parties defendant, in that all of the stockholders of the Miltonvale State Bank are not made defendants herein"; also, that it appears upon the face of the complaint "that causes of action have been improperly united therein, and that plaintiff seeks to recover as a judgment creditor upon a statute purporting to give a joint cause of action against all the stockholders of the Miltonvale State Bank, and also seeks to recover as a general creditor upon a statute purporting to give cause of action against this defendant as a stockholder of said bank separately"; and, for a third ground of demurrer, asserts "that the complaint does not state facts sufficient to constitute a cause of action."

I think the complaint sets forth a good cause of action, and that the judgment overruling the demurrer should be affirmed. The court has been referred to a large number of authorities in other states, and, in considering the questions here presented, has examined many others; but it seems to me that a review and discussion of the various decisions that have been rendered in other states, where similar or somewhat similar questions were involved, is unneces sary, and will lead to confusion, rather than clearness, in expressing the determination that I have arrived at in this case. A brief reference to general principles, together with a few cases in our own state, and in the supreme court of the United States, seems to me abundantly sufficient.

It is alleged that the defendant is a stockholder in a dissolved and insolvent bank in the state of Kansas; that, by the constitution and statutes of that state under which such banking corporation was organized, the stockholders of such bank are liable to the creditors thereof "to an additional amount equal to the stock owned by each stockholder." The ordinary statutory liability of a stockholder is a contract liability, and, as such, enforceable in any state or court where jurisdiction may be obtained of the person. Cook, Stock, Stockh. & Corp. Law, § 223; Ex parte Van Riper, 20 Wend. 614; Corning v. McCullough, 1 N. Y. 47; Dennick v. Railroad Co., 103 U. S. 11; Flash v. Conn, 109 U. S. 371-379, 3 Sup. Ct. 263. "Every shareholder in a corporation is supposed to be cognizant of the provisions of its charter, and the general laws of the state which relate to his duties as such shareholder, and which define the nature and extent of his liability to the creditors of the corporation." Association v. O'Brien, 51 Hun, 45, 3 N. Y. Supp. 764. The personal liability of stockholders for the debts of a corporation by virtue of its charter is not in the nature of a penalty or forfeiture, and does not exist solely as a liability imposed by statute. It is not enforced simply as a statutory obligation, but is regarded as voluntarily assumed by the act of becoming a stockholder. By such act he assents to be bound, or that his property shall be charged with debts of the corporation, to the extent and in the manner prescribed by the act of incorporation. Where, therefore, the act of incorporation declares in terms that each stockholder shall be individually liable for the debts of the corporation, the courts of this state are open to a creditor of such corporation to enforce the liability of the stock

holder for such debts, according to the terms of the charter. Lowry v. Inman, 46 N. Y. 119–126.

Morawetz, in his excellent work on Private Corporations (section 875), lays down the following as a general rule:

"It seems clear, upon principle, that a creditor of a corporation whose shareholders are individually liable for its debts may maintain a suit to enforce this liability wherever he can obtain jurisdiction over the necessary parties. The right to maintain a suit of this character outside of the jurisdiction of the state by which the corporation was chartered does not depend upon the comity of the state where the suit is brought, or its willingness to recognize and give effect to the laws of a foreign state; it depends upon the willingness of the courts to enforce a contract validly entered into between the parties in another jurisdiction. A refusal to grant a remedy in a case of this kind would not be a refusal to enforce a foreign law; it would be simply a denial of justice."

I think it may be laid down as the settled law of this state that a liability like that of the one in question here is a contract liability, and one that can be enforced in this state, unless an exclusive remedy is provided in the state where the corporation is organized. In the case of Lowry v. Inman, supra, it was held the plaintiff could not maintain his action in this state, because there was a special and exclusive remedy provided, which in its nature could only be enforced in the state of Georgia. By the statutes of that state, a judgment and execution against a corporation was made a lien upon and enforceable against the property of the stockholder, and no provision was made for an independent action against a stockholder. It is perfectly apparent that a remedy of that kind could only be enforced in the state where the corporation existed. Again, in Christensen v. Eno, 106 N. Y. 97-103, 12 N. E. 648, it was held that the liability of the stockholder could not be enforced in this state, because the remedy provided in that case authorized the creditors of the corporation who should have obtained a judgment, and the execution thereon was returned unsatisfied, to issue an execution against any stockholder to an amount equal in amount to the stock held by him, together with the amount unpaid thereon. In Barnes v. Wheaton, 80 Hun, 8, 29 N. Y. Supp. 830, where the Ohio statute in relation to the liability of stockholders was in question, it was held "that an independent action could not be maintained in Ohio against one stockholder alone, and that the remedy to enforce such liability, being specially provided by the statutes of that state, is exclusive, and not available here." As I read the statute of Kansas, no exclusive remedy is provided. The creditor who desires to charge the stockholders personally, and who has obtained a judgment against the corporation, and has issued an execution thereon, and no property of such corporation can be found whereon to make a levy, may then issue an execution against any of the stockholders to an extent equal in amount to the amount of stock owned, together with any sum unpaid thereon, or "the plaintiff in an execution may proceed by action to charge the stockholder with the amount of his judg ment." The first remedy is obviously one that can only be availed of in the state where the judgment is obtained against the corporation and against the stockholders in such state, or who may have prop

erty in such state, and cannot be availed of as against foreign stockholders. The second remedy is not exclusive, but, under the authorities heretofore cited, may be availed of in any jurisdiction.

But it is contended that an action cannot be maintained against a single stockholder; that it must be brought against all. Under a statute of our state, reading as follows: "Where the capital stock of a corporation has not been paid in, and capital paid shall be insufficient to satisfy the claims of its creditors, each stockholder shall be bound to pay on each share held by him a sum necessary to complete the amount due on such share as fixed by the charter of the company, or such proportion of that sum as shall be required to satisfy the debts of the company" (1 Rev. St. p. 600, § 5)-it has been held that one stockholder could not be sued alone; that, no remedy being prescribed by the statute, it was to be enforced by such practice and in such form as the nature of the right and the relief sought demanded. It was decided that a bill in equity, bringing in the corporation and the delinquent stockholders, was the proper course. Then an account of all the debts and of the assets could be had, together with the amount unpaid by each of the stockholders, so that they could be made equally liable. Mann v. Pentz, 3 N. Y. 415. And it was held of a similar statute of New Jersey that the liability could not be enforced against a single stockholder in this state for the same reason. Griffith v. Mangam, 73 N. Y. 611. Under that statute no provision was made for distributing the indebtedness equally among the stockholders. Under the statute of Kansas, such provision is made that the stockholder who is compelled to pay the judgment may bring an action against all who are stockholders at the time of the dissolution of the corporation, for the recovery of the portion of such debt for which they are liable; thus bringing about an equitable distribution of the debts among all the stockholders. Again, the statute in terms provides that a "suit may be brought against any person or persons who are stockholders at the time of such dissolution, without joining the corporation in such suit." This obviously means permission to sue one or all of the stockholders. That view is further supported by the ensuing sentence, reading as follows: "If judgment be entered and execution satisfied the defendant or defendants may issue to all who are stockholders at the time of the dissolution," etc. It seems to me, therefore, that one of the remedies provided by the statute of the state of Kansas-that is, "by action"-is one that is not exclusive; it simply gives a right of action, the same as exists upon any contract liability, and is one that may be pursued in this state; and that such statute contemplates and provides for an action against a single stockholder. For these reasons, the judgment appealed from should be affirmed, with costs. All concur.

(10 Misc. Rep. 600.)

MacVEAGH v. CONTINENTAL TRUST CO. OF CITY OF NEW YORK

et al.

(Supreme Court, Special Term, New York County. December, 1894.) PARTIES-AUTHORITY TO USE NAME-WHO MAY EXERCISE.

One M., who owned shares of stock which the officers of the corporation refused to transfer to his name on the books, sold the shares to S. by a writing which declared that he sold them "with all rights and privileges attaching thereto, and all claims arising out of my ownership thereof; and I hereby authorize him to take all such proceedings in my name for his benefit and at his expense as he may be advised are necessary or proper to enforce his rights as the holder of said stock." Held, that the authority given to S. was personal to him, and did not pertain to the ownership of the shares, so as to authorize any other person than S. to sue in the name of M.

Action brought in the name of Wayne MacVeagh against the Continental Trust Company of the City of New York and the Denver Union Water Company for an injunction. Plaintiff moves to continue the injunction pendente lite. Denied.

George H. Yeaman, for plaintiff.

Jay & Candler, for defendant Continental Trust Company.

Wm. A. & Walter H. Underwood, for defendant Denver Union Water Company.

PATTERSON, J. This is a motion to continue, pending suit, a temporary injunction which was granted in this action on November 7, 1894, restraining the defendants, the Denver Union Water Company and the Continental Trust Company of the City of New York, their officers, etc., from selling, negotiating, paying out, transferring, or otherwise disposing of any of the bonds of the said Denver Union Water Company, secured by a mortgage or deed of trust made on or about the 20th day of October, 1894, and filed on or about the 1st day of November, 1894, and from verifying such bonds, or any of them, and from delivering, surrendering, or transferring said bonds, or any of them, to any person or corporation, and from transferring to any other person or corporation the trust in said deed expressed. The Denver Union Water Company appears to be the successor of several other corporations organized for similar purposes, and also appears to have acquired certain properties which, as far back as the year 1890, belonged to a corporation styled the "Denver Water Company." That last-named corporation executed a mortgage to the Farmers' Loan & Trust Company of the City of New York, which mortgage covered property then belonging to that corporation, as well as property subsequently to be acquired. The Denver Water Company thereafter conveyed its property to the Denver City Waterworks Company, and in that conveyance was included property acquired by the Denver .Water Company after the execution and delivery of the mortgage to the Farmers' Loan & Trust Company. The Denver City Waterworks Company in November, 1890, made and executed a mortgage to the Central Trust Company of New York, as trustee, which mortgage covered all the property acquired by transfer from the Denver

Water Company. In April, 1891, the Denver City Waterworks Company conveyed all its property to the American Waterworks Company of New Jersey, and included all the property which had previously belonged to, and is claimed to have been conveyed by, the Denver Water Company. The mortgage to the Farmers' Loan & Trust Company, and the mortgage to the Central Trust Company of New York, have been foreclosed in the state of Colorado, and such proceedings have been had in those foreclosure actions that decrees have been entered and sales have been made in pursuance, or alleged pursuance, of such decrees. At such sales, which were made by a master or commissioner appointed by the Colorado court, certain persons became the purchasers of the mortgaged property, they acting, it is claimed, in the interest and for the benefit of a corpora tion called the "Denver Union Water Company," which is one of the defendants in this action. This last-named corporation has become the grantee of all the property described in the foreclosure decrees, including the property which belonged to the Denver Water Company, and which was covered by the mortgage of that company to the Farmers' Loan & Trust Company. The defendant the Denver Union Water Company has executed and delivered to the defendant the Continental Trust Company a mortgage covering the whole of the property purchased at the foreclosure sale, and has authorized the issuance of $8,000,000 of bonds, to which the mortgage last referred to is made collateral, and this mortgage purports to be a first lien on all the property held or owned by the defendant referred to. The complaint contains allegations of fraud, conspiracy, and wrongdoing on the part of all who have been connected with these various corporations from the time of the first mortgage made by the Denver Water Company down to the present time. It is claimed that the first mortgage to the Farmers' Loan & Trust Company was made to cover subsequently acquired property, whereas by the original resolution authorizing the making of the mortgage nothing was intended to be covered but that property which the corporation then owned. It is sought to thus follow, through the mortgage of the second corporation, which was made to the Central Trust Company, and so on down to the mortgage of which the Continental Trust Company is made the trustee, that "subsequently acquired" property of the Denver Water Company which it is claimed was unlawfully brought under the lien of the original mortgage made to the Farmers' Loan & Trust Company; and the prominent feature which is disclosed by the papers is, as claimed by the plaintiff, that by reason of the changes referred to, and the formation and reorganization of companies, and the creation and enforcement of liens, the Denver Union Water Company has now the apparent title and absolute control of valuable property belonging to the Denver Water Company; that the title of the Denver Water Company is affected by the cloud which has been caused by these various reorganizations, and by the attempted unlawful transmission of title to such "subsequently acquired" property; and that the aid of a court of equity is necessary to disentangle the title, and to remove the cloud alleged to be upon it, so that the original company may preserve its rights,