Young v. Rosenbaum

Rhodes, C. J., delivered the opinion of the Court, Sprague, J., Wallace, J., and Temple, J., concurring :

The defendants, who are sued as stockholders in the corporation known as the “Santa Cruz Silver Mining Company,” set up, as a defense to the action, a judgment in favor of the plaintiff and others against the corporation, rendered by the Court of First Instance, in La Paz, Lower California, by which it is ordered, among other things, that “the aforesaid creditors are sentenced to wait one year from this date, in order to receive their respective claims and interest thereon. ” The defendants offered in evidence the judgment, and the plaintiff objected to its admission, because the document offered was not a copy of the whole record. In the absence of proof of the rules of law governing that Court, in the administration of justice,' it will be presumed that a plaintiff in an action is required to present to the Court his cause of action in wilting. A judgment rendered without a statement of the cause of action, in some form recognized by law, whatever may be its force and effect, where it is rendered, is of no value beyond the jurisdiction of the Court which rendered it. Bo authority to the contrary is cited by [654]the defendants, and, indeed,. it would seem impossible to maintain in any forum a judgment, unlesá it was based upon a complaint, or a statement of the cause of action of the party in whose favor it was rendered. In proving the judgment, a judgment roll, as recognized at common law, or provided for by statute, might not be requisite; but a record must be produced which shows the allegations of fact, on which the Court proceeded in rendering the judgment. The objection should have been sustained.

Had the judgment been proven, it would not have constituted a bar to the action. The stockholders are not sureties of the corporation, but are principal debtors. (Mokelumne IIill, etc., v. Woodbury, 14 Cal. 265; Davidson v. Rankin, 34 Cal. 503.) A judgment against the corporation does not extinguish or suspend the liability of the stockholders, and it clearly does not merge it. The remedy against the corporation may, for some cause, be suspended, or, perhaps, barred, without impairing the remedy against the stockholders, because the liability of the latter is primary, and is conditional or contingent only in this : that there must be a subsisting debt against the corporation. When a debt accrues ¿gainst the corporation, it also accrues against the stockholders, and they remain such debtors until the debt is paid or satisfied. Whatever satisfies or extinguishes the debt as to the corporation, extinguishes, also, the liability of the stockholders, because the creditor can claim only one satisfaction of the debt. But a suspension of the remedy against the corporation, does not extinguish the debt, and therefore the liability of the stockholders is unaffected.