Matthews v. Albert

Goldsborough, J., delivered the opinion of this Court. On the 1st of September, 1858, the “ Coal Oil and Par-affine Company of Baltimore,” became incorporated in accordance with the provisions of the Act of 1852, ch. 338. Soon after the organization of the company, it incurred sundry liabilities, and amongst them, the claims alleged to be due to the complainants named in the bill of complaint in this case. Judgments were obtained by the complainants against the company' on their claims.

Executions were issued thereon, and were returned nulla bona. Being, as they allege, without remedy, except in a Court of Equity, and having discovered that the appellee, Wm. J. Albert, had become a stockholder of the company to a large amount of shares, the complainants seek by this bill to recover their claims from him under the provisions of the 9th section of the Act of 1852, ch. 338. This bill was subsequently amended by making the corporators and Augustus J. Alber^ (who had become a stockholder) parties defendant.

The corporators suffered a decree pro confesso to go against them. , In this state of the case, it was “agreed that the question of the liability of the defendants other than William J. Albert and Augustus J. Albert, shall be postponed , until the determination of the liability of ⁵³⁵ the said Alberts, and that any decree passed in regard to the liability of said Alberts may be taken to the Court of Appeals, to be there decided without objection, either in this Court or in the Court of Appeals, on the ground that the liability of the other defendants is left undetermined by said decree. The responsibility of the Alberts is claimed upon the ground, that under the terms of the 9th section of the above Act, they, as stockholders, were “severally and individually liable to the creditors of the company to an amount equal to the amount of the stock held by them respectively, for all debts and contracts made by such company, until the whole amount of the capital stock, fixed and limited by such company, shall have been paid in; one-half thereof in one year, and the other half thereof within two years, from and after the incorporation of said company, or such corporation shall be dissolved.” The claims sought to be recovered in this suit, were contracted while the Alberts were stockholders. Though the doctrine of recoupment, upon which the bill in this case was dismissed, might properly arise between the company claiming the payment for stock subscribed, and the stockholders who had loaned money to the company to an amount equal to their stock, or had paid debts of the company to that amount, it by no means follows, that the stockholders are absolved from liability to creditors of the company. This responsibility is absolutely fixed by the Act of 1852, from which there is no escape, until the provisions of the 9th section are complied with, and it is not pretended that such is the case.

The defendants occupied the two-fold relation of debtors to the company for the amount of their stock at par value, and as debtors under the Statute, to the creditors of the company to an amount equal to their stock, for all debts and contracts created while they were stockholders. In Briggs vs. Penniman, 8 Cowan, 396, the Court say, “the ⁵³⁶ Statute does not refer to them in their corporate capacity, but as individual stockholders ; and it declares their liability, without reference to the amount they may have paid in on their stock.” In this connection, it is proper to say that in the terms which controlled the decision, the Statute of N. Y. is substantially the same as the Act of 1852, ch. 338. The Judge of the Superior Court has correctly construed the decision in Garrison vs. Howe, 17 N. Y. Rep., 462 , that if the stockholders had paid for their stock, and subsequently became creditors of the company to an amount equal to their stock,