and 112 New York State Reporter

"Commonwealth of Massachusetts, Suffolk-ss.: At a probate court holden at Boston, in and for said county of Suffolk, on the 25th day of March, in the year of our Lord 1897, on the petition of Georgia L. Everett, of Boston, in said county, the wife of Edward Everett, of said Boston, praying that said court will make such order as it deems expedient concerning her support, said Edward Everett having appeared by his attorney, and it appearing to the court, after hearing thereon, that the prayer of said petition should not be granted, it is ordered that said petition be dismissed.

"Robert Grant, Judge of Probate Court."

The learned justice at special term held that the decree of the probate court was a determination on the merits, that it was a conclusive determination that the plaintiff was married to Morrison at the time of the Courtney ceremony, and thereupon directed the dismissal of the complaint; and from the judgment entered thereon the plaintiff appeals.

Our decision of this appeal must rest upon a determination of the question whether the decree of the probate court was a decision upon the merits, or simply a nonsuit. In Genet v. Canal Co., 170 N. Y. 278, 63 N. E. 350, Chief Judge Parker, speaking for the court, said (page 279, 170 N. Y., page 350, 63 N. E.):

"It is not sufficient for a party who sets up a prior judgment as a bar or seeks to introduce it as conclusive evidence to produce a record showing a judicial determination in his favor of the question in litigation. He must further show, and by the judgment roll, that the judgment was rendered upon the merits, and cause it to appear that the question was a material one in the former action."

Section 1209 of the Code of Civil Procedure reads:

“A final judgment, dismissing the complaint, either before or after a trial, rendered in an action hereafter commenced, does not prevent a new action for the same cause of action, unless it expressly declares, or it appears by the judgment roll, that it is rendered upon the merits."

In Clapp v. Thomas, 5 Allen, 158, Judge Metcalf cited with approval what was said in March, Arb. 215, that a nonsuit "is but like blowing out of a candle, which a man at his own pleasure lights again." The Code makes no distinction between domestic and foreign judgments. Judge Cullen pointed out, in Genet v. Canal Co., 163 N. Y. 173, 57 N. E. 297, that it is stated in the codifiers' notes that the object of the section (1209) was to make the rule as to nonsuits which obtains in actions at law applicable to actions in equity. So we must apply the rule stated by Judge Parker to the decree of the probate court, and, as it does not appear by the judgment roll that the judgment was rendered upon the merits, hold that it was merely a nonsuit. It is said in 1 Freem. Judgm. p. 273, that the rule is now generally conceded that parol evidence may be received for the purpose of showing whether a question was determined in a former suit, and that the estoppel extends, beyond what appears in the face of the judgment, to every allegation which, having been made on one side and denied on the other, was at issue and determined in the proceedings. So, doubtless, the testimony of the lawyers on both sides in the probate court was introduced on the present trial without objection, for the purpose of showing that by the practice of the probate court its decree involved the question whether the plaintiff was in fact the wife of the defendant, and that such ques

tion was material to the decision, as stated in the Genet Case. In this view the course of the trial in the probate court becomes material. The plaintiff alleged that she was the wife of the defendant. Under order of the court she specified both the Courtney marriage and a subsequent common-law marriage. Defendant's counsel introduced the judgment of our supreme court, annulling the Courtney marriage. Plaintiff's counsel in the probate court seems to have conceded that this was a bar to her cause of action, and he made no reference to the common-law marriage, but asked the court to insert in the decree a clause that such dismissal was without prejudice. This was not done, and the decree is, by its terms, simply a dismissal, and not a decree upon the merits.

One of the counsel for the defendant before the probate court testified on the trial of the present case that:

"Under the decision of the court made that day, Mrs. Everett could come in again, as I understand it, provided she in the meantime had that decree of the supreme court and that record annulled and reversed. While that record and decree stood as it was when we introduced it into the case,while that stood in the way,-this was a final decree; but the court stated in words substantially to this effect: that it would not say she could not come back again if the New York decree, which I have referred to, was reversed or set aside; otherwise not, as I understand the court,-final except for that reason."

If the decree is in the nature of a nonsuit, it is not res judicata upon the fifth defense before the special term. It is true that the plaintiff's petition was necessarily based on the fact of a valid and subsisting marriage between her and the plaintiff, and that the probate court was called upon to decide that question, and did decide it in favor of the defendant by giving faith to the judgment of our court; but the attention of the probate court does not seem to have been called to the fact that the allegation or specification of the petitioner also alleged a common-law marriage. No evidence was offered in the probate court upon that subject. The proceedings seem to have been conducted solely with relation to the Courtney ceremony, and without reference to the common-law marriage.

We must not lost sight of the fact that the present action is brought to annul the decree of April 4, 1888, which annulled the Courtney ceremony. There is a prayer that it be adjudged and decreed that "the marriage contract heretofore made between the plaintiff and the defendant is still binding, and that the marriage between this plaintiff and the defendant is still in full force and effect." This, however, evidently relates to the Courtney marriage, and not to any common-law marriage.

It is clear to me that the decree of the probate court was simply as for a nonsuit, and is not res judicata in the present action. It follows that the judgment should be reversed.

(39 Misc. Rep. 3.)

and 112 New York State Reporter

LANG v. LUTZ et al.

(Supreme Court, Special Term, Erie County. October 20, 1902.)

1. CORPORATIONS-STOCKHOLDERS' LIABILITY-CREDITORS' RIGHT TO SUE. Stock Corp. Law, § 54, as amended by Laws 1901, c. 354, provides that every holder of capital stock not fully paid in any stock corporation shall be personally liable to its creditors to an amount equal to the amount unpaid on the stock held by him for debts of the corporation contracted while such stock was so held. Held, that such statuie was declaratory of the common law only, and, as unpaid stock subscriptions constituted an asset of the corporation on dissolution, recoverable by the receiver for the benefit of all its creditors, an action to recover such subscriptions was not maintainable by a creditor for his own benefit.

Action by Margaret Lang against John C. Lutz and others. Demurrer to the complaint. Sustained.

Lyndon D. Wood, for plaintiff.

Charles F. Tabor, for defendants.

KENEFICK, J. This action is brought by a creditor of an insolvent domestic corporation against six of its stockholders to enforce their liability under section 54 of the stock corporation law, as amended by chapter 354 of the Laws of 1901. That section, so far as it is applicable here, reads:

"Every holder of capital stock not fully paid, in any stock corporation, shall be personally liable to its creditors, to an amount equal to the amount unpaid on the stock held by him for debts of the corporation contracted while such stock was held by him."

Prior to the amendment the section read:

"The stockholders of every stock corporation shall jointly and severally be personally liable to its creditors to an amount equal to the amount of stock held by them respectively for every debt of the corporation until the whole amount of its capital stock issued and outstanding at the time such debt was incurred shall have been fully paid in."

A comparison of the original and of the amended provision readily discloses that a radical change has been effected in the liability of stockholders for corporate debts. The liability under the original section was statutory in the sense that without the statute no such liability existed. It inured to the benefit, not of the corporation, but of such of the creditors as fell within the prescribed conditions. It was not an asset of the corporation, did not pass to a receiver, and could not be enforced by him. Such was the construction given to a somewhat similar provision of the general manufacturing act (Laws 1848, c. 40) in the case of Farnsworth v. Wood, 91 N. Y. 308. The amended section imposes no obligation upon the stockholder which did not exist. without it. The amount unpaid upon his stock is a debt which the delinquent stockholder owes the corporation, and which the corporation or its legal representative can enforce (Stoddard v. Lum, 159 N. Y. 265, 53 N. E. 1108, 45 L. R. A. 551, 70 Am. St. Rep. 541), or which could be enforced by a bill in equity filed by a creditor in behalf of all

¶ 1. See Corporations, vol. 12, Cent. Dig. §§ 2205, 2267.

the creditors against the corporation and all the delinquent stockholders (Mann v. Pentz, 3 N. Ý. 415). A like provision in the general railroad act of 1850 was considered in the case of Stephens v. Fox, 83 N. Y. 313. There the court says (page 316):

"The liability of the stockholder is not created or enlarged by statute. It rests upon no contract with the corporation, and the creditor is simply subrogated to the claim of the corporation against its debtor in case he avails himself of his right under the statute to pursue the stockholder as such debtor to the corporation. A payment by the stockholder to the creditor upon a recovery by him under the statute will discharge the stockholder pro tanto from his indebtedness to the corporation."

The same doctrine was laid down in the earlier case of Mills v. Stewart, 41 N. Y. 384. The amended section, therefore, but recognizes a pre-existing liability upon the part of the delinquent stockholder, and confers upon the creditor a new remedy to enforce it.

With a clear understanding of the force of the statute under which this action is instituted, the solution of the question presented by this demurrer is not difficult. The demurrer challenges the right of the creditor to maintain this action after final judgment has been rendered in proceedings for voluntary dissolution, dissolving the corporation, appointing a permanent receiver thereof, and restraining the creditors from instituting or prosecuting any action against it. The effect of the voluntary dissolution of the corporation was to place all its property and assets in custodia legis, to be collected and applied by a person to be appointed by the court. The indebtedness of the stockholders upon their stock, being an asset of the corporation, passed to the receiver, who became trustee of the insolvent estate for the benefit of the creditors and stockholders. Rev. St. pt. 3, tit. 4, c. 8, art. 3, § 67. The receiver is required to immediately proceed to recover the amounts so unpaid upon stock, and is authorized to institute an action either at law or in equity to enforce a recovery. Id. § 69. It is also his duty to distribute the property of the corporation among its creditors in proportion to their debts, giving a preference only to those who are entitled thereto by the laws of the United States and to those having a lien on real estate. Id. § 79. This action seeks to lay hold of a corporate asset which has already passed to the receiver, collect it, and appropriate the proceeds to the payment of the claim of a single credit

If permitted, the creditor obtains a preference, and the equal distribution of insolvent estate between all the creditors which the law contemplates is defeated. The final judgment in the dissolution proceeding enjoins any creditor from instituting or prosecuting any action against it for the recovery of a sum of money. While this action is

nominally against the stockholders, it is in effect against the corporation, because it seeks to collect a corporate asset to satisfy a corporate debt, and it therefore falls within the purview of the restraining decree. The considerations here set forth are insuperable objections to the maintenance of this action. Rankine v. Ellis, 16 N. Y. 377, affirming 14 How. Prac. 339.

The creditor is not without redress. He may call upon the receiver to institute the action, and, in case of the latter's unreasonable neglect or refusal to do so, it may be prosecuted by the creditor in behalf of all the creditors making the receiver a party defendant. Fisher v.

and 112 New York State Reporter

Andrews, 37 Hun, 176; Greaves v. Gouge, 69 N. Y. 154; Brinckerhoff v. Bostwick, 88 N. Y. 52, 59.

The demurrer is sustained, with costs.

(75 App. Div. 330.)

SCHLOTTERER v. NEW YORK & B. FERRY CO.

IN FORMER ACTION.

(Supreme Court, Appellate Division, Second Department. October 10, 1902.) 1. CARRIERS-FERRY-COLLISION-NEGLIGENCE-TRIAL-EVIDENCE-COMPLAINT In an action by an infant, by her guardian ad litem, for injuries sustained while a passenger on defendant's ferry, owing to a collision between the ferry and another vessel, defendant claimed that no collision had occurred on the day alleged by plaintiff, and was permitted to read in evidence part of a complaint in a prior action by plaintiff, by her guardian, for the same accident. Held, that the evidence was erroneously admitted; the guardian, though she had verified such complaint, not having been present at the accident, and it not appearing that plaintiff had verified it, read it, or been concerned in its composition.

2. SAME-INSTRUCTIONS-VIOLATION OF STATUTE.

In an action for injuries sustained while a passenger on defendant's ferry, owing to a collision between the ferry and another vessel in a fog. there being evidence that the whistle of the ferry was not being sounded as required by 2 Supp. Rev. St. U. S. p. 633, c. 4, it was error to refuse to charge that the noncompliance with the statute was prima facie negligence.

3. SAME-CARE REQUIRED.

In an action for injuries sustained while a passenger on defendant's ferry, owing to a collision between the ferry and another vessel, an instruction that a high degree of care was required of defendant was error; the measure of care imposed being the highest care.

Appeal from trial term, Kings county.

Action by Louisa Schlotterer, by her guardian ad litem, against the New York & Brooklyn Ferry Company. From a judgment for defendant, plaintiff appeals. Reversed.

Argued before GOODRICH, P. J., and BARTLETT, WOODWARD, HIRSCHBERG, and JENKS, JJ.

Alfred E. Sander, for appellant.

Augustus Van Wyck (J. Delahunty, on the brief), for respondent.

HIRSCHBERG, J. The plaintiff's evidence tended to show that while a passenger crossing the East river on one of the defendant's steam ferryboats, on the morning of February 9, 1898, she was injured in a collision with another vessel. Her evidence further tended to show that there was a very dense fog at the time, and that the boat was proceeding at the usual speed without sounding the fog whistles required by the provisions of chapter 4, p. 633, 2 Supp. Rev. St. U. S. On the other hand, the defendant's evidence tended very strongly to show that no collision occurred on the day named; and the verdict, if resting on the testimony alone, would be unassailable. The court, however, under objection and exception, permitted the defendant to read in evidence a part of a complaint framed in a prior action brought by her guardian ad litem for the same accident, in which a different day was stated as the date of the collision. The object of this was to con