Scott v. Windham
Scott v. Windham
Opinion of the Court
delivered the opinion of the court.
The facts that the subscription of the appellant to the stock of the now insolvent corporation was, by its terms, payable on the call of the directors, and'that no call has been made for the sum remaining unpaid, does not, as against the creditors of the corporation, protect the subscriber from suit. Nor is it material that, instead of resorting to a proceeding in equity or at law, as he might have done, the plaintiff has proceeded by garnisheeing the stockholder. The end and purpose of this action is to subject the debt due by the stockholder to the debt due by the company, and the same principles are applicable.
But, though the appellant was liable to garnishment, the judgment against her should have been so framed as to protect her from danger of a double liability, and should also have recognized and preserved the prior right of satisfaction of the Camp Manufacturing Company. It is provided by the code, § 8éé, that: ££In all corporations, each stockholder shall be
The contention of the appellee that by the service of his writ he secured a lien on the debt due by appellant, while the Camp Manufacturing Company acquired no right to this debt until the date of its judgment against her, which was subsequent to the service of the writ of garnishment, is wholly without merit. When the judgment of the Camp Manufacturing Company was rendered, it became operative by relation, as of the date of the commencement of the suit, so far as the right to the debt due by the defendant therein was concerned, and had priority over all intervening claims.
The judgment of the lower court should have provided that no execution should issue against the appellant until satisfaction of the judgment of the Camp Manufacturing Company, and then only for so much, if anything, as should be then due and unpaid by the appellant on account of her subscription to the stock of the Delta Insurance Company as fixed by the judgment. Yazoo & Mississippi Valley Railroad Co. v. Fulton, 71 Miss., 386.
Judgment reversed.
Reference
- Full Case Name
- Hannah Scott v. W. F. Windham
- Status
- Published
- Syllabus
- 1. Stockholder. Unpaid subscription. Garnishment. Liable without call. Code 1892, A stockholder in an insolvent corporation who has not paid his stock subscription is liable to the creditors of the corporation, and may be s^^ed therefor under $ 844, code of 1892, and the debt so due by him may be subjected by garnishment as well as in a direct proceeding-, and, although the subscription is, by its terms, payable on the call of the directors, and no such call has been in fact made. 2. Same. Garnishnnent and direct sitit. Garnishment subordinate to judgment in suit brought prior thereto. Where a creditor of an insolvent corporation sues and recovers judg ment against a stockholder for the amount due on his stock subscription, and a garnishment is served on the stockholder at the instance of another creditor pending such suit, the judgment so recovered relates back to the institution of the suit, and has priority over the intervening garnishment. 3. Same. Subsequent judgment. Execution restn'icted. A subsequent judgment against the stockholder in favor of one creditor of the corporation is erroneous if it fails to provide that no execution shall issue against him until satisfaction of an earlier judgment against him in favor of another creditor of the corporation, and then only for so much, if anything, as may remain due on the subscription.