Morrow v. Superior Court

Sharpstein, J. The principal question in this case is whether, before the adoption of the present Constitution, one having a claim against a life insurance company, incorporated under the Act of April 22, 1866 (Stats. 1865-66, p. 752), could [385]bring and maintain iii the Justices’ Court an actipn against;a stockholder in such incorporation, whose proportionate share of such liability would be less than three hundred dollars.

Whether he could or not depends very much on the construction to be given to section 17 of said act, which is as follows: “ Each stockholder of the company shall be individually and personally liable for such proportion of all its debts and liabilities as the amount of its capital stock owned by him bears to the whole of the capital stock.”

In the brief of counsél for petitioner it is said that, “In any action to enforce this liability it is necessary that there should be ascertained and determined:— . .

“ First. The amount of capital stock of the corporation.

“ Second. The amount of this capital stock owned by each stockholder.

“ Third. The total amount of debts and liabilities of the corporation.

“Fourth. The proportion of such debts and liabilities for which each stockholder is liable.”

And it is further said that, “this cannot be done in.a common-law action.”

But if an individual creditor can maintain an action against an individual stockholder for such proportion of the. indebtedness of the company .to such creditor, as the stock .of such stockholder bears to the whole of the capital stock' of such .company, it would only be necessary in such action to ascertain the whole amount of the capital stock of such company, the amount owned by the stockholder sued, and the amount of the indebtedness of the company to the creditor suing such stockholder. This could be done quite as well.at law as in equity.

The first clause of section 16 of the Act of April 14, 1853, as amended by the Act of April 27,' 18.63, read as.follows:. “Each stockholder shall be individually and personally liable' for his proportion of all the debts and liabilities of the company contracted or incurred during the time' that he was a stockholder, for the recovery of which joint or several actions may be prosecuted.” ;