1

creates a right also prescribes an adequate remedy, the latter is to be taken as an exclusive one.

Gluck & B. Receivers, p. 189; Chandler v. Brown, 77 Ill. 333; Chicago Bldg. & Mfg. Co. v. Summerour, 101 Ga. 820, 29 S. E. 291.

Mr. R. M. Bashford, also for appellant: This suit must be brought in equity by one creditor suing in behalf of himself and all others against the corporation and the stockholders in order to wind up the affairs of the corporation, to enforce the liabilities of the stockholders, and, if need be, to compel contribution.

Faribault v. Misener, 20 Minn. 396, Gil. 347; Sedgw. Stat. & Const. L. 2d ed. 344; May v. Black, 77 Wis. 101, 45 N. W. 949; Nimick v. Mingo Iron Works Co. 25 W. Va. 184; Lowry v. Inman, 46 N. Y. 119; Christensen v. Eno, 106 N. Y. 97, 60 Am. Rep. 429, 12 N. E. 648; National Bank v. Dillingham, 147 N. Y. 603, 42 N. E. 338; Marshall v. Sherman, 148 N. Y. 26, 34 L. R. A. 757, 42 N. E. 419; Erickson v. Nesmith, 4 Allen, Foster v. Posson, 105 Wis. 99, 81 N. W. 233; New Haven Horse Nail Co. v. Linden | 123; Gianella v. Bigelow, 96 Wis. 185, 71 N. Spring Co. 142 Mass. 349, 7 N. E. 773; Post W. 111; Booth v. Dear, 96 Wis. 516, 71 N. v. Toledo, C. & St. L. R. Co. 144 Mass. 341, W. 816. 59 Am. Rep. 86, 11 N. E. 540; Bank of North America v. Rindge, 154 Mass. 203, 13 L. R. A. 56, 27 N. E. 1015; Fowler v. Lamson, 146 Ill. 472, 34 N. E. 932; Young v. Farwell, 139 Ill. 326, 28 N. E. 845; Patterson v. Lynde, 112 Ill, 196, 106 U. S. 519, 27 L. ed. 265, 1 Sup. Ct. Rep. 432; Hancock Nat. Bank v. Farnum, 20 R. I. 466, 46 L. R. A. 471, 40 Atl. 341.

When a statutory liability is not in its nature penal, and does not depend upon remedies whose enforcement is peculiar to the courts of the state which has created the law; where, in short, the statutory liability is a simple personal liability growing out of the contract of the shareholder,-that liability may be enforced wherever jurisdiction over the particular shareholder may be obtained.

Russell v. Pacific R. Co. 113 Cal. 258, 34 L. R. A. 747, 45 Pac. 323; Western Nat. Bank v. Lawrence, 117 Mich. 669, 76 N. W.

105.

The Minnesota statute contemplates a single action of an equitable nature in which all the creditors and all the stockholders are parties, and the rights, equities, and liabilities of all parties in interest are finally determined.

Hale v. Hardon, 95 Fed. Rep. 777, 37 C. C. A. 240; May v. Black, 77 Wis. 105, 45 N. W. 949; Young v. Farwell, 139 Ill. 326, 28 N. E. 846; Marshall v. Sherman, 148 N. Y. 18, 34 L. R. A. 757, 42 N. E. 419; Tuttle v. National Bank of the Republic, 161 Ill. 497, 34 L. R. A. 750, 44 N. E. 985; 12 Enc. Pl. & Pr. 141; Foster v. Posson, 105 Wis. 99, 81 N. W. 123; Crippen v. Laighton (N. H.) 46 L. R. A. 467, 44 Atl. 538; Stoddard v. Lum, 159 N. Y. 265, 45 L. R. A. 551, 53 N. E. 1108.

The complaint makes an unjust discrimi nation against this defendant.

Great Western Teleg. Co. v. Burnham, 79

Wis. 47, 47 N. W. 373; Germania Iron Min. Co. v. King, 94 Wis. 439, 36 L. R. A. 51, 69 N. W. 181; Davis v. Parcher & J. & A. Stewart Co. 82 Wis. 499, 52 N. W. 771; MacKinnon v. Mutual F. Ins. Co. 83 Wis. 16, 53 N. W. 19.

It is beyond the power of a court of equity to invest a receiver with discretionary right to release or compromise with a stockholder with regard to the payment of his subscription, without notice to all the other stockholders.

The liability created by the statute of another state will be enforced against a resident stockholder of this state, when the remedy provided for that purpose may be properly enforced by the courts of this state without prejudice to her own citizens.

May v. Black, 77 Wis. 102, 45 N. W. 949; Fourth Nat. Bank v. Francklyn, 120 U. S. 747, 30 L. ed. 825, 7 Sup. Ct. Rep. 757; Pierce v. Milwaukee Constr. Co. 38 Wis. 253; Gager v. Bank of Edgerton, 101 Wis. 593, 77 N. W. 920; Hancock Nat. Bank v. Ellis, 172 Mass. 39, 42 L. R. A. 396, 51 N. E. 207; Bell v. Farwell, 176 Ill. 489, 42 L. R. A. 804, 52 N. E. 346.

Messrs. F. M. White and Fred W. Reed, for respondents:

The laws of Minnesota provide the ordinary liability of stockholders, and provide a remedy for its enforcement which is essentially equitable in its nature, and it is exclusive only to the extent that it must be governed by equitable rules and considerations.

National New Haven Bank v. Northwestern Guaranty Loan Co. 61 Minn. 375, 63 N. W. 1079; McKusick v. Seymour, S. & Co. 48 Minn. 158, 50 N. W. 1114; Harper v. Carroll, 66 Minn. 487, 69 N. W. 610, 1069; Elkhart Nat. Bank v, Converse, 58 U. S. App. 83, 87 Fed. Rep. 252, 30 C. C. A. 632; Hale v. Hardon, 95 Fed. Rep. 747, 37 C. C. A. 240.

Whatever the language in Allen v. Walsh, 25 Minn. 543, the statutes of Minnesota as interpreted by the court of last resort in that state do not provide a peculiar and exclusive remedy which cannot be enforced in another

state.

Hanson v. Davison, 73 Minn. 454, 76 N. W. 254.

The construction placed upon the statute by its court of last resort is binding on the Federal courts in these stockholder suits.

Bank of North America v. Rindge, 57 Fed. Rep. 279; Rhodes v. United States Nat. Bank, 24 U. S. App. 607, 34 L. R. A. 742, 66 Fed. Rep. 512, 13 C. C. A. 612; McVickar v. Jones, 70 Fed. Rep. 754; National Bank v. Whitman, 76 Fed. Rep. 697, 51 U. S. App. 536, 83 Fed. Rep. 288, 28 C. C. A. 404.

The liability of the stockholders must be determined according to the laws of the state of whose corporation defendant was a member.

Hancock Nat. Bank v. Ellis, 166 Mass.

414, 44 N. E. 349; Leonard v. Columbia | low, 86 Wis. 185, 71 N. W. 111; Williams v. Steam Nav. Co. 84 N. Y. 48, 38 Am. Rep. Meloy, 97 Wis. 561, 73 N. W. 40; 3 Thomp. 491. Corp. § 3059.

Hencke v. Twomey, 58 Minn. 550, 60 N. W. 667; Hanson v. Davison, 73 Minn. 454, 76 N. W. 254; First Nat. Bank v. Gustin Minerva Consol. Min. Co. 42 Minn. 327, 6 L. R. A. 676, 44 N. W. 198.

The liability is direct to the creditors. Minneapolis Baseball Co. v. City Bank, 66 Minn. 441, 38 L. R. A. 415, 69 N. W. 331; Re People's Live Stock Ins. Co. 56 Minn. 180, 57 N. W. 468.

And they can be sued on such liability before the corporate assets are exhausted.

Olson v. Cook, 57 Minn. 552, 59 N. W. 635; Booth v. Dear, 96 Wis. 516, 71 N. W. 816.

The obligation of the stockholder is primary and direct, and is not collateral to that of the bank or in the nature of surety. It is in the nature of a partnership liability.

Merchants' Bank v. Chandler, 19 Wis. 437; Coleman v. White, 14 Wis. 701, 80 Am. Dec. 797; Gianella v. Bigelow, 96 Wis. 185, 71 N. W. 111; Williams v. Meloy, 97 Wis. 561, 73 N. W. 40; Mohr v. Minnesota Elevator Co. 40 Minn. 343, 41 N. W. 1074; Allen v. Walsh, 25 Minn. 543; Gebhard v. Eastman, 7 Minn. 56, Gil. 40.

The liability is incurred when the stock is subscribed for,-both liability to pay the stock assessments and debts of the bank.

Holland v. Duluth Iron Min. & Development Co. 65 Minn. 324, 68 N. W. 50.

The liability is several, and not joint. Harper v. Carroll, 66 Minn. 487, 69 N. W. 610, 1069.

The courts of Minnesota recognize and enforce these suits against her citizens.

First Nat. Bank v. Gustin Minerva Consol. Min. Co. 42 Minn. 327, 6 L. R. A. 676, 44 N. W. 198; Rule v. Omega Stove & Grate Co. 64 Minn. 326, 67 N. W. 60; Hanson v. Davison, 73 Minn. 454, 76 N. W. 254.

25 S. W. 578, 27 S. W. 613; Holland v. Duluth Iron Min. & Development Co. 65 Minn. 324, 68 N. W. 50.

The proceedings had in the home court are conclusive on this defendant.

Holland v. Duluth Iron Min. & Development Co. 65 Minn. 324, 68 N. W. 50; Great Western Teleg. Co. v. Purdy, 162 U. S. 329, 40 L. ed. 986, 16 Sup. Ct. Rep. 810.

Not to enforce this judgment is to refuse to give due faith and credit to the judgment of a sister state.

Huntington v. Attrill, 146 U. S. 657, 36 L. ed. 1123, 13 Sup. Ct. Rep. 224; Pelzer Mfg. Co. v. Hamburg-Bremen F. Ins. Co. 71 Fed. Rep. 826; Central Trust Co. v. Charlotte, C. & A. R. Co. 65 Fed. Rep. 257.

Marshall, J., delivered the opinion of the court:

As we view this case, the disposition of the question of whether the complaint states facts sufficient to constitute a cause of action is decisive of the appeal. Some of the primary questions, upon which the ultimate question turns, are not free from difficulty.

The nature of the statutory liability of stockholders of a bank to its creditors under the laws of Minnesota is precisely the same as under the laws of this state, according to the adjudications of the highest judicial tribunal in each. Section 2501 of the Minnesota statutes says that each stockholder in a bank shall be individually liable, in an amount equal to double the amount of stock held by him, for all the debts of such bank. Section 47 of the banking act of this state provides that stockholders in a bank organized under the laws of this state, shall be individually responsible, to the amount of their respective shares of stock, for all its debts and liabilities of every kind. In Coleman v. White, 14 Wis. 700, 80 Am. Dec. 797, it was said, in substance, that such liability Patterson v. Lynde, 112 Ill. 196: Nimick is primary and absolute, attaching at the inv. Mingo Iron Works Co. 25 W. Va. 184; stant the liability of the bank accrues, but State Nat. Bank v. Sayward, 63 U. S. App. enforceable on a basis, akin to that of a part20, 91 Fed. Rep. 443, 33 C. C. A. 564; Elk-nership liability with the limitation fixed by hart Nat. Bank v. Converse, 58 U. S. App.statute, of the par value of the stock held by 83, 87 Fed. Rep. 255, 30 C. C. A. 632: Tuttle each stockholder. To the same effect are Giv. National Bank of the Republic, 161 Ill. 497, 34 L. R. A. 750, 44 N. E. 984; Bell v. Farwell, 176 Ill. 489, 42 L. R. A. 804, 52 N. E. 346.

This action is ancillary to the decree entered in the Minnesota court.

The judgment in the Minnesota court is binding here.

Harmon v. Hunt, 116 N. C. 678, 21 S. E. 559; Baltimore & O. R. Co. v. Smith, 54 Ohio St. 562, 44 N. E. 240; Guerney v. Moore, 131 Mo. 650, 32 S. W. 1132; Merchants' Bank v. Chandler, 19 Wis. 437; Powell v. Oregonian R. Co. 3 L. R. A. 201, 38 Fed. Rep. 187; Stephens v. Fox, 83 N. Y. 313; Alexander v. Donohoe, 143 N. Y. 203, 38 N. E. 263; Howard v. Glenn, 85 Ga. 238, 11 S. E. 610; Great Western Teleg. Co. v. Gray, 122 Ill. 630, 14 N. E. 214; Bates v. Great Western Teleg. Co. 134 Ill. 536, 25 N. E. 521; Hawkins v. Glenn, 131 U. S. 319, 33 L. ed. 184, 9 Sup. Ct. Rep. 739; Glenn v. Liggett, 135 U. S. 533, 34 L. ed. 262, 10 Sup. Ct. Rep. 867; Nichols v. Stevens, 123 Mo. 96,

anella v. Bigelow, 96 Wis. 186, 71 N. W. 111: Booth v. Dear, 96 Wis. 516, 71 N. W. 816: Gager v. Marsden, 101 Wis. 598, 77 N. W. 922; Foster v. Posson, 105 Wis. 99, 81 N. W. 124,—in which cases adjudications of the Minnesota court are cited as authority. The supreme court of Minnesota has decided that the liability is several of each stockholder to all the creditors, but joint in the sense that there must be one action in which all the liabilities of all the stockholders to all the creditors, and the equities of the stockholders between themselves, can be worked out. That is, in effect, as stated by this court, that the liability of the stockholders is akin to that of partners, with a limitation as to extent thereof fixed by the statute. Allen v. Walsh, 25 Minn. 543; Arthur v. Willius, 44 Minn. 409, 46 N. W. 851; Harper v. Carroll, 66 Minn. 487, 69 N. W. 610, 1069; Hanson v. Davison, 73 Minn. 454, 76 N. W. 254.

While the Minnesota court, in the two last

cases cited, said that the liability is several, | force a statutory right, is exclusive. 1 Am. not joint, it is evident that the expression was not intended in a strict legal sense, for it was there distinctly held that in respect to the manner the liability must necessarily be worked out, it is joint in that all the creditors participating must appear on one side of the controversy and all the stockholders charged, within the jurisdiction of the court, must appear on the other. The courts of the two states are in perfect harmony in that an action at law, as an original proceed ing, at least, cannot be brought in any jurisdiction by a single or any number of creditors against a single or any number of stockholders, and that the liability, in view of the manner in which it must be worked out, is nearer to that of partners to creditors of a partnership than to any other with which it can be compared, as was said by Dixon, Ch. J., in Coleman v. White.

rule here. Our attention is called to some recent adjudications which are said to conflict with the rule that a statutory liability of stockholders to creditors will not be enforced outside the jurisdiction of the state creating it, which, though in point as to the abstract question, are not as applied to the facts of this case.

that the enforcement, in the courts of Massachusetts, of the statutory liability of a stockholder, resident in that state, of a Kansas banking corporation, does no injustice to such stockholder, because, if he be compelled to pay, he has the same right to pursue his associate stockholders for contribution as if he were a citizen of, and compelled to respond to creditors in, Kansas; that the difficulties are no greater in the one case than in the other; that whatever difficulties exist, they were created by the Kansas statute, which permits individual actions at law against stockholders wherever they may be found, which law entered into the stockholder's contract with the corporation and its creditors when he became a member of such corporation.

So it will be seen that the Massachusetts

One of the most significant cases referred to is Hancock Nat. Bank v. Ellis, 172 Mass. 39, 42 L. R. A. 396, 51 N. E. 207. It differs from Marshall v. Sherman, 148 N. Y. 9, 34 L. R. A. 757, 42 N. E. 419, in that it holds that the statutory liability of stockholders under the Kansas statute can be enforced in a foreign jurisdiction, solely upon the ground, however, that the law of Kansas does not furnish an exclusive remedy to enforce the right, according as such law is construed in the home jurisdiction; that every stock-case, confidently relied upon by the respondholder is thus liable in an action at law, to ent, does not militate at all against the docthe first creditor who pursues him, in any trine that a statutory right, dependent in the court where service can be made upon him, home jurisdiction upon a statutory remedy, till he has paid the full amount of his stat- must be enforced in such jurisdiction or not utory liability, such liability being treated at all, nor against the doctrine that a statuas in every sense several and on contract, so tory right cannot be enforced in a foreign that the remedy of a creditor to enforce it jurisdiction unless all the necessary parties can as well be pursued in one jurisdiction as to an action of that kind are before the court, another; and that under such circumstances nor if its enforcement will violate the policy a foreign jurisdiction should lend its aid to or will subject the citizens of the foreign creditors against stockholders within its jurisdiction to serious inconvenience or inreach if thereby no serious inconvenience or justice. It was principally on the latter injustice will be inflicted upon its own citi- ground that the New York court, in Marshall zens. Turning to those statutes coupling a v. Sherman, declined to take jurisdiction. right with a remedy against stockholders, the court said: "This court has many times decided that the statutes of other states, creating the liability of stockholders to creditors of a corporation, which provide for a suit of a special kind to which the corporation and all the stockholders are to be made parties, will not in general be enforced by the courts of this state. The special remedy provided by the statute must be pursued, and as the statutes of a state have no force ex proprio vigore beyond the territorial limits of the state, the remedy usually must be pursued in the state where the corpora tion has been established and the statutes passed;" citing numerous cases in that and other courts, including May v. Black, 77 Wis. 102, 45 N. W. 949. The court, having come to the conclusion that the cause of action under the Kansas statute was transi-eign court should not lend its aid to the entory, tested the question of whether courts of Massachusetts should take jurisdiction to enforce it by the general principles governing the conduct of courts in enforcing rights dependent upon foreign laws, which principles, other than such as relate to penal statutes, were stated, in substance, as follows: The foreign law must not contravene the policy of the state whose jurisdiction is invoked, or be contrary to public morals or abstract justice, or be calculated to injure the state or its citizens; the jurisdiction invoked must be able to reach all the parties affected by the litigation, so as to do complete justice between them, and it must be able to attain that end consistent with its own forms of procedure. Testing the situation before the court by such principles, it was concluded

Another case confidently referred to is Western Nat. Bank v. Lawrence, 117 Mich. 669, 76 N. W. 105. The action was to enforce a statutory liability created by the Kansas statute, and jurisdiction was taken for the same reason as that stated by the Massachusetts court in the case before referred to, that is, upon the sole ground that the liability under the Kansas statute, as construed by its court, is enforceable by an action against any stockholder as an or-. dinary liability on contract, till such stockholder shall have paid to creditors the full amount for which he is responsible; that the action is transitory and should be enforced in all jurisdictions the same as other actions on contract, that can be as well enforced in one jurisdiction as in another, and where there is no good reason why the for

forcement of the right. True, the Michigan court made the extraordinary statement that the right to maintain a suit to enforce a statutory right under the Kansas statute in Michigan does not depend upon the law of comity. That was unnecessary to the deci sion. It is directly contrary to Hancock Nat. Bank v. Ellis and, as it seems, to elementary principles. In all cases where a court is called upon to give effect to a right dependent upon a foreign statute, it involves the enforcement of a foreign law and its action in that regard depends upon the rule of comity. That, as it seems, is too clear for reasonable controversy.

Neither Hancock Nat. Bank v. Ellis, Western Nat. Bank v. Lawrence, Bell v. Farwell, 176 Ill. 189, 42 L. R. A. 804, 52 N. E. 346,