Broderick v. Rosner
United States Supreme Court
294 U.S. 629, 55 S. Ct. 589, 79 L. Ed. 1100 (1935)
- Written by Mary Phelan D'Isa, JD
Facts
New York law holds the shareholders of a New York bank individually responsible for all bank debts to the extent of the amount of their stock. The Bank of the United States is a New York corporation. The superintendent of New York banks filed an action in a New Jersey state court against 557 shareholders of an insolvent New York bank to recover unpaid assessments levied upon the shareholders by the superintendent under New York law. A New Jersey statute prohibited such legal actions but permitted equitable actions for such liability if the corporation, all its legal representatives, creditors, and stockholders were necessary parties. Because personal jurisdiction over nonresident corporate legal representatives, creditors, and shareholders was impossible and because the cost of service over all necessary parties exceeded the aggregate amount due from the New Jersey shareholders, the New York bank superintendent challenged the New Jersey statute’s constitutionality. The New Jersey courts upheld the New Jersey law, and the New York bank superintendent appealed.
Rule of Law
Issue
Holding and Reasoning (Brandeis, J.)
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