holder who is also a creditor of the corporation may set off his claim against his liability where he would be permitted to do so under the laws of the domicile of the corporation.18 But it has also been held that several stockholders of a foreign corporation may be joined in a single action by a creditor to enforce their liability where such joinder would be proper under the laws of the forum, although the liability is several and the stockholders can only be sued separately under the laws of the corporation's domicile.19 The application of statutes of limitation to actions in other jurisdictions to enforce the statutory liability of stockholders has been considered in a previous section.20 § 4251. Pleading and proof. In an action in a state court to enforce the statutory liability of a stockholder in a corporation of another state, the statute of the other state must be pleaded and set forth in substance, for the courts of a state do not take judicial notice of the statutes of other states,21 but presume that the foreign law is 18 Fidelity Insurance, Trust & SafeDeposit Co. v. Mechanics' Sav. Bank, 97 Fed. 297, rev'g 91 Fed. 456. See also Sargent v. Stetson, 181 Mass. 371, 63 N. E. 929; Broadway Nat. Bank v. Baker, 176 Mass. 294, 57 N. E. 603; Ball v. Anderson, 196 Pa. St. 86, 79 Am. St. Rep. 693, 46 Atl. 366. As to the right of set-off generally, see § 4246, supra. 19 Blair v. Newbegin, 65 Ohio St. 425, 58 L. R. A. 644, 62 N. E. 1040. 20 See § 4244, supra. 21 Massachusetts. Hancock Nat. Bank v. Ellis, 166 Mass. 414, 55 Am. St. Rep. 414, 44 N. E. 349; Bank of North America v. Rindge, 154 Mass. 203, 13 L. R. A. 56, 26 Am. St. Rep. 240, 27 N. E. 1015. New Hampshire. Rice v. Merrimack Hosiery Co., 56 N. H. 114. New Jersey. Salt Lake City Nat. Bank v. Hendrickson, 40 N. J. L. 52. New York. Southworth v. Morgan, 205 N. Y. 293, 51 L. R. A. (N. S.) 56, 98 N. E. 490, rev 'g judgment 143 App. Div. 648, 128 N. Y. Supp. 196. Oregon. Garetson Lumber Co. v. Hinson, 69 Ore. 605, 140 Pac. 633. Vermont. Murtey v. Allen, 71 Vt. 377, 76 Am. St. Rep. 779, 45 Atl. 752. An averment "pursuant to the statute," without setting forth the substance of the statute is insufficient. Salt Lake City Nat. Bank v. Hendrickson, 40 N. J. L. 52. V. Compare Hancock Nat. Bank Ellis, 166 Mass. 414, 55 Am. St. Rep. 414, 44 N. E. 349; Id., 172 Mass. 39, 42 L. R. A. 396, 70 Am. St. Rep. 232, 51 N. E. 207, wherein an action was sustained, with Bank of North America v. Rindge, 154 Mass. 203, 13 L. R. A. 56, 26 Am. St. Rep. 240, 27 N. E. 1015, and Coffing v. Dodge, 167 Mass. 231, 45 N. E. 928, where the decisions were to the contrary under the same statute, because of faulty pleading. See also Marshall v. Sherman, 148 N. Y. 9, 34 L. R. A. 757, 51 Am. St. Rep. 654, 42 N. E. 419. Compare, also, Bell v. Farwell, 176 Ill. 489, 42 L. R. A. 804, 68 Am. St. Rep. 194, 52 N. E. 346, where the liability imposed by the Kansas statute was enforced, with Tuttle v. National Bank of Republic of St. Louis, 161 Ill. 497, 34 L. R. A. 750, 44 N. E. 984, the same as their own, in the absence of a showing to the contrary.22 And it must affirmatively appear from the statute as pleaded, or from averments as to its construction by the courts of the state by which it was enacted, that the liability imposed thereby and the remedy prescribed thereby, or allowed under the decisions of the state, are such that the liability can be enforced in the state in which the action is brought.23 The rule that the laws of another state must be pleaded if relied on is equally applicable where a stockholder seeks to avoid liability under the laws of another state, and under such circumstances the burden of pleading and proving the foreign law rests upon him.24 Some courts have held that averments as to the statutes of another state,25 and as to the construction placed upon them by its court of last resort,2 26 are to be taken as true on demurrer, while others have held to the contrary.2 27 rev'g 48 Ill. App. 481, where an action to enforce liability under the same statute failed because of fault in pleading. 22 Peck v. Noee, 154 Cal. 351, 97 Pac. 865; Garetson Lumber Co. v. Hinson, 69 Ore. 605, 140 Pac. 633. It will be presumed that the common law of another state is the same as that of the forum. Miller v. Aldrich, 202 Mass. 109, 132 Am. St. Rep. 480, 88 N. E. 441; Southworth v. Morgan, 205 N. Y. 293, 51 L. R. A. (N. S.) 56, 98 N. E. 490, rev 'g judg ment 143 N. Y. App. Div. 648, 128 N. Y. Supp. 196. Where the foreign law is not pleaded, it will be presumed that it is the same as the common law of the Garetson Lumber Co. v. Hin forum. 23 Coffing son, 69 Ore. 605, 140 Pac. 633. Rice V. the laws of the state where he was appointed as will enable him to sue at law in his own name in the state of the forum. King v. Cochran, 76 Vt. 141, 104 Am. St. Rep. 922, 56 Atl. 667; Id., 72 Vt. 107, 47 Atl. 394; Murtey v. Allen, 71 Vt. 377, 76 Am. St. Rep. 779, 45 Atl. 752. 24 Peck v. Noee, 154 Cal. 351, 97 Pac. 865. 25 Bell v. Farwell, 176 Ill. 489, 42 L. R. A. 804, 68 Am. St. Rep. 194, 52 N. E. 346; Smith v. Kastor, 195 Ill. App. 458; Miller v. Aldrich, 202 Mass. 109, 132 Am. St. Rep. 480, 88 N. E. 441; Hancock Nat. Bank v. Ellis, 166 Mass. 414, 55 Am. St. Rep. 414, 44 N. E. 349. 26 Bell v. Farwell, 176 Ill. 489, 42 L. R. A. 804, 68 Am. St. Rep. 194, 52 N. E. 346. 27 Finney v. Guy, 189 U. S. 335, 47 L. Ed. 839, aff'g 106 Wis. 256, 49 L. R. A. 486, 82 N. W. 595; Knickerbocker Trust Co. v. Iselin, 185 N. Y. 54, 113 Am. St. Rep. 863, 77 N. E. 877, rev'g 109 N. Y. App. Div. 688, 96 N. Y. Supp. 588. "This is but a corollary of another proposition which is equally well settled. Proof of foreign law by experts, though ever so clear and though Where the action is brought by a receiver the declaration must show that he has such a legal title under The rule that the statutes creating the liability must be pleaded and set forth in substance does not apply in the federal courts, for the federal courts will take judicial notice of the statutes of all the states.28 But they will not take judicial cognizance of what may have been done in the course of the practice and procedure of the courts of another state under its statutes, and hence allegations as to such matters are admitted by demurrer.29 Foreign statutes must be proved as well as pleaded, since the court will not take judicial notice of them.30 The law of another state is a question of fact, to be proved, the same as any other fact, by the introduction of evidence,31 "and the construction of such law may be proved by the printed reports of adjudged cases. 32 § 4252. Conclusiveness of judgment or assessment. Whether or not a judgment against a corporation in the state of its domicile is conclusive against stockholders in an action to enforce their statutory liability is to be determined by the laws of that state.33 If conclusive there, it is conclusive in an action against a stockholder in another state under the full faith and credit clause 34 of the Federal uncontradicted, is not conclusive, since the court must examine and determine the law for itself, and a demurrer has no greater effect than uncontradicted proof." Knickerbocker Trust Co. v. Iselin, 185 N. Y. 54, 113 Am. St. Rep. 863, 77 N. E. 877, rev'g judgment 109 N. Y. App. Div. 688, 96 N. Y. Supp. 588. 28 Fourth Nat. Bank of New York v. Francklyn, 120 U. S. 747, 30 L. Ed. 825; Hanley v. Donoghue, 116 U. S. 1, 29 L. Ed. 535; Irvine v. Elliott, 203 Fed. 82; Wigton v. Bosler, 102 Fed. 70; Newberry v. Robinson, 36 Fed. 841. 29 Irvine v. Elliott, 203 Fed. 82. 30 Lanigan v. North, 69 Ark. 62, 63 S. W. 62; Southworth v. Morgan, 205 N. Y. 293, 51 L. R. A. (N. S.) 56, 98 N. E. 490, rev'g judgment 143 N. Y. App. Div. 648, 128 N. Y. Supp. 196. 31 Hayward v. Sencenbaugh, 141 Ill. App. 395, appeal dismissed 235 Ill. 580, 85 N. E. 939. 32 Hayward v. Sencenbaugh, 141 Ill. App. 395, appeal dismissed 235 Ill. 580, 85 N. E. 939. 33 Hancock Nat. Bank v. Farnum, 176 U. S. 640, 44 L. Ed. 619, rev'g 20 R. I. 466, 40 Atl. 341; Ball v. Warrington, 108 Fed. 472; Warrington v. Ball, 90 Fed. 464; Childs v. Cleaves, 95 Me. 498, 50 Atl. 714; Williams v. Watters, 97 Md. 113, 54 Atl. 767; Tompkins v. Blakey, 70 N. H. 584, 49 Atl. 111. 34 Hancock Nat. Bank v. Farnum, 176 U. S. 640, 44 L. Ed. 619, rev'g 20 R. I. 466, 40 Atl. 341; Converse V. Stewart, 197 Fed. 152, aff'g judgment 192 Fed. 941; Martin v. Wilson, 120 Fed. 202; Ball v. Warrington, 108 Fed. 472; Warrington v. Ball, 90 Fed. 464; Brown v. Trail, 89 Fed. 641; Dexter v. Edmands, 89 Fed. 467; Childs V. Cleaves, 95 Me. 498, 50 Atl. 714; Francis v. Hazlett, 192 Mass. 137, 116 Am. St. Rep. 230, 78 N. E. 405; Tompkins v. Blakey, 70 N. H. 584, 49 Atl. 111. See also Converse v. Hamilton, Constitution, and the only defenses he can make against it are those 224 U. S. 243, 56 L. Ed. 749, Ann. Cas. 1913 D 1292, rev'g judgment 130 Wis. 118 N. W. 190. 589, In 176 Hancock Nat. Bank v. Farnum, U. S. 640, 44 L. Ed. 619, rev'g judgment 20 R. I. 466, 40 Atl. 341, in determining the conclusiveness of a judgment against the corporation rendered in Kansas in an action to enforce a stockholder's liability in Rhode Island, the court said: "Now, as the judgment rendered in the Kansas court is in that state not only conclusive against the corporation but also binding upon the stockholder, it must, in order to have the same force and effect in other states of the Union, be adjudged in their courts to be binding upon him, and the only defenses he can make against it are which he could make in the which those courts of Kansas. The question to be determined in this case was not what credit and effect are given in an action against a stockholder in the courts of Rhode Island to a judgment in those courts which credit against the corporation of he is a stockholder, but what and effect are given in the courts of Kansas in a like action to receiver or not. They may require strict common-law proof as to all the facts upon which the deficiency is based, and may contest any unreasonable expenditure in the conversion of assets and the collection of accounts, including extravagant allowances to attorneys or counsel." similar judgments there rendered. Thus and thus only can the full faith and credit prescribed by the Constitution of the United States and the act of Congress be secured." Quoted in Cleaves, 95 Me. 498, 50 Atl. Childs v. 714. In Converse v. Stewart, 105 N. Y. App. Div. 478, 94 N. Y. Supp. 310, which was a suit by the receiver of a Minnesota corporation, the court followed Howarth v. Angle, and held that the defendant was entitled to strict common-law proof as to all the facts on which the deficiency was based, and reversed the judgment below. On a second appeal the judgment was affirmed on the authority of the former opinion (117 N. Y. App. Div. 922, 102 N. Y. Supp. 1133). Pending an appeal to the Court of Appeals, the opinion in Bernheimer v. Converse was handed down. The Court of Appeals then affirmed the judgment for the defendant on the ground that the proof failed to establish that the defendant was a stockholder at the time of the dissolution of the corporation and the decree of the Minnesota court (192 N. Y. 578, 85 N. E. 1107). A writ of error to the Supreme Court of the United States was dismissed for want of jurisdiction (218 U. S. 666, 54 L. Ed. 1202 [mem. dec.]). See in this connection Converse v. Stewart, 197 Fed. 152, aff'g 192 Fed 941. it was held that stockholders Washington bank when sued by a receiver in New York could controvert "all In Shipman v. Treadwell, 208 N. Y. 404, 102 N. E. 634, aff 'g 150 N. Y. App. Div. 57, 133 N. Y. Supp. 970, rehearing denied 209 N. Y. 545, 102 N. E. 1113, it was held that a judgment of the Ohio court was conclusive in an action by an Ohio receiver against stockholders residing in New York "so far as it determined the amount of assets and liabilities of the insolvent cor the essential facts, such as in solvency, the amount of the deficiency and the like, whether they are established by the judgment appointing the which he could have made in the state where it was rendered.35 This is equally true of a judgment rendered by a federal court sitting in the state of the corporation's domicile, since its judgments and decrees are to be accorded such effect, and only such effect, as would be accorded in similar circumstances to those of a state tribunal of equal authority.36 And the same rule applies in determining the conclusiveness of assessments levied upon nonresident stockholders in the state of the corporation's domicile.37 The stockholder may impeach such a judgment for fraud,38 or want of jurisdiction,39 or interpose defenses personal to himself,40 when he could have done so in the jurisdiction in which the judgment was rendered. And the foreign court may also determine whether the right of action was such as to bind the stockholders.41 It has also been held that the fact that a court of the state of the corporation's poration and the necessity of making an assessment upon the stock to the extent and in the amount ordered," citing among other authorities, Howarth v. Angle. 35 Hancock Nat. Bank v. Farnum, 176 U. S. 640, 44 L. Ed. 619, rev'g 20 R. I. 466, 40 Atl. 341; Martin v. Wilson, 120 Fed. 202; Childs v. Cleaves, 95 Me. 498, 50 Atl. 714; Tompkins v. Blakey, 70 N. H. 584, 49 Atl. 111. 36 Hancock Nat. Bank v. Farnum, 176 U. S. 640, 44 L. Ed. 619, rev'g judgment 20 R. I. 466, 40 Atl. 341. 37 See § 4237, supra. 38 Ball v. Warrington, 108 Fed. 472; Warrington v. Ball, 90 Fed. 464. Fraud may be set up as a defense to an action at law in a federal court sitting in another state. Ball v. Warrington, 108 Fed. 472; Warrington v. Ball, 90 Fed. 464. See also § 4236, supra. 39 ́ ́ A judgment is not binding upon one over whom the court had no jurisdiction; but what may constitute jurisdiction, so that a judgment must be recognized and enforced in a sister state, is a federal question. To determine the existence of due process of law is the final province of the federal court." Tompkins v. Blakey, 70 N. H. 584, 49 Atl. 111. In this case where it was sought to enforce an assessment levied by an Iowa court o1! the stockholders of an Iowa corporation against a stockholder residing in New Hampshire, the court refused to sustain a contention that, because by the law of New Hampshire the individual liability of stockholders is not contractual, the Iowa court had no jurisdiction over him, and hence that he might treat its judgment as a nullity, but held that the judgment was nevertheless binding on him to the same extent as it would have been binding in Iowa. See also § 4236, supra. 41 While a judgment of the court of the corporation's domicile for services rendered to the corporation after the appointment of a receiver is prima facie conclusive upon the indebtedness of the corporation by reason of such services, a federal court of equity sitting in another state may determine whether the services were of such a character that the corporation had a right to bind the stockholders in respect to them after the appointment of a receiver. Covell v. Fowler, 144 Fed. 535. See also 4236, supra. |