Court
• Decided: October 23, 1866
• Status: Published

Opinion

Campbell J.

The only question presented for decision in this case is, whether a stockholder, who was not one of the original subscribers to a mining corporation, organized under the general mining law, is liable for the balance due upon assessments, after applying the proceeds of stock sold for default.

It was held by this Court, in Carson v. The Arctic Mining Company, 5 Mich. 288, that an original subscriber was liable for such deficiency, after his stock had failed to bring enough to clear off the assessment for which it was sold. There was nothing in his subscription beyond the single act of taking so much stock in the company when it was formed.

Subscribing, then, meant nothing more than becoming an original stockholder; and the duty to pay, which was held by the Court to rest upon him, sprang solely from that relationship.

There is no principle of law which can establish any difference among stockholders, in the duties which are implied from that relation. The very essence of a corporation consists in its corporate succession, which, in stock companies, is kept up by the substitution of one owner for another in the proprietorship of shares. If the original stockholders stand under different relations to the company from their assigns, the corporation itself loses some of its attributes by the substitution, or else becomes introduced into, more complicated relations. It seems to be an unavoidable conclusion, that every liability which attaches to a stockholder, as such, is inseparable from the ownership of the stock.

There is nothing in any of our statutes from which any different rule can be deduced. The stockholders, whose rights are recognized in fixing upon the sale of stock for assessments, are always the owners of the shares involved. In the section of the general mining law, providing for such sales, there is no reference Avhatever made to original subscribers who have sold their stock, although, if they were liable to respond, they would be especially interested in a matte)’ Avhere a want of notice might involve them in serious loss. — See Comp. L. § 1809.

The case of Carson v. The Arctic Mining Company, having been decided with reference to the law under which the plaintiff was incorporated, and having established the responsibility of original stockholders, must, upon the grounds stated, govern this controversy also, as the questions, as we view them, are identical in both suits.

The judgment, upon the agreed state of facts, must be reversed, and a new judgment entered in this Court for one hundred and fifty dollars damages, with costs of both courts.

The other Justices concurred.