La Habra Oil Co. v. Francis

JAMES, J.

This was an action to enforce payment of an assessment levied by the plaintiff corporation. The appeal is taken from a judgment rendered in accordance with the prayer of the complaint.

The appellant held the stock upon which the assessment was levied as trustee for other persons. In the stipulation of facts upon which the case was decided there appears this recitation: “That at the time of the issuance of said certificate No. 133 and the delivery thereof to the defendant, plaintiff knew that the defendant held the stock represented by said certificate as trustee for other persons, a list of whose names was given to plaintiff at the time of the issuance of said certificate.” The main contention upon which we are asked to reverse this judgment is that, as the assessment levied upon the stock held by defendant was an assessment to pay debts of the corporation, no personal liability therefor existed as against this defendant, but that the right to enforce payment of the assessment other than by sale of the stock rested in the corporation only as against the persons for whom defendant was acting as trustee. In other words, that

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a trustee stockholder where he has disclosed to a corporation the names of persons whom he represents is not liable personally to the corporation on account of assessments. We do not believe that either the statute law or the decisions support this contention. It is true that by our code the creditors of a corporation may not proceed to enforce the stockholders’ liability against pledgees or trustees. It is expressly provided in such cases that the equitable owner, and not the trustee, is liable. (Civ. Code, sec. 322.) Section 313 of the same code provides that whenever a pledgor or beneficial owner fails to represent stock at a stockholders’ meeting, the trustee may vote it. Our supreme court has declared that a trustee must be deemed the legal owner of the stock and “as against the corporation and all the world, except his

cestui que trust,

no inquiry may be had touching his actions in the premises.”

(Market Street Ry. Co.

v.

Hellman,