Fisk v. Keeseville Woollen & Cotton Manufacturing Co.

The Chancellor.

Upon the argument of this case I had a very strong impression that the decision of the master was wrong, notwithstanding the decision of the supreme court in Bailey & Storm v. Bancker, (3 Hill's Rep. 188.) In that case, the decision is put upon the particular phraseology of the statute under which the personal liability of the individual stockholders was created. And Mr. Justice Bronson, in his opinion, admits that the construction which the court has been compelled to put upon the statute is contrary to the justice of the case. So in this case, at the time when the suits at law were commenced against the corporation by the petitioners, it does not appear that the corpo*594rate property had been exhausted, or its business so interrupted as to authorize the petitioners to file a bill against the company and its stockholders for the recovery of their debts. They were in justice and equity, therefore, entitled to their costs, at least up to the time when they could have proceeded in this court. And if the fact of the recovery of these judgments had been known at the time of the making the decree in this cause, I think a provision should have been inserted, in the decree, allowing creditors thus circumstanced to come in and prove for their costs at law, as a proper charge upon the corporation and its stockholders.

But upon examining the terms of the decree under which the petitioners and other creditors have' come in to prove their debts, I think the master was not authorized to allow for costs which were not an actual debt against the corporation on the 24th of March, 1843. The decree declares that the corporation became insolvent and was dissolved on that day; and it directs the master to take an account of the complainants’ debts against the corporation and of the debts due at that time to all other creditors of the corporation who should elect to come in under the decree. This necessarily precludes the master from allowing any thing to a creditor coming in under that decree, except what can fairly be considered a debt at the time when the decree declares the corporation to have been dissolved. For he could not go beyond the decree of the court and provide for a case which had been overlooked in drawing up the decree. The complainants’ solicitor, to whom the claims of the petitioners were entrusted, was therefore right in supposing that the decision of the master was correct, and that it would be improper to subject them to the risk of being charged with further costs by excepting to the master’s report. He also had reason to suppose, from the decision of the supreme court in the case before alluded to, that these costs, which were adjudged to the petitioners, in their suits against the corporation, subsequent to the time of its dissolution as stated in the bill, could in no event be charged upon the stockholders individually, upon *595the facts which the stockholders had admitted by suffering the bill to be taken as confessed.

The application to correct the report must therefore be denied, upon the merits, without reference to the form of the application. But under the circumstances of this case I shall not charge the petitioners with the costs of opposing such application.