Norris v. Johnson

Miller, J., delivered the opinion of the Court. ‘ This is an action at law by the appellee as a creditor, against the appellant as a stockholder of the “ Baltimore City ⁴⁸⁸ Concrete Company,” a corporation formed under the provisions of the Code, (Article 26,) relating to corporations for manufacturing purposes. The suit is to enforce the individual liability of the defendant under section 52 of that Article, and the declaration is framed upon that section. All errors in pleading were waived, and it was agreed the parties may recover or defend upon any facts offered in evidence, without reference to the state of pleadings. By agreement, it was admitted that the company was duly incorporated under these provisions’ of the Code, in March, 1866, with a capital stock of $100,000, in one thousand shares each, of the par value of $100; that in January, 1869, the company became indebted to the plaintiff in the sum of $471.10 for goods sold and delivered, and work done and materials furnished ; that at the time this debt was contracted, the defendant was a stockholder, holding one hundred and ten and a half shares, which he fully paid up, and continued to hold them at the time of trial; that the whole amount of its capital stock has never been paid in, and a greater amount thereof is unpaid than the amount of the plaintiff's claim; that the corporation has other creditors, whose number and the amount of their claims are unknown; and that the defendant, before suit brought, tendered to the plaintiff the sum of $72.96, as the amount which he owed him.

The Court instructed the jury, that if they believed these facts, the plaintiff was entitled to recover the full amount of his claim, and refused a prayer of the defendant to the effect that the plaintiff could not recover because other creditors equally entitled to enforce the personal liability of the defendant, are not joined in the action, and to these rulings the defendant excepted. The provisions of the section are, that “ all the stockholder’s of any such corporation shall be severally and individually liable to the creditors of the corporation in which they are stockholders, to an amount equal to the amount of stock held by them respectively, for all debts and contracts made by the corporation, until the whole amount of the capital stock fixed ⁴⁸⁹ and limited by the corporation, shall have been paid in — one-half thereof in one year, and the other half in two years from and after the incorporation of said company — or such corporation shall be dissolved.” It is not necessary, for the purposes of this case, to determine some of the questions arising upon the construction of this section. Eor instance, we need not decide whether the liability for all debts contracted before the capital stock is paid in, continues after that event, and until such debts are all paid, or whether all antecedent liability is released and terminated by that event, because the plaintiff’s case is within either construction. But it is quite clear, the extent of liability is measured by the par value of the stock held by each stockholder at the time the debts are contracted, and is in no way affected by the amount of capital that at any time may remain unpaid.

The sole question we are now called upon to decide is, can this liability be enforced by one creditor, where others are shown to exist, against an individual stockholder, or must the creditor resort to equity for relief? It is to be observed that this section, unlike in that respect similar laws in some of the States, is silent as to remedy, prescribing no form, and designating no tribunal where relief may bé had. In such case, it is unanimously conceded the creditors may have relief in equity, but the controverted question is, have they not also the right to sue at law. In Matthews vs. Albert, 24 Md., 527 , the only case that has hitherto arisen in this State on the subject, the creditors filed a bill in equity, but the Court was careful not to decide against the remedy at law.

In other States, the point has been determined in numerous cases, all of which have been cited in argument, and have received our most careful consideration. By the decisions in New York, under similar statutes, the question has been settled in