Opinion of the Court. Mr. William Allen Butler for defendant in error cited: Pollard v. Bailey, 20 Wall. 520; Lowry v. Inman, 46 N. Y. 119, 120; Railway Co. v. Whitton, 13 Wall. 270; Cowles v. Mercer County, 7 Wall. 118; Moies v. Sprague, 9 R. I. 541 ; Fairfield v. Gallatin County, 100 U. S. 47, and cases cited; Post v. Supervisors, 105 U. S. 667; Norton v. Shelby County, 118 U. S. 425; Jessup v. Carnegie, 80 N. Y. 441; Merrick v. Santvoord, 34 N. Y. 208; Patterson v. Baker, 34 How. Pr. 180; Penniman's Case, 11 R. I. 333; S. C. 103 U. S. 714; Pennington v. Gibson, 16 How. 65; Hardmann v. Bowen, 39 N. Y. 196, 199; Fortier v. New Orleans Bank, 112 U. S. 439; Marine Bank v. Fulton Bank, 2 Wall. 252. MR. JUSTICE GRAY, after stating the case as above reported, delivered the opinion of the court. "This was an action at law, brought in the Circuit Court of the United States for the Southern District of New York, by a creditor of a Rhode Island manufacturing corporation, against the executor of a stockholder in that corporation, to enforce the liability which the statutes of Rhode Island impose upon stockholders in such corporations for the corporate debts. In the court below, statutes and decisions of Rhode Island were agreed or proved and found as facts, in seeming forgetfulness of the settled rule that the Circuit Court of the United States, as well as this court on appeal or error from that court, takes judicial notice of the laws of every state of the Union. Hanley v. Donoghue, 116 U. S. 1, 6, and cases there collected. No reference was made to the statute of 1877, c. 600, to which the plaintiff has now referred, and which repeals and modifies in some respects the statutes agreed and found in the record to be still in force; and it is contended for the defendant that this court should not review a judgment on a ground which was not presented to the court below. That is doubtless the general rule. Klein v. Russell, 19 Wall. 433; Badger v. Ranlett, 106 U. S. 255. But it would be unreasonable to apply it when the effect would be to make the rights of the parties depend upon a statute which, as we know, and are judicially Opinion of the Court. bound to know, is not the statute that governs the case. And under either statute the result is the same, as will appear by a sketch of the history of the legislation and of its judicial construction, and a consideration of the principles upon which that construction rests. The statutes of Rhode Island, upon which the case was argued and decided in the Circuit Court, were sections 1 and 14 of the manufacturing corporation act of 1847, reënacted in the Revised Statutes of 1851, c. 128, §§ 1, 19, 20, and in the General Statutes of 1872, c. 142, § 1, 20, 21. By the first section of each of those statutes, the members of every manufacturing company afterwards incorporated "shall be jointly and severally liable for all debts and contracts made and entered into by such company," until the whole amount of the stock shall have been paid in, and a certificate thereof made and recorded in a certain public office; and by the other sections, when the stockholders shall be so liable to pay the debts of the company, or any part thereof, "their persons and property may be taken therefor, on any writ of attachment or execution issued against the company for such debt, in the same manner as on writs and executions against them for their individual debts;" or, the creditor may, instead of such proceedings, have his remedy against the stockholders by bill in equity. These provisions were substantially copied from the Revised Statutes of Massachusetts of 1836, c. 38, §§ 16, 30, 31, as clearly appears on a comparison of the statute books of the two states, and as has been expressly recognized by the Supreme Court of Rhode Island. Moies v. Sprague, 9 R. I. 541, 544. The provisions of the Revised Statutes of Massachusetts, as well as the similar provisions of the earlier statutes therein embodied and reenacted, were always construed by the Supreme Judicial Court of Massachusetts to allow the stockholders to be charged for the debts of the corporation by no other form of proceeding than that given by the statutes themselves. This was clearly laid down, before the enactment of the statute in Rhode Island, in judgments delivered by Chief Justice Shaw, as follows: "The individual liability of stock Opinion of the Court. holders, created by the statute of 1808, was of a particular and limited character, and could only be enforced in the manner pointed out by the statute." Ripley v. Sampson (1830), 10 Pick. 370, 372. "The construction uniformly put upon St. 1808, c. 65, § 6, has been, that it was a new remedy, given by statute, and as the mode of pursuing it was specially pointed out, that mode must be pursued; that it did not create a legal liability, to be enforced by an action." Kelton v. Phillips (1841), 3 Met. 61, 62. "This liability of an individual to satisfy an execution on a judgment to which he was not a party, and to which he had no opportunity to answer, is created and regulated by statute, and is not to be extended, by construction, beyond the plain enactments of the statute, as found by express provision or necessary implication." Stone v. Wiggin (1842), 5 Met. 316, 317. See also Gray v. Coffin (1852), 9 Cush. 192, 199. That court accordingly held in Ripley v. Sampson, above cited, as well as in the earlier case of Child v. Coffin (1820), 17 Mass. 64, and in the later case of Dane v. Dane Manufacturing Co. (1860), 14 Gray, 488, that an execution against a corporation could not be levied on the estate of a stockholder who died before the commencement of the action; in Kelton v. Phillips, above cited, as well as in Bangs v. Lincoln (1858), 10 Gray, 600, that the statute liability of a stockholder was not a debt provable against his estate in insolvency; in Stone v. Wiggin, above cited, that the estate of a stockholder, though attached on mesne process in an action against the corporation, could not be taken in execution on the judgment in that action, without first making a demand upon the officers of the corporation for payment or satisfaction of the execution; and in Knowlton v. Ackley (1851), 8 Cush. 93, in accordance with the opinion of Chief Justice Shaw in Kelton v. Phillips, above cited, that a creditor of a corporation could not maintain an action at law against a stockholder. In 1869, before the debt was contracted on which this action was brought, the Supreme Court of Rhode Island, in accordance with Knowlton v. Ackley and the other Massachusetts cases, above referred to, applied to the statute of Rhode Island VOL. CXX-48 Opinion of the Court. the rule that "when a statute creates a right or liability and prescribes a remedy, the remedy prescribed is the only remedy;" and, while leaving open the question whether the stat.ute liability of a deceased stockholder survived in any manner at law against his estate, adjudged that at all events his estate could not be charged, either at law or in equity, except in the mode of proceeding prescribed by the statute, and therefore such a liability could not be proved before commissioners on the insolvent estate of a deceased stockholder. Moies v. Sprague, 9 R. I. 541. So in the Circuit Court of the United States for the District of Rhode Island, Judge Shepley and Judge Lowell held that the liability of a stockholder under that statute, unless liquidated and ascertained by a decree in equity, was not a debt that could be proved against his estate under the Bankrupt Act of the United States; and Judge Lowell's decision was affirmed by this court, without any contest upon that point. James v. Atlantic De Laine Co., 11 Bankr. Reg. 390; Garrett v. Sayles, 1 Fed. Rep. 371, 377, and 110 U. S. 288. The statute of Rhode Island of March 27, 1877, c. 600, is as follows: "An act defining and limiting the mode of enforcing the liability of stockholders for the debts of corporations. "SEC. 1. No person shall hereafter be imprisoned, or be continued in prison, nor shall the property of any such person be attached, upon an execution issued upon a judgment obtained against a corporation of which such person is or was a stockholder. "SEC. 2. All proceedings to enforce the liability of a stockholder for the debts of a corporation shall be either by suit in equity, conducted according to the practice and course of equity, or by an action of debt upon the judgment obtained against such corporation; and in any such suit or action such stockholder may contest the validity of the claim upon which the judgment against such corporation was obtained, upon any ground upon which such corporation could have contested the same in the action in which such judgment was recovered. "SEC. 3. All acts and parts of acts inconsistent herewith are hereby repealed. Opinion of the Court. "SEC. 4. This act shall take effect from and after the date of the passage thereof." This statute permits the alternative remedy by suit in equity -whether before or only after recovering judgment against the corporation we need not now inquire--and modifies the previous statutes in no other respect than by abolishing the right to take the person of a stockholder for the debt of the corporation; by substituting, for the taking of his property on attachment and execution against the corporation, a new form of remedy, by action of debt against him upon a judgment obtained against the corporation; and by authorizing him, when so sued, either in equity or at law, to make any defence that the corporation might have made. As it does not undertake to annul the liability of the stockholders for the debts of the corporation, but only modifies the form of remedy and the rules of evidence, it is not doubted that it is a constitutional exercise of the power of the legislature, even as applied to debts contracted by the corporation before its enactment. Hawthorne v. Calef, 2 Wall. 10; Penniman's Case, 103 U. S. 714, affirming 11 R. I. 333; Ogden v. Saunders, 12 Wheat. 213, 262, 349; Webb v. Den, 17 How. 576; Curtis v. Whitney, 13 Wall. 68; Tennessee v. Sneed, 96 U. S. 69. Under either statute of Rhode Island, the debt must be established by a judgment recovered against the corporation, before the creditor can proceed against the stockholder. The execution under the earlier laws, and the action against the stockholder under the existing statute, must be founded on that judgment. In short, it is only a judgment creditor of the corporation, who can collect a corporate debt from its stockholders, at least at law. What state of facts would be necessary to support a bill in equity by a creditor of the corporation against one or all of its stockholders is a question not before See Cambridge Water Works v. Somerville Dyeing & Bleaching Co., 4 Allen, 239; New England Bank v. Stockholders of Newport Factory, 6 R. I. 154;1 Smith v. Railroad Co., 99 U. S. 398; Case v. Beauregard, 101 U. S. 688. us. The question of the manner in which the liability of stock 1 S. C. 75 Am. Dec. 688. |