Butcher v. J. I. Case Threshing MacH. Co.

It seems to be very well settled that, in a suit by a judgment creditor of a corporation against a stockholder therein to establish liability on the part of the stockholder for the debt, the judgment against the corporation is not only evidence, but, in the absence of fraud in procuring it, or lack of jurisdiction in the court to render it, conclusive evidence, of the fact that the corporation was indebted to the plaintiff as determined by such judgment. 7 Rawle C. Law, p. 420, and authorities there cited; note to McBryan v. Universal Elevator Co., 97 Am. St. Rep. 463.

"The prevailing view," said the writer of the article on "Corporations," in 7 It. Law, "is that a judgment against a corporation is conclusive against the stockholders in any action or proceeding to enforce their individual liability; and the courts make no distinction between cases in which actions are brought against stockholders on account of unpaid subscriptions and those wherein the object is to enforce the statutory or constitutional liability. Until reversed in some direct proceeding for that purpose it cannot be collaterally attacked, even though the stockholder is a nonresident and not personally served with process, and though he never appeared or had notice of the suit."

As we understand it, appellants are not in the attitude of combating the correctness of the rule as it is stated in the quotation above, but, rather, their insistence is that the case is within a qualification of the rule stated by the same writer as follows:

"A judgment against a corporation is not conclusive against a stockholder as to his liability for its debts when such judgment is open to attack by him on the ground that it was obtained by fraud or collusion or in a court not having jurisdiction."

They do not claim the judgment was procured by fraud, but assert that the effect of the dissolution of the box manufacturing company was to abate the suit pending against it in the Dallas county district court, and so deprive that court of power to render the judgment it did render against said box manufacturing company. No doubt such would have been the effect of the dissolution of the corporation but for the statute set out in the statement above. R. C. Law, pp. 750, 751, and authorities there cited. It will be noted that by the terms of that statute (article 1206) appellants, as the managers of the affairs of the box manufacturing company at the time it was dissolved, when it was dissolved became trustees for its creditors and stockholders, with full power to "settle its affairs," and for that purpose were empowered in its name to "compromise controversies" and to "maintain or defend judicial proceedings," it will be noted, also, that by the terms of the statute the dissolution of the corporation was a qualified one; that is, it continued to exist for three years after its dissolution, so far as it was necessary for the purpose of enabling appellants "to settle up its affairs." It would seem therefore that the common-law rule invoked by appellants did not apply to the case; that because of the statute the suit in the Dallas county district court did not abate when the box manufacturing company was dissolved; and that appellants were within their rights and were discharging their duty as the managers of the affairs of the corporation at the time it was dissolved, when they took up and continued the defense of the suit in its name. Such, in effect, seems to have been the view of the statute taken by the Supreme Court of the United States in Pease v. Rathbun-Jones Engineering Co., 243 U.S. 273,37 S. Ct. 283, 61 L. Ed. 715, Ann.Cas. 1918C, 1147. Appellants insist, however, that the court of Civil Appeals for the First District in Lumber Co. v. Toole, 181 S.W. 823, and this court in Transit Co. v. Walton,189 S.W. 307, hold to a contrary view. We do not think so. Each of those cases, as appears from the report of the one first mentioned and from the record here of the other, is distinguishable from the Pease Case, as it is from this one, in that in each of them the suit against the corporation was commenced after the corporation had been dissolved.

There is, we think, no error in the judgment. Therefore it is affirmed.