Lovegrove v. Brown , 60 Me. 592 ( 1872 )

Dickerson, J.

Case against the defendant as a stockholder in Portland Shovel Manufacturing Company, upon an alleged liability as such for a debt of the corporation.

It is admitted that the defendant was a stockholder in that corporation, as set forth in the writ; and it appears from the evidence that said corporation had exceeded the limitations prescribed in R. S. of 1857, c. 48, § 9, and thereby rendered its'stockholders individually liable for its debts, as provided in c. 46, § 24, of the same statute. Lovegrove v. Hunt, 58 Maine, 22.

The plaintiff recovered judgment against the corporation Oct. 28, 1867, and execution was issued thereon Nov. 5, 1867. On Jan. 1, 1868, the officer haying the execution returned it satisfied in part. An alias execution was issued for the balance, March 5, 1868. On March 28, 1868, the officer having that execution returned it in no part satisfied, and further certified thereon that the attorney for the creditor, in his presence, and while he had the execution in his hands for collection and service, on March 6,1868, made demand upon John B. Brown, a stockholder in Portland Shovel Manufacturing Company, to disclose and show attachable property of said corporation sufficient to satisfy the execution, and that said Brown neglected and refused to disclose and show sufficient attachable property of said corporation. The attorney for the plaintiff testified that he made the demand upon the defendant as set forth in the officer’s return. The plaintiff brought this action April 1, 1868.

The question presented for our decision is whether the plaintiff is in a situation to enforce upon the defendant the provisional liability imposed upon him by the statute. This depends upon the construction to be put upon R. S. of 1857, c. 46, § 25, as amended by c. 76 of the Public Laws of 1859, and § 26 of the same revision. These sections are as follows :

‘ Sec. 25. At any time within six months after the return of an execution against a corporation recovered on a debt for which any stockholder is liable under the preceding section, unsatisfied in whole or in part, for want of attachable property of the corporation, the plaintiff in such execution may demand of any stockholder of such corporation to disclose and show attachable property of such corporation, sufficient to satisfy the execution.

‘ Sec. 26. After demand as aforesaid, the execution creditor may have an action of the case against such stockholder, to recover of him individually the amount of his execution and costs, or the deficiency thereof, not exceeding the amount for which said stockholder is liable by section 24. Such action must be commenced within six months after the date of the rendition of judgment against the corporation.’

The difficulty in giving construction to these sections of the statute arises partly from their apparently inconsistent provisions, and partly from the meaning to be given to the word ‘ return ’ in Sec. 25. That section, in terms, allows six months for making the demand ‘ after the return of the execution,’ but section 26 requires that ‘ the action be commenced within six months after the date of the rendition of judgment.’ As by the general law, an execution cannot issue until twenty-four hours after the rendition of judgment, the execution creditor cannot have the entire six months mentioned in section 25, in which to make the demand. This provision of the general law probably escaped the attention of the framers of these sections.

If the execution creditor- has not six entire months for making the demand, what time has he ? When does the time for making the demand commence to run ? The plaintiff claims that it commences from the time the officer makes his return upon the execution that it is unsatisfied, etc.; the defendant that it commences from the return day of the execution. The plaintiff’s theory allows six months for making the demand, less twenty-four hours, while the defendant limits the time to three months less the same time. Does the statute make the remedy of the execution creditor available immediately upon obtaining his execution against the corporation, and the officer’s return thereon that it is unsatisfied, or does it give the stockholder the benefit of a delay of three months therefrom ? In other words, is section 25 to have the same construction, in this respect, as it would have if the time for making the demand had been fixed at three instead of ‘ six months after the return of the execution ?’ The construction contended for by the learned counsel for the defendant, calls upon us to hold, not only that the legislature meant what it did not say, in terms, but that it meant what is inconsistent with what it did say; for what consistency or reason can there be in saying that a demand may be made at any time within six months after a particular event, and meaning that it must be made within three months thereafterward, in order to make it available ? If the legislature intended to allow only three months for making the demand, it has certainly used words very inapt to express its meaning, when there was no difficulty in saying what was intended in express terms. It is obvious that such an unnatural and forced construction of the statute cannot be sustained unless it is supported by the most conclusive reasons.

The object of the statute is to enable an execution creditor of a corporation to collect his debt, or a part thereof, of its stockholders in a specified contingency. Where this contingency occurs, the statute requires two things to be done in order to perfect the creditor’s remedy against the stockholders.

1. That the officer holding the execution shall make return upon it that ‘ it is unsatisfied in whole or in part for want of attachable property of the corporation.’ The officer has the right to make such return, if the facts warrant it, on any day during the life of the execution, be it the first, or the ninetieth, or any intermediate day. He may or may not return the execution to eourt on the day he makes such return; this is not necessary in order to perfect the creditor’s right to take the next step for enforcing his claim against the stockholder. That right is complete when the officer has made the required return upon the execution, that act alone, and not the return of the execution to court, being the necessary prerequisite for taking the next step in the process.

2. The next thing required to be done by the ‘ plaintiff, in such execution,’ is to make 'demand upon the stockholder to disclose and show attachable property of such corporation sufficient to satisfy the execution.’

This demand must be made during the life of the execution in order that the property of the corporation, if any, disclosed and shown to the creditor may be taken upon it. It is obvious, too, from the phraseology, ‘ plaintiff in such execution,’ and ‘ to, satisfy the execution,’ that the demand may be made upon the same execution on which the officer has made his return that it is unsatisfied. But if no demand can be made until after the return day of the execution, then no demand can be made on the first execution, though the officer has made the necessary return upon it. The statute does not restrict the time for making the demand to six months after the return day of the execution, but to six months after the return of the execution, if so long a time shall remain from the date of the return upon the execution, to the expiration of the six months after the day of the rendition of judgment, otherwise to so long a time as shall thus remain. The misapprehension arises from interjecting the word day after ‘ return,’ and then assuming that ‘ return ’ has reference to time only and not to the certificate of the officer. That the latter construction is the true one is confirmed by the consideration that the section in which this word is used prescribes the requisites of ‘ the return ’ upon the execution as follows: ‘ unsatisfied in whole or in part for want of attachable property of the corporation.’ A certificate that does not conform to this requirement is not a ‘ return.’ The ‘ return of the execution ’ means the return upon the execution; the meaning of section 25 in this respect is the same as though it read, ‘ at any time within six months after the return upon the execution, the plaintiff in such execution may make demand of any stockholder, etc.’

This construction gives effect to the express language of the statute, as nearly as can be done, and substantially reconciles the apparently conflicting provisions of sections 25 and 26. It also facilitates the accomplishment of the purpose of the statute by preventing the useless and prejudicial delay which the contrary construction necessitates.

It is, too, the more reasonable construction, since no beneficial purpose would be subserved by excluding from the time fixed for making the demand the interval between the date of the officer’s return and the return day of the execution, while the execution creditor by such delay might be deprived of the opportunity to collect his debt. In cases of doubt the legislature is always presumed to have intended the most beneficial construction of its acts. Besides, the .view we have taken of the statute under consideration is strengthened-by the history of the previous legislature upon this subject, and the decisions thereon, as appears by the argument and citations of the learned counsel for the plaintiff.

The case finds that the defendant was an original stockholder in the Portland Shovel Manufacturing Company, to the amount of twenty shares, at the par value of one hundred dollars each, and that he continued to own that amount of stock up to the time of the commencement of this action.

Judgment for the plaintiff in the sum of two thousand dollars and interest from the date of the writ.

Appleton, C. J.; Kent, Walton, and Barrows, JJ., concurred.