Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/397

 PART V.] CORPORATE ACTS WITHOUT THE STATE. [§ 393. giving a corporation a lien on its shares for debts due to it from shareholders. 1 § 393. It is stated, as a general rule, that penal provisions will not be enforced outside of the jurisdiction of the Penal pro _ state enacting them. 2 The Federal Supreme Court, jjjjjf^. however, has recently held that a statute making forced out- directors personally liable to creditors of the corpo- state enact- ration for makiug and signing false reports ma}^ be statutory enforced without a state. " As the statute imposes hablllt y- a burdensome liability on the officers for their wrongful act, it may well be considered penal, in the sense that it should be strictly construed. But as it gives a civil remedy at the suit of the creditor only, and measured by the amount of his debt, it is as to him clearly remedial. To maintain such a suit is not to administer a punishment imposed upon an offender against the state, but simply to enforce a private right secured under its laws to an individual. We can see no just ground, on principle, for holding such a statute to be a penal law in the sense that it cannot be enforced in a foreign state or country." 3 The liability of shareholders in a foreign corporation, arising under the statutes of the state in which the corporation is in- corporated, is of a contractual nature, and will be enforced in any court of competent jurisdiction. In the leading case of 1 Bishop v. Globe Co., 135 Mass. 132. A court will entertain a suit by a resident against a foreign corpora- tion to compel it to issue a new cer- tificate of stock to him, Guilford v. Western U. Tel. Co., 59 Minn. 332. 2 See Story, Conflict of Laws, §§ 620, 621; Wharton's Conflict of Laws, §833. A statute of Indiana giving a right to recover a penalty for the failure of a telegraph company to transmit a message, has no extra-territorial force, and therefore is not applica- ble to messages delivered to the company in anotber state to be sent to tins state (Indiana). Carnahan v. Western Un. Tel. Co., 89 Ind. 526. But if the message is delivered to the telegraph company within the state, to be sent to a point without, the fact tbat the act of negligence preventing the message from reach- ing its destination occurred outside of the state will not defeat a recov- ery. Western Un. Tel. Co. v. Ham- ilton, 50 Ind. 181. The determining circumstance, according to these two cases, is whether the contract with the telegraph company was entered into within the state. 3 Huntington u. Attrill, 146 U. S. 657, 677. Opinion of the court per Gray, J. Accord, with respect to personal statutory liability of direct- ors for creating debts in excess of the capital stock. Farr v. Briggs's Estate, 72 Vt. 225. See §§ 764, 765. 377