Lucas Common Pleas Court,

this liability has been adjudged and enforced as against the stockholders, nor the distribution of the money that may have been realized under the judgment in that case.

It is further earnestly and ably contended that, it appearing by the allegations of the petition that the plaintiffs herein not having been actual parties to the record in the Sturges case, are not precluded or estopped from the commencement of an action to subject this remaining statutory liability of the defendants to the payment of their judgment; that this liability existed prior to the amendment of 1894 to section 3260, and that the right being then in existence, it was competent for the legislature to provide by that amendment for the method of enforcing this liability.

Counsel cited and rely upon, as directly supporting this proposition, Hamilton & Rockfellow v. Insurance Co., 3, O. D. 389. The decision there was by Judge Evans, of the Franklin common pleas, and supports the plaintiffs contention, with this qualification: The decision there is based largely upon the absence of knowledge on the part of the creditors in that case of the pendency of the proceedings, and upon the fact that these creditors were, at the time of these proceedings, nonresidents of the state. The learned judge says on page 390.

“A final decree, in an action of the nature contemplated by section 3260, is conclusive as to all the corporate creditors who were actual parties to that action, either as plaintiffs or cross-petitioners, and is equally conclusive as to all such creditors who were parties thereto by representation only, who accepted the benefit of such decree; and, also as to all such creditors who although not actual parties thereto, had notice of the pendency of the action, and an opportunity to come in and exhibit their claims, but who refused or neglected to do so. But the plaintiffs in this action, Hamilton & Rockfellow, who are now seeking relief, were not actual parties to the former action; they received none of its benefits, were non-residents of Ohio, had no notice of the former action for more than two years after the final decree thereon was entered."

And further on, on the same page, he says:

"The facts and circumstances of this case as disclosed by the pleadings and evidence, induce the belief that the decree which the defendants have pleaded in bar in this action, is not conclusive of the rights of Hamilton & Rockfellow in this action. They did not have notice of 'the pendency of the former action,' have not had a day in court, nor an opportunity to come in' in the former action and exhibit their claim, and obtain the relief which they should have received."

The correctness of the position, that the want of actual notice to a particular creditor during the pendency of such a case, would enable him to come in with a new action, after the rendering of a final decree therein, seems to me-with all due deference to the opinion of the learned judge-to be one still open for discussion.

Judge Evans refers to, and counsel for plaintiffs cite, the language used in Pomeroy's Remedies in support of the rule claimed: that "when one brings an action on behalf of himself and others, that in order to be bound by the decree in the case, a party other than the actual plaintiff, must, in some way, and by some affirmative act on his part, come in and adopt the act of the plaintiff in bringing suit."

Mr. Pomeroy devotes an entire chapter to the discussion of the Code provision stated by him in his section 388-the first in the chapter-and, in a note, cites section 37 of our code (now section 5008 of the Revised Statutes). The statutory provision as quoted by Mr. Pomeroy, is as follows:

"When the question is one of a common or general interest of many persons, or when the parties are very numerous and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of the whole."

It will be seen by comparison, that this is the exact language used in the section of the Ohio code. The discussion therefore, of the learned author in this chapter must be taken in connection with this provision of the statute, with similar provisions; as, for instance, the provisions in reference to assignments by

Swan v. Railway Co. et al.

failing debtor's where publication is made to creditors to come in and unite in an action and for the priority of such creditors in the distribution of the proceeds of such action, and I seriously question the propriety of applying all that Mr. Pomeroy says in this chapter to an action brought to enforce the stockholders' liability.

Counsel also cite and rely upon section 545 of Black on Judgments. In that section the author is referring to proceedings for the foreclosure of corporation mortgages, where the parties are so numerous as to render it impracticable to bring into the case all the lienholders, and where provision is made permitting such lienholders to come in and prove their claims and share in the distribution. The author cities Carpenter v. Canal Co., 35 Ohio St., 307; and Kerr v. Blodgett, 40 New York, 66. Both these cases are discussed by counsel both for the plaintiff and defendants. The Ohio case arose under section 37, now (5008) of our code, and the court says in its opinion, on page 316, after citing that section:

"And no doubt a judgment or order in such case is binding on all persons standing in the like predicament; but the court will take 'care that sufficient persons are before it honestly, fairly and fully to ascertain and try the general right in contest." Story's Eq. Pl., section 120.

Counsel for the plaintiff claims that this statement was not important in the case, for the reason that it appeared that the creditor there had proven his claim before the master, and it may therefore be said that this statement of the court is mere dicta.

The case in 48 New York, was one in insolvency where under a statute similar to our own, notice to creditors had been made public, and the court held that all creditors who failed to come in were barred-whether they had or had not notice of the proceedings. This case is therefore not directly in point here, although the opinion of the court as delivered by Judge Earl, states, in very vigorous language, supported by high authority, rules of equity which are worthy of careful

consideration.

Now, however, consuming further time or space in discussing the views of either text writers or decisions as to general rules of equity applicable to different classes of creditors in different kinds of equity proceedings, I will come directly to the discussion of the questions affecting the right of creditors and the liabilities of stockholders under the Ohio Statute, as construed by the decisions of our own state. And in considering this question under our statute, and as shown by Ohio decisions, I am of the opinion that the following principles must be kept in mind:

1. This liability is purely a creature of the statute; it is wholly unknown to the common law. Neither at law nor in equity was a stockholder liable for the payment of the debts of a corporation in which he held stock; he only risked the loss of the investment made by him in the subscription for or purchase of his stock. The statute creates a new right, and where the statute itself prescribes a remedy, that remedy must be exclusively followed.

2. While this liability is, in Ohio, an individual and several liability of the stockholder, on which a personal judgment may be rendered against him, yet it is not an absolute and unconditional liability, enforcible against him in any event for the full amount. It is not a primary obligation to pay the debts of the corporation, but only a secondary and collateral obligation, enforcible in case of the insolvency of the corporation, requiring him to contribute in connection with other stockholders, in proportion that the amount of his stock bears to the whole, to a common fund as security for the payment of the debts of the corporation.

3. No right is given to any individual creditor to hold either any stockholders or all the stockholders liable for the payment of his separate debt, to the exclusion or regardless of his rights of other creditors, Each creditor has a right to require that all the stockholders shall contribute to this common fund, to an amount not in excess of the face of their stock, and that he shall have in com

Lucas Common Pleas Court.

mon with all other creditors, his pro rata share of that fund. These were the rights and liabilities existing between the creditors and the stockholders of this railroad company under section 3258, prior to the enactment either of the original section 3260, or its amendment. Neither the original act regulating the creation and regulation of corporations under the constitution of 1851, nor any amendment of the same down to the revision of 1880, designated the kind of action, or prescribed the mode of proceedings under which this liability was to be enforced. There has at all times been, and still is, great diversity in the statutes of different states in their provisions as to the liability of stockholders in corporations, and as to the methods of enforcement of this liability. And prior to the decisions in 17 Ohio St., it was claimed, upon analogy with proceedings in other states for the enforcement of this liability, that any creditor, upon obtaining judgment against a corporation, and upon an execution upon such judgment being returned unsatisfied, might bring his separate action against any of the stockholders of the corporation, and, have personal judgment against them, or either of them, to the amount of his debt, limited only by the amount of the stock held. This was the practice in this court prior to these decisions, and it was such a judgment that was reversed in the case of Wright v. McCormack, 17 Ohio St., 37. That decision, however, and the decision in the case of Umsted v. Buskirk, in the same volume, page 114, have furnished the basis of all subsequent proceedings, and were substantially incorporated into the statutes by enactment of section 3260, in the revision of 1880. The pertinency and importance of the decision in Wright v. McCormack, will sufficiently appear from the following quotations from the opinion of Judge White, who announced the opinion of the court above in that case and in the case of Umsted v. Buskirk. On page 93 the judge says:

"The object of the second defense is to set up the pendency of the suit in the Hocking common pleas as a bar, and to turn the plaintiff, McCormack, over to that action for his remedy, thus relieving the defendants of the burden of being required to respond in separate suits, instituted in different courts, for the enforcement of their liability."

And on page 96, he concludes the opinion of the court in the following language:

"The liability on the part of the stockholders is several in its nature, but the right arising out of this liability wouid seem to be intended for the common and equal benefit of all the creditors. But, however this may be, we are unanimously of the opinion that, where proceedings are instituted by part of the creditors of an insolvent corporation against the stockholders, to enforce such liability for the benefit of all the creditors, no creditor can acquire priority, or institute a separate suit for the enforcement of such liability in his own bèhalf.

"The final judgment of the common pleas, and the judgment sustaining the demurrer to the second defense are reversed, and the cause remanded for further proceedings."

The syllabus in the case of Umsted v. Buskirk, page 114, embodies these principles fully.

I have been furnished by counsel for the demurrants, both in oral and written argument, an exhaustive review of all the Ohio cases touching the question of the finality of the judgment or decree in the Sturges case. It is not, however, important that I should follow them in this review; my province is only to give the conclusions to which I have arrived.

I have also listened carefully to the able argument of the distinguished counsel for the plaintiff-who has since so suddenly died-and fully examined his brief, and the extended notes which I took of his oral argument, and my clear conviction, after the best consideration which I am able to give to the subject, is, that this first position of counsel for the demurrant is fully sustained by and in full accord with the unbroken line of Ohio decisions upon the subject of the

Swan v. Railway Co. et al

liability of stockholders and the rights and remedies of creditors of corporations under the statutes of Ohio.

In view, however, of the pertinency of the decision and the main argument of counsel for the plaintiff upon this question, I make special reference to the case of Bullock v. Kilgore, 39 Ohio St. 543. In that case there had been an action by one creditor for the benefit of all. Judgment had been rendered against the stockholders for a certain percentage of the stockholders' liability, leaving the balance unexhausted. After the final decree in that case, a supplemental petition was filed seeking to make a further charge against the stockholders because of the failure- by reason of the insolvency of some of the stockholders --to realize the full amount of the debts of the corporation. The court, after stating the object and purpose of the action, and referring, among others, to the case of Umsted v. Buskirk, on page 546, concludes its opinion as follows:

"Bullock and Lewis were parties defendant, and the cause of action against them existed at the time the suit was brought, whether their liability, as stockholders attached at that time, or when the debts of the company were contracted. It was the duty of the court, under the allegations of the petition to determine the extent of their liability, whether primary or ultimate, and the court did determine that they were th holders of stock to the amount of sixteen hundred dollars, and were therefore liable to contribute towards the payment of the company's debts, the sum of six hundred and fifty-two dollars, for which judgment was rendered against them. While this judgment remains in force it is a conclusive determination of their liability as stockholders to pay the amount of such judgment, and no more."

In my opinion, the language there used should be applied to this case, and that so long as the judgment of the Richland county circuit court remains in force, it is a conclusive determination of the liability of the defendant stockholders in this case.

Counsel in argument have not discussed the question, whether the allegation in the petition, made against the Pennsylvania company, and not against any other defendant, that it was an original subscriber to the stock and had not paid any part of the subscription price, placed that company in any different position so far as this demurrer is concerned, from that of other stockholders.

I presume that it is conceded that if the judgment in the Sturges case is final, it is so as to any and every stockholder who was a party as to all of such liability "whether primary or ultimate." I hold that it was so final as to the Pennsylvania company, not withstanding that allegation. If I am wrong as to the finality of the judgment, then the question of payment or non-payment of the subscription price might be important in determining the amount or extent of the liability. In this view of the case, it is unnecessary for me at this time to consider any of the other questions so fully and ably argued by the respective counsel. If this judgment of the circuit court should be reversed in the supreme court, or in any other way vacated, these questions, or some of them, or perhaps other important questions, may arise; but we need not now either discuss or anticipate them. The demurrers will be sustained.

Hurd, Brumback and Thatcher, for Plaintiffs.

Harrison, Olds & Henderson, Judge Dirlam, and E. W. Tolerton, for Defendants.

Cuyahoga Common Pleas Court.

MARRIAGE-DOWER.

[Cuyahoga Common Pleas Court, January 15, 1897.]

MARY A. KENNELLY V. JOHN B. COWLE.

RIGHT TO DOWER ARISES ONLY IN CASES OF A LAWFUL MARRIAGE.

Where a woman innocently marries and cohabits with a man who has a wife living from whom he has never been divorced, she cannot acquire any interest in any lands or personalty owned by her supposed husband, by reason of such marriage, because the right to dower arises only in cases of lawful marriage.

DISSETTE, J.

This is an action for the assignment of dower in certain property described in the petition. The plaintiff alleges that on or about the 8th day of October, 1860, she was married to one Martin Murphy; that from that date until the May term of 1868 of the common pleas court of this county she was and remained the wife of the said Martin Murphy; that at that term of said court, she was by the judgment and decree of said court, divorced from the said Martin Murphy on the ground of his aggressions and wrong doing; that she was vested with the custody and control of a child that was born to them, and that she was also restored to her maiden name of Mary Kennelly; that during the time that she was.living with the said Martin Murphy, he was the owner in fee and in possession by purchase of the real estate described in the petition. And plaintiff says that on the 23d day of July, 1868, and after the decree of divorce has been granted, said Murphy sold said real estate to Margaret Murphy, his mother, for the sum of $7,800.00, and made his sole deed therefor; that plaintiff did not join in the said conveyance, and has not conveyed by deed or otherwise her dower interest in said real estate; that said Margaret Murphy has since sold the premises and that John B. Cowle, the defendant, is now the owner. She further claims that on the. 24th day of August, 1896, she demanded of said defendant in writing, that he assign and set off to her, her dower interest in said real estate, but that he refused to so do; and she said that Martin Murphy departed this life in the month of March, 1880; and from that time she was and still is entitled to dower in said real estate; that more than thirty days have elapsed since she made demand of dower; and she prays that the defendant may be ordered and decreed to assign to her one full and equal one-third part of said premises as her dower in said real estate, and for such other and further relief as in equity she may be entitled to.

To this the defendant files an answer and cross-petition. The answer alone concerns us in this discussion. After admitting the marriage of said Murphy at the time alleged in the petition, the defendant says that the said Martin Murphy, at the time he was married to the plaintiff in this action, had a wife then living whom he had lawfully married; that the pretended marriage to Murphy was void and of no effect; and he denies that Mary A. Kennelly, the plaintiff herein, was at any time the wife of said Martin Murphy, and avers that on or about the May term, 1868, of the court of common pleas of this county, in a suit and proceeding then pending, in which the said Mary A. Kennelly, calling herself Mary A. Murphy, was plaintiff, and the said Martin Murphy was defendant, a judgment and decree was rendered in and by said court in which it was found by the court, that at the time of said pretended marriage of Mary A. Kennelly to the said Martin Murphy, that said Martin Murphy was the lawful husband of another woman who was then his wife. He denies that said Martin Murphy was at any time the owner in fee or of any interest in the lands in the petition described, while the said plaintiff was his wife, or that she ever was the wife of the said Martin Murphy. He denies further, that the plaintiff ever had any dower estate or interest in the lands described in said petition, or ever owned or possessed an inchoate right of dower therein. He admits that he is now the