Griffith v. Mangam

Headnote

This was an action, brought by a creditor of a manufacturing corporation chartered by the laws of New Jersey, against one of the stockholders, to recover a debt due from

the Corporation upon which judgment had been - recovered, execution issued and returned unsatisfied.

The action is based upon a law of that State, which reads as follows : “ When the whole capital of a corporation shall not be paid in, and the capital paid shall not be sufficient to satisfy the claims of its creditors, each stockholder shall be bound to pay on each share held by him the sum necessary to complete the amount of 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.”

It appeared upon the trial of this case, both by the allegations of the complaint and the evidence received, that the defendant had not, nor had other stockholders of the company, paid in full the amount of capital, for which they respectively held certificates and owned shares.

It was objected by the defendant that on this showing there could not be a recovery by these creditors against him, a single stockholder, and that the action necessary to charge the defendant was one in equity, bringing in the other stockholders in like predicament with him. It was so held by the referee and the General Term. Held, no error.

The court, citing the following authorities adjudicating as to a similar law of this State. (1 R. S-, 600, § 5; Morgan v. JST. Y. and A. JR. JR. Co., 10 Paige, 290; Mann v. Rents, 3 N. Y., 416 .)

The case of v. Drew ( 57 N. Y., 587 ) was distinguished in this, in that case the liability sought to be enforced was not one created by statute, but a common law liability, the action being to compel a stockholder to give up to a creditor of the corporation corporate assets which defendant had wrongfully converted to his own use.