STARK BROS.’ NURSERIES & ORCHARDS CO. v. LITTLE et al.
(Circuit Court of Appeals, Seventh Circuit.
January 7, 1919.)
No. 2607.
1. Corporations <@=>640—Foreign Corporations—Filing of Reports—Statute—Application.
Rev. Codes Mont. § 3850, relating to the filing of reports and affidavits by corporations, was not intended to, and does not, apply to foreign corporations.
2. Corporations @=5640—Filing of Reports—Foreign Corporations—“Debt or Judgment.”
If Rev. Codes Mont. § 3850, making directors of corporations liable for debts if they do not file certain reports, applied to foreign corporations, the “debt or judgment” specified therein must be limited to a debt, incur*422red in Montana or a judgment based thereon: a state being without power to make nonresident directors of a corporation of another state liable upon a debt incurred in still another state to another foreign corporation.
*421@=5>F0I otter cases see same topic & KEY-NUMBBR in all Key-Numbered Digests & Indexes
*4223. Pleading <@=>34(3)—Presumptions in Aid oe—Piling of Reports—Liability op Directors of Corporations.
Assuming that Rev. Codes Mont. § 3850, making directors of a corporation liable for debts of the corporation if they do not file certain reports, applies to foreign corporations, in a proceeding against directors of a foreign corporation for not filing such reports in Montana, it must be specifically alleged that the debt was incurred in Montana, inasmuch as a judgment rendered in Montana on a .debt raises no presumption that the debt was there incurred.
In Error to the District Court of the United States for the Eastern Division of the Northern District of Illinois.
Action by the Stark Bros.’ Nurseries & Orchards Company against Charles B. Little'and W. D. Starnes. There was judgment for defendants, and plaintiff brings error.
Affirmed.
Ben M. Smith, of Chicago, 111'., for plaintiff in error.
U. A. Stebbins, of Chicago, 111., for defendants in error.
Before BAKER, MACK, and AUSCHUUER, Circuit Judges.
MACK, Circuit Judge.
Pursuant to the provisions of section 3850 of the Revised Code of Montana, the material portions of which are copied in the margin, action was brought by plaintiff corporation against the directors of a South Dakota corporation doing business in Montana, to subject them to a Montana judgment recovered by plaintiff against the corporation. To the declaration, which alleged the failure of the corporation to file the required report within the statutory period and of defendants to file the required affidavit, a demurrer was sustained.
[1] 1. Under the decisions of Helena Power-Transmission Co. v. Spratt, 35 Mont. 108, 88 Pac. 773, 8 L. R. A. (N. S.) 567, 10 Ann. Cas. 1055, and Daily v. Marshall, 47 Mont. 377, 133 Pac. 681, and *423notwithstanding Nelson v. Bank, 157 Fed. 161, 84 C. C. A. 609, 13 Ann. Cas. 811, we are satisfied that this statute was not intended to and does not apply to foreign corporations.
[2, 3] 2. At the oral argument, counsel properly conceded that, if the statute applied to foreign corporations, “the debt or judgment” specified in the statute must be limited to a debt incurred in Montana or a judgment based thereon; otherwise, the act would'be clearly unconstitutional, as Montana is without power to make Illinois directors of a South Dakota corporation liable upon a debt incurred in Missouri to a Missouri corporation.' That the judgment was rendered in Montana raises no presumption that the debt was there incurred. Proof of this fact would be essential; the fact itself must therefore be alleged in the declaration. Bartlett v. Crozier, 17 Johns. (N. Y.) 439, 8 Am. Dec. 428.
Judgment affirmed.