NATIONAL P.ABK!BANK t/;PEAVEY.
923
fully examining the decisions of the highest court of Rhode Island, where the corporation was organized, as to whose capital stock defendant was sought to be held liable, and those from the like {lourt in Massachusetts, from which state the Rhode Islandstatu.te was adopted, state tnat the court has repeatedly held "that Wh'ether the remedy in the federal court should be by action at law or by suit· in equity depends upon the nature of the remedy given by the statutes of the state"; and the decision reached is largely, if not entirely, governed by the decisions of the Rhode Island court. In Clark v. Bever, supra, the supreme court, whilerefnsing to follow the supreme court of Iowa as to the decision there given (64 Iowa, 469, 20 N. W. 764) on the matter of the liability of a shareholder for unpaid installments or portions of his shares, on the ground that this was a question of general law, as to which the federal eourts must follow their own views and constructions, yet the court expressly recognize that the Iowa statute has given a new remedy for enforcement of such liability when that liability exists 116): The new right given to the creditor DY the statute is to have his execution, when' corporate property cannot be found, ievied upon the private property of the stockholder who is indebted on his subscription of stock.
And had it become material to consider it, undoubtedly, that court . would have recognized the remedy by the next section of the state statute,-"an action,"-as the legitimate and proper method of enforcement, as construed by the state court. In Patterson v. Lynde, supra, in which it was held that the proceedingunder the Oregon statute should be by a suit in equity, as one reason therefor the supreme court say, "The creditor has not been given, either by the constitution or the statute, any new remedy for the enforcement of his rights." Well may it be said, as to the remedy to be here pursued, using the language of the supreme court in l!"'lash v. Conn, supra: We think this is a case where the construction of the state court is entitled to great, if not conclusive, weight with us. · · · It is clear that confusion and uncertainty would reSUlt, should the state and federal courts place different constructions on the section. · · · If this was a case arising in the state of [Iowa,] we should follow the construction put upon the statute by the courts of that state.
And if in 'matters involving the determination of general principles, how much more when there is involved simply the question of the remedy to be adopted in enforcing a right, is the language of the supreme court pertinent, that: The federal courts administering justice in Iowa, having equal and co-ordinate jurisdiction with the courts of that state, · · · will lean towards an agreement of views with the state court, if the question seem to them balanced with doubt. Clark v. Bever, 139 U. S. 117, 11 Sup. Ct. 468, and ·cases there cited. '
The question heretofore considered does not involve the point whether a state statute may limit the sphere of jurisdiction which the federal courts exercise their equity powers. Oounsel upon .either side concede .this as settled in the negative by repeated de-
824
.. BDEIUL REPORTER,
vol·.64.
disionl ofi. Supreme court of the United State&. Payne v.Hook,
But as saidiD
The absence of ll. complete and adequate remedy at lit w Is the only test of eqult;y jurisdiction, aIld theapplIcatioD9f this principle, as 'applied to a particular 'cpae" must depend on the character of the ease, as disclosed In the pleadIngs. . .
The, Arst two points nam'ed, of the demurrer, are overruled. Il.eX:tground is that 11.0 assessment is shown to have, made mi· shares. This opinion has already its proPEWbounds, and must not be unnecessarily v.Bever, supra, it is said: So, Whe.n the in of creditors require, those who hold shares of stock
purportinJ to be, but, which are shown not to be, paId tor to theli' fJ!.Ce value, should. be held liable to pay their shareS in full, unless it appearstbat they acquired their stock under circumstances that did not give ereditoraand other stockholders just grounds for complaint.
In' Hatch v. Dana, 101 U. S. 214 {creditors' bill to charge stookholders holding unpaid stock), the court say: 'l'ii,lit . 'appellants [stpckholdersl are not protected by the fact, If such was the f8.ct. that thelf Ill;1bscrlptions for stock were payable "as called for by the company," we think, Is clear. Assuming that such a clause in the sUbsCflp;t!,oJl meant more than an agreement to pay on demand, and that It contemp1(l.ted a formal call upon all the subscribers of a company, the' sub· , scrlptlons were still In the nature of's. .fund for the payment of the com· pany's debts, and, it was the duty of the company to make the calls when· ever the funds were needed .for such payment. If they were not made the officers )()f the company Violated their tnlst, held both for the stockholders and thewmp!!ny. And it would seem singular if the stockholders could protect theU1seJ.yes from paying what they owe by setting up the default of their agent&'
Is not perceived why the reasoning of the opinion just gil'etl'roay not here avply. Singer v. Given, supra, states the doctrine that a subscriber to capital stock "assumes towards the creditors of the corporation an obligatiQI!.which can be discharged in no other way than by paysum." And in Jackson v. Traer,.supra, the court exment pressly declare that one who accepts and holds stock in a corporation has all the liabilities as to payment thereof which obtained as to the original subscriber. The words "unpaid installments" are used in the statute. But in the various Iowa cases cited by counsel Itppears no case wherein the court has not regarded the unpaid amounts on capital stock as bound to a judgment creditor of an insolvent corporation, who attempts to recover under the statute against the holder of such stock. . The remaining ground of demurrer is that the railway company, its creditors, and the other stockholders are necessary parties. In none of the cases above cited from the United States Reports is there any statement or that in an action at law either the insolvent corporation, Its other stockholders, or the other creditol'$ are necessary parties. Manifestly; an attempt wherein there is "the necessity of enforcing a'trust; the marshaling of assets, and equaliZing contributions" (Manufacturing Co. v. Bradley, supra),
BALFOUR t1. ROGERS.
925
could not be sustained astagainst one stockholder. Such qases, however, are in equity. All the cases cited on this point by counsel for and governed by the suggestions just defendant are suits in made. The very point of the Iowa statute is to provide a speedy and adequate method to give complete aid to a judgmeIitcreditor who pursues a stockholder for the amounts unpaid on his shares. The reasoning of the Iowa supreme court in Stewart v. Lay, supra, as above given, manifests the purpose of the statute. The shareholder has no grounds of complaint that he alone is sued, for his is a several, individual liability. And the very- fact that section 1634 entitles him to his separate action against another stockholder for contribution argues strongly against even the right of another stockholder to be joined with him as defendant in this action. He can avoid this statutory proceeding by paying in full his shares. And, since his obligation is alone sought to be enforced by the judgment creditor, he alone is the proper party. The creditor is not attacking the corporation in this action. The corporation has already had its day in court in the matter of the creditor's claim. The corporation is not interested in "the attempt of the creditor now to force from the stockholder, under the remedy afforded by the statute, the payment of so much of his unpaid shares as may be necessary- to discharge the judgment already obtained against the corporation. "This liability is fixed, and does not dp.pend on the liability of other stockholders. There is no necessity 1i)l' bringing in other stockholders or creditors. Any creditor wh'} has recovered judgment against the company, and sued out execution thereon, which has been returned unsatisfied, may sue any stockholder, and no other creditor can." Flash v. Conn, supra. This ground of demurrer must be overruled. Let an order be entered overruling the demurrer, to which defendant excepts. And defendant is given until February- 1, 1895, to elect to stand on his demurrer or to answer by that date, as he Olay be advised. BALFOUR et aI. T. ROGERS et al. (Circuit Court, D. Oregon. December 17, 1894.' No. 1.986.
L
ExECUTION SALE-REDEMPTION-MESNE PROFITS-OREGON STATUTB.
The statute of Oregon, relating to execution sales of land. provides that "'the purchaser, from the day of sale until resale or a redemption, and the redemptioner, from the 'day of hIs redemption until another redemptIon, shall be entitled to the possessIon of the property * * *, unless the lJ8.IIle be In possession of a tenant * * *, and, In such case, * · · to * · · the rents * · .... 1 alll's Ann. Laws, I 307. Held, that the right to receive rents and profits under this statute does not Imply that what is thus receIved can be retaIned by the purchaser in case of a redemption, but luall such cases the product of ,the property must be accounted tor to the redemptioner. tiff cannot abandon that and ask a dIfferent decree under the
.. PLEADING-PRAYER FOR RELIEF.
Where there Is no obstructIon to the partIcular reUef prayed, the plain
o
prayer.