Kennedy v. California Savings Bank
Before: Haven, McFarland
Synopsis
Corporations — Action against Stockholder — Attachment — Contract. — An action against a stockholder,of a corporation to recover his proportion of a debt of the corporation is an action upon a contract, within the meaning of section 537 of the Code of Civil Procedure, relative to attachment.
Id. — Stockholder’s Liability—Construction or Constitution—Agency of Corporation for Stockholders. — The legal effect of the condition prescribed by section 3 of article.XII. of the constitution of this state, regulating the individual liability of stockholders for debts contracted and liabilities incurred by the corporation, is, that a corporation when created becomes the agent of its stockholders to make such contracts and incur such liabilities as are authorized by law and its articles of incorporation, and the contracts which it thus makes hind the stockholders to the extent named.
Id.—Joint Action — Writ op Attachment — Amount in Excess of Demand against Stockholder — Discharge of Writ. —Where the complaint demands different amounts from the several stockholders of a corporation, who are jointly sued as co-defendants with the corporation, a writ of attachment issued thereon must conform to the complaint and direct the attachment of so much property of the respective defendants as will secure the amount alleged to be due from each. If the writ is issued against the property of any defendant for an amount exceeding the demand made against him in the complaint, the writ mast be discharged as to such defendant, on his motion, even though no more of his property is attached than is sufficient to satisfy the demand against him.
Opinion — Haven
De Haven, J. This is an appeal from an order dissolving an attachment. The action is upon certificates of deposit issued to plaintiff by the defendant the California Savings Bank, a corporation in which the other [95]defendants are the stockholders, and the relief demanded is for a judgment for the amount of money represented by such certificates, and against each of the defendants for the proportionate part thereof for which he is liable as a stockholder.
The motion to dissolve the attachment was made by the defendant Haver male alone, and was upon these grounds: 1. That said action is upon a statutory liability, and not upon a contract; 2. That the writ of attachment, in its statement of plaintiff’s demand against him, is not in conformity with the complaint.
These grounds are widely different, the first going to the right of the plaintiff to any attachment in the action, and the last relating only to an irregularity in the writ itself which could be avoided by the issuance of another, and unless it was the intention of the court to sustain the motion upon the first ground, it should have specified in the order granting the same that it was based upon the latter ground alone, thus leaving the plaintiff free to take the proper steps in the action to procure the issuance of a writ conforming to the complaint. The order of the court was general, and it is therefore necessary to examine both grounds of the motion, in order to fully dispose of all questions affecting the right of the plaintiff to an attachment in the action.
1. The first ground stated in the motion presents the question whether an action against a stockholder for his proportion of the debt of a corporation of which he is a member is upon a contract, within the meaning of section 537 of the Code of Civil Procedure, relative to attachment; and that it is such an action, we entertain no doubt. In a general sense, the action is founded upon a contract, and it is none the less so because under the provisions of section 3 of article XII. of the constitution of this state and section 322 of the Civil Code the stockholder is made liable to perform the contract in part. The constitution, in the section above referred to, declares : —
“ Sec. 3. Each stockholder of a corporation or joint-[96]
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