Conklin v. . Furman

The act of 1847, under which the company in which the defendants are stockholders was organized, made the respective stockholders therein liable for the debts of the company, to a limited extent (chap. 210, Sess. Laws, 1847, § 44), and, in order to enforce the collection of such debt, provision was made, by § 46 of the same act, that the creditor, prosecuting the company for the recovery of the same, might include one or more of the stockholders liable to contribute to its payment but in case of a recovery against the company and the stockholders, no execution could be levied on the property of the stockholders, except for such deficiency as might remain unsatisfied after the property of the company had been levied upon and applied thereto. The moment the right of action accrued against the company it accrued against each stockholder, and unless the action was commenced within six years after it accrued, it was barred (Code, § 91), unless a different limitation is prescribed by statute, in § 74, or unless *Page 529 the action has been stayed by injunction, or statutory prohibition in § 105. It is not pretended that this action was commenced within six years after the cause of action accrued against the company and the defendants, or that any different limitation than six years has been prescribed for commencing an action against the company and the defendants, as stockholders, and prosecuting the same with precisely the same results that would follow suing the company to judgment first, and then, in case of the return of an unsatisfied execution, suing the stockholders; but it is insisted that because, by the same section which authorized the suing the company and the stockholders jointly, permission was given after judgment should be recovered in a separate action against the company, and an execution thereon should be returned unsatisfied, and not before, to sue one or more of the stockholders for the recovery of the debt, that the action against the stockholders was not barred until the expiration of six years after the return of the execution against the company. It should be borne in mind that the result is the same whether the stockholders are sued jointly with the company or separately, after judgment and execution against the company; in either case the property of the stockholders is exempt from levy, except for whatever deficiency may remain after the property of the company has been levied upon and applied to the extinguishment of the debt; and hence that no advantage could result to the creditor by prosecuting the company and the stockholders separately that would not result from a joint action against both. "The statute of limitations was intended as a statute of repose, to prevent fraud and to afford security against stale demands which might be made after the true state of the transaction may have been forgotten, or be incapable of explanation by reason of the death or removal of witnesses." If permission to sue the stockholders separately, after judgment and execution against the company, could give the creditor more than six years after the cause of action accrued against both, then the creditor might, on the last day of the six years after the cause of action accrued, sue the company; and then, in case *Page 530 of a recovery of judgment and return of an execution thereon unsatisfied, delay until the last day of another six years, and then sue the stockholders; so that, in the event of his disposition to sue separately, the right of action would be extended more than twelve years instead of six; and if it should happen that the litigation against the company should be protracted (as is often the case) ten or more years, that period added would extend the limitation more than twenty years from the accruing of the action, during the whole of which the stockholders may remain in ignorance of even an assumption of a claim against the company, and subject, if the ground taken by the plaintiff can be sustained, to all the evils of delay against which it was the object of the statute to guard. Unless, therefore, there is to be found an express provision or an implication necessarily implied from an express provision of the statute, fixing a different limitation than six years after the cause of action accrued against the company and the stockholders jointly, this action should be held to be barred. That more than six years before the commencement of this action elapsed after an action accrued in which the company and the defendants might have been sued jointly, is not doubted; and that no advantages could accrue to the plaintiff in this action that would not have accrued in that. Where, under such circumstances, the right to sue accrued, "the obligation of diligence attached and laches began," the plaintiff was not hindered from pursuing a complete remedy, "by injunction or any statutory prohibition." He doubtless had the right to sue the company first; the statute gave it to him, but it did not compel him to take it; his election was voluntary, and at the risk of collecting his debt against the company, or having his claim against the stockholders barred before his litigation with the company should terminate, unless he should voluntarily abandon it and avail himself of his joint action, in which he had a complete remedy. For the reasons stated I am for affirming the judgment appealed from.