On appeal from the Supreme Court.
For the appellants, Carl A. Feick.
For the respondent, George W. C. McCarter (Ralph M. Arkush, of the New York bar).
The opinion of the court was delivered by
PARKER, J. The original defendant was Christian Fleissner, who died after suit was begun, and his executors were substituted. It is an action at law, based on the claim that Fleissner acquired six thousand three hundred and seventy-five shares of stock of "Maxim Corporation" at a nominal price, and with knowledge, or charged with knowledge, that such stock had been issued at a grossly excessive and fraudulent valuation of certain patents constituting practically all the assets of the company; that the company, a Delaware corporation, went into bankruptcy in New York, and in that bankruptcy proceeding the deficiency was ascertained and apportioned among existing or former stockholders, among whom was Fleissner, who was assessed about $19,000 in the bankruptcy court, and the trustee came over to New Jersey where Fleissner lived, and sued in our Supreme Court to collect that amount. The jury found for the plaintiff and defendants appeal.
The first point made for appellants is as follows:
1. That because of section 2 of Pamph. L. 1897, p. 124, reprinted in Comp. Stat., p. 1656, pl. 94 b, either no such action would lie at all with respect to a corporation of another state, or if it would lie, it should be a suit in equity bringing in all parties charged and settling all the rights and liabilities. The statute reads:
"2. No action or proceeding shall be maintained in any court of law of this state against any stockholder, officer or director of any domestic or foreign corporation by or on behalf of any creditor of such corporation to enforce any statutory personal liability of such stockholder, officer or director for or upon any debt, default or obligation of such corporation, whether such statutory personal liability be deemed penal or contractual, if such statutory personal liability be created by or arise from the statutes or laws of any other state or foreign country, and no pending or future action or proceeding to enforce any such statutory personal liability shall be maintained in any court of this state other than in a nature of an equitable accounting for the proportionate benefit
of all parties interested, to which such corporation and its legal representatives, if any, and all of its creditors and all of its stockholders shall be necessary parties."
This point is involved in the refusal by the trial court to strike out the complaint; its action in striking out the seventh separate defense; and in overruling objection in point of law to the complaint, reserved in the answer.
The proposition advanced for the appellants is that, notwithstanding an apparently valid bankruptcy proceeding in a federal court, in which stockholders are held to be constructively notified (McDermott v. Woodhouse, 87 N.J. Eq. 615), in which all the equities were considered, and the deficit equitably apportioned among them and ascertained as to Fleissner, when the trustee comes to New Jersey to collect the share of the adjudicated deficit apportioned to Fleissner, he must begin all over again in an equity suit embracing all parties, for the purpose of obtaining an apportionment de novo. We do not take this view of the matter: on the contrary, we agree with counsel for respondent that the phrase "statutory personal liability" in the statute means personal liability imposed by statute extra the common law liability to make up a deficit of par value, i.e., the so-called "trust fund" theory of capital stock. Johnson v. Tennessee Oil Co., 74 Id. 32, 37. In fact in McDermott v. Woodhouses, supra, we expressly held that our courts would not cast up the assets and liabilities of a foreign corporation for the purpose of enforcing this "trust fund" liability as against individual shareholders. We there said this must be done at the domicile of the corporation; but a bankruptcy court may perform the same office. The point made we consider to be without merit.
The seventh separate defense was properly struck out; the complaint properly held; the objection to it in ...