the corporation derives its existence. If no additional liabil ity be imposed upon its members in the State of its origin, they enjoy the same exemption in foreign States, wherever the corporation may transact its business and wherever they may chance to reside, although the laws of such other States may impose a personal liability upon the members of its own corporations.2 § 150. (c) Penal statutes strictly local. An exception is made to the rule laid down in the preceding section, when the liability sought to be enforced against the corporate members is in the nature of a penalty. For penal laws are strictly local and cannot have any operation beyond the jurisdiction of the country where they were enacted. 1 Payson v. Withers, (1873) 5 Biss. 269; Merrick v. Van Santvoord, (1866) 84 N. Y. 208; Seymour v. Sturgess, (1862) 26 N. Y. 134; McDonough v. Phelps, (1846) 15 How. Pr. 372; Ex parte Van Riper, (1839) 20 Wend. 614; Hill v. Beach, (1858) 12 N. J. Eq. 31; Land Grant &c. Ry. Co. v. Coffee County, (1870) 6 Kan. 254; Nabob of Carnatic v. East India Co., 1 Ves. 371; Dutch West India Co. v. Henrequez, 1 Str. 612; King of Spain v. Mullett, 2 Bligh, (N. S.) 3. Cf. Enforce ment of Liability of Resident Stockholders in Foreign Corporations," by W. W. Thornton, 21 Cent. L. J. 522; "Position of English Shareholders in a Foreign Company," 18 Sol. J. & Rep. 810. 2 Second Nat. Bank v. Hall, (1878) 35 Ohio St. 158; Bateman v. Service, L. R. 6 App. Cas. 386. Cf. Jessup v. Carnegie, (1880) 80 N. Y. 441. Flash v. Cohn, 109 U. S. 371; Steam Engine Co. v. Hubbard, 101 U. S. 188; Sayles v. Brown, (1890) 40 Fed. Rep. 8; s. c. 7 Ry. & Corp. L. J. 2; Hawthorne v. Calif, (1864) 2 Wall. 10; Jones v. Barlow, (1875) 62 N. Y. 202; Story v. Furman, (1862) 25 N. Y. 214; Lowry v. Inman, (1871) 46 N. Y. 119, 127; Corning v. McCullough, Thus, for example, (1847) 1 N. Y. 47; s. c. 49 Am. Dec. 287; Freeland v. McCullough, (1845) 1 Denio, 414; s. c. 43 Am. Dec. 685; Strong v. Wheaton, (1861) 38 Barb. 625; Irwin v. McKean, 23 Cal. 472. Cf. The Antelope, (1825) 10 Wheat. 66; Woods v. Hicks, (1881) 7 Lea, 40; Ogden v. Folliot, (1790) 3 Term Rep. 726; Lawler v. Burt, (1857) 7 Ohio St. 340. 4 Moier v. Sprague, (1869) 9 R. I. 541; Cuykendall v. Corning, (1882) 10 Fed. Rep. 342; Yeaton v. United States, (1809) 5 Cranch, 281; Norris v. Crocker, (1851) 13 How. 429; State v. John, (1831) 5 Ohio, 217; Scoville v. Canfield, (1817) 14 Johns. 338; United States v. Lathrop, (1819) 17 Johus. 4; Gale v. Eastman, 7 Met. 14; Andrews v. Murray, (1861) 33 Barb. 354; Shaler &c. Quarry Co. v. Bliss, (1861) 34 Barb. 309; Bird v. Hayden, (1863) 1 Robt. (N. Y. Super. Ct.) 383; Kritzer v. Woodson, (1854) 19 Mo. 327; Cable v. McCune, (1858) 26 Mo. 371; Lawler v. Burt, (1857) 7 Ohio St. 340; Sturges v. Burton, (1858) 8 Ohio St. 215. Cf. Squires v, Brown, (1860) 20 How. Pr. 35. 5 Scoville v. Canfield, (1817) 14 Johns. 338; Derrickson v. Smith, (1858) 27 N. J. 166; First National statutes that create liability because of failure on the part of corporate authorities to give certain specified notices, or to make certain reports, or because certain forbidden contracts are entered into by the corporation, are essentially penal in their nature and can not be enforced out of the State.1 151. "Debts and liabilities," construed.- The "debts" of a corporation for which its members are made liable by Bank v. Price, (1870) 33 Md. 487; Halsey v. McLean, (1866) 12 Allen, 438; Hill v. Frazier, (1853) 22 Pa. St. 320; Harrisburgh Bank v. Commonwealth, (1856) 26 Pa. St. 451; Hodgson v. Cheever, (1880) 8 Mo. App. 321; Manville v. Edgar, (1880) 8 Mo. App. 324; Queenan v. Palmer, (1886) 117 Ill. 619: s. c. 34 Alb. L. J. 117; Norris v. Wrenschall, (1871) 34 Md. 492; Terry v. Calnan, (1879) 13 S. C. 220; Tinker v. Van Dyke, (1876) 1 Flippin, 532; Brown v. Hitchcock, (1879) 36 Ohio St. 678; Hatch v. Burroughs, (1870) 1 Woods, 443; Story on Conflict of Laws, §§ 620, 621; Wharton on Conflict of Laws, § 853, et seq.; Rorer on Interstate Laws, 148, 149. Under R. I. Rev. Stat., ch. 128, § 12, which provides that if any manufacturing company shall fail to file a certificate stating the amount of all assessments voted by the company and actually paid in, and the amount of all existing debts, the stockholders shall be jointly and severally liable for the debts of the company, it is held that Rhode Island stockholders in a Rhode Island corporation, against whom a liability was enforced under the last-named section, could not call upon stockholders residing in another State for contribution, as the liability under the section was penal. Sayles v. Brown, (1889) 40 Fed. Rep. 8; s. c. 7 Ry. & Corp. L. J. 2. So the 12th section of the New York Manufactur ing Companies Act, to the effect that the corporate officers shall be liable for the debts of the corporation, in case they fail to make an annual public report of the business of the corporation, (Laws of 1848, ch. 40) is held to be penal in its character. Chase v. Curtis, 113 U. S. 452; Stokes v. Stickney, (1884) 96 N. Y. 323; Pier v. Hanmore, (1881) 86 N. Y. 95; Pier v. George, (1881) 86 N. Y. 613; Veeder v. Baker, (1880) 83 N. Y. 156; Knox v. Baldwin, (1880) 80 N. Y. 610; Easterly v. Barber, 65 N. Y. 252; Wiles v. Suydam, 64 N. Y. 173; Merchants' Bank of New Haven v. Bliss, (1886) 35 N. Y. 412. Cf. Western Transportation &c. Co. v. Kilderhouse, (1882) 87 N. Y. 430; Lemmon v. People, (1860) 20 N. Y. 562; Boughton v. Otis, (1860) 21 N. Y. 261; Losee v. Bullard, (1880) 79 N. Y. 404. But in Cochran v. Weichers, (1889) 53 Hun, 636, it was held that an action against a stockholder in a corporation organized under an act which provides that all the stockholders shall be individually liable to the creditors of the company to an amount equal to the stock held by them respectively, for all debts and contracts made by such company, until the whole amount of capital stock fixed by the charter has been. paid in, and a certificate thereof made and recorded, to enforce defendant's liability for the corporation's debts, the certificate not having been recorded, is not an action statute are such claims against it as arise from contract,1 and do not include a judgment against the company for tort,2 even though the tortious act might have been considered a breach of contract; nor costs in such action. But the word has been held to cover a judgment for waste obtained against the company." § 152. "To the amount of their stock" and "to double the amount," construed. Statutes enacting that shareholders shall be liable to corporate creditors "to the amount of their subscriptions," are construed to be merely declaratory of their common law liability; but statutes imposing a liabil ity "to the amount of their stock," are construed to mean not only the amount remaining unpaid on their subscriptions, but to recover a penalty, but arises on contract and survives against defendant's personal representative. 1 Child v. Boston &c. Iron Works, 137 Mass. 516; s. c. 50 Am. Rep. 328; Mill Dam Foundry Co. v. Hovey, 21 Pick. 417; Chase v. Curtis, 113 U. S. 452; Heacock v. Sherman, 14 Wend. 58; Esmond v. Bullard, (1878) 16 Hun, 65; S. C. affirmed sub nom. Losee v. Bullard, (1880) 79 N. Y. 404; Archer v. Rose, (1871) 3 Brews. (Pa.) 264; Cable v. Gatty, 34 Mo. 573; Cable v. McCune, (1858) 26 Mo. 371; s. c. 72 Am. Dec. 214; Dryden v. Kellogg, (1876) 2 Mo. App. 87; Bohn v. Brown, (1876) 33 Mich. 257, 263; Doolittle v. Marsh, (1881) 11 Neb. 243. Contra, Carver v. Braintree Manuf. Co., 2 Story, 432, 447. Cf. Wyman v. American Powder Co., 8 Cush. 168, 182; Gray v. Bennett, 3 Met. 522. 2 In re Boston &c. Iron Works, (1884) 23 Fed. Rep. 880; Heacock v. Sherman, (1835) 14 Wend. 59; Child v. Boston &c. Iron Works, (1884) 137 Mass. 516; Mill Dam Foundry Co. v. Hovey, (1839) 21 Pick. 417. Cf. Chase v. Ingalls, (1867) 97 Mass. 524; Lowell v. Street Commissioners, (1871) 106 Mass. 540; Zimmer v. Schleehauf, (1874) 115 Mass. 52. Under Ind. Rev. Stat. 1881, § 3869, which provides that stockholders of manufacturing and mining companies shall only be liable for the amount of the stock subscribed by them, a creditor cannot sue a stockholder or a subscriber to the original articles of association for the amount of unpaid stock or subscriptions; as the only liability is to the corporation, or to a receiver in case of its insolvency, and it is immaterial that plaintiff alleges that he is the only creditor. Wheeler v. Thayer, (Ind. 1890) 22 N. E. Rep. 972. 3 Cable v. McCune, (1858) 26 Mo. 371; s. c. 72 Am. Dec. 214; Bohn v. Brown, (1876) 33 Mich. 257; Heacock v. Sherman, 14 Wend. 58. 4 Schouton v. Kilmer, (1853) 8 How. Pr. 527; Lathrop v. Singer, (1863) 39 Barb. 396. Contra, Lane v. Baker, (1853) 2 Grant Cas. 424. Cf. Veeder v. Mudgett, (1882) 27 Hun, 519. 5 Powell v. Oregonian Ry. Co., (1888) 36 Fed. Rep. 726. 6 Walker v. Lewis, (1878) 49 Tex. 123. also an additional sum equal to the amount of their stock.' The New York General Manufacturing Act of 1848, upon which the statutes of many of the States are modelled, is more explicit, its language being, "to an amount equal to their stock," yet it was not without litigation that the phrase has been admitted to impose an additional liability. A comparison of this language with that of the General Railroad Act of 1850, however, which declares the railway shareholder liable to creditors "to an amount equal to the amount unpaid on the stock held by him," renders evident the meaning attached to the words of the former, the latter being merely declaratory of the common law. Statutes imposing a liability "to double the amount of the stock held by them" receive the same construction as those making the shareholders liable "to the amount of their stock." 1 Root v. Sinnock, (1887) 120 Ill. 850; s. c. 60 Am. Rep. 558; McDonnell v. Alabama Gold Life Ins. Co., (1889) 85 Ala. 401; Briggs v. Penniman, 8 Cow. 387; s. c. 18 Am. Dec. 454; Pettibone v. McGraw, 6 Mich. 441; Sacketts Harbor Bank v. Blake, 3 Rich. Eq. 225. Contra, Lewis v. St. Charles County, 13 Mo. App. 48. Cf. Gausan v. Buck, (1878) 68 Mo. 545; Schricker v. Ridings, (1877) 65 Mo. 208. 2 N. Y. Laws of 1848, ch. 40. Wheeler v. Millar, (1882) 90 N. Y. 353, 359; In re Empire City Bank, (1858) 18 N. Y. 199, 218; Ohio Life Ins. Co. v. Merchants' Ins. Co., (1850) 11 Humph. (Tenn.) 1; Lewis v. St. Charles Co., (1878) 5 Mo. App. 225; South. & Jones on Manuf. & Business Corps. § 100. Cf. Briggs v. Penniman, (1824) 8 Cow. 387; Bank of Poughkeepsie v. Ibbotson, (1840) 24 Wend. 473. 4 N. Y. Laws of 1850, ch. 140, § 10, amended by Laws of 1854, ch. 282. 5 Patterson v. Lynde, 106 U. S. 519; Stephens v. Fox, (1881) 83 N. Y. 813; Mills v. Stewart, (1870) 41 N. Y. 884, 889; Brundage v. Monumental &c. Co., 12 Oregon, 322; Bush v. Cartwright, 7 Oregon, 329. "Appeal of Parish, (Pa. 1890) 19 Atlan. Rep. 569, holding that Pa. Act of April 10, 1873, (P. L. 674,) incorporating the Miners' Bank of Summit Hill, which provides (section 13) that "the stockholders of said bank shall be held individually responsible . . . for all contracts, debts, and engagements of said bank, to the extent of double the amount of the stock subscribed for or held by them," creates a liability in favor of creditors against the stockholders in twice the amount of stock held by them, respectively, without regard to the question whether or not the stock has been paid for in full to the corporation. Perry v. Turner, (1874) 55 Mo. 418; Matthews v. Albert, (1866) 24 Md. 527; Norris v. Johnson, (1871) 34 Md. 485; Booth v. Campbell, (1872) 87 Md. 522; Schricker v. Ridings, (1877) 65 Mo. 208; Gay v. Keys, (1863) 30 Ill. 413. $153. " 'Dissolution" and "failure" construed.-Statutes imposing an additional liability upon shareholders for the corporate debts, which provide for the accrual of the liability upon the dissolution of the corporation, are held to be applicable whenever the corporation becomes a nominal, inert body, its property and funds exhausted, reduced to insolvency, rendering legal remedies against it unavailing. The word "failure" used in a similar connection has been held to apply to a case where a bank suspended specie payments.2 § 154. Proportional liability.- Statutes imposing upon stockholders a personal liability "in proportion to the amount of the shares" held by them renders each of them liable for so much of the whole indebtedness of the company as the number of shares owned by him is to the whole number into which the capital stock is divided. This is a several liability. One shareholder does not have to make good the deficit caused by the delinquency of others; and having paid the whole or a part of his proportion of the corporate debts, he is discharged from further liability in toto or pro tanto, as the case may be. One creditor, however, whose claim is sufficient, may enforce the payment of the whole amount due from a single stockholder. In computing the amount of a shareholder's liability under these acts, any legitimate evidence is admissible to prove 1 Central Agricultural Assoc. v. Alabama Gold &c. Ins. Co., (1881) 70 Ala. 120; Morley v. Thayer, (1880) 3 Fed. Rep. 737; Bank of Poughkeepsie v. Ibbotson, (1840) 24 Wend. 473; Penniman v. Briggs, (1825) Hopk. Ch. 300; s. c. sub nom. Briggs v. Penniman, (1826) 8 Cow. 387; Slee v. Bloom, (1822) 19 Johns. 456; Perry v. Turner, (1874) 55 Mo. 418; State Savings Assoc. v. Kellogg, (1873) 52 Mo. 583; Dryden v. Kellogg, 2 Mo. App. 87. Cf. Blair v. Gray, 104 U. S. 769. 2 Lane v. Morris, (1850) 8 Ga. 468, 476; Terry v. Calnan, 13 S. C. 220. Cf. Terry v. Tubman, 92 U. S. 156; Terry v. Anderson, 95 U. S. 632. Branch v. Baker, (1874) 53 Ga. 502, 512; Adkins v. Thornton, (1856) 19 Ga. 325, 328; Robinson v. Lane, (1856) 19 Ga. 337; Morrow v. Superior Court, (1883) 64 Cal. 383. 4 United States v. Knox, 102 U. S. 422, 425; Crease v. Babcock, 10 Met. 524, 555; Adkins v. Thornton, (1856) 19 Ga. 325, 328. 5 Branch v. Baker, (1874) 53 Ga. 502, 512; Jones v. Wiltberger, 42 Ga. 575; Belcher v. Wilcox, 40 Ga. 391. 6 Hatch v. Burroughs, (1870) 1 Woods, 439; Branch v. Baker, (1874) 53 Ga. 502; Lane v. Harris, (1854) 16 Ga. 217; Lane v. Morris, (1850) 8 Ga. 468; Larrabee v. Baldwin, (1864) 35 Cal. 155. Cf. Bank of Poughkeepsie v. Ibbotson, (1840) 24 Wend. 473. |