Abbey v. W.B. Grimes Dry Goods Co.

• Court: United States State Supreme Court of Kansas
• Citation: 24 P. 426,44 Kan. 415
• Parties: DELIA ABBEY et al. v. THE W. B. GRIMES DRY GOODS COMPANY
• Decision Date: 03 July 1890

24 P. 426

44 Kan. 415

DELIA ABBEY et al. v. THE W. B. GRIMES DRY GOODS COMPANY

Supreme Court of Kansas

July 3, 1890

Error from Republic District Court.

THE opinion contains a sufficient statement of the facts. Judgment for the plaintiff Company, at the May term, 1888.

The defendants, Delia Abbey and many others, bring the case to this court.

Judgment reversed.

W. T Dillon, for plaintiffs in error.

Caldwell Ellis & Cook and E. C. Ellis, for defendant in error.

GREEN C. All the Justices concurring.

OPINION

GREEN, C.:

This action was commenced against the stockholders of the Republic County Cooperative Association, to fix the liability of said stockholders, under § 44 of the general incorporation act, (Gen. Stat. of 1889, P 1204.) The corporation was organized in 1882, to engage in buying and selling general merchandise in Belleville, Republic county, and continued in business until the 19th of April, 1886, when the association made a general assignment of all its property, for the benefit of its creditors; and in pursuance of the assignment, the entire property of every kind owned by it was devoted to the payment of the creditors of the association, pro rata; certain sums being still unpaid, plaintiff below commenced this action on the 10th of February, 1888, to recover the sum of $ 165.94, with interest at the rate of seven per cent. from the 6th of June, 1887, making thirty-two stockholders of the corporation defendants, seeking to make them liable for an amount equal to the stock held by each in said association. The cooperative association was not sued, and no judgment had been previously obtained against it.

I. The first alleged error is, the overruling of the motion made by the defendants below to set aside the summons, for the reason that there was no proper indorsement thereon. The indorsement reads as follows: "Suit brought for the recovery of money. Amount claimed, $ 164.94, with interest from the 6th day of June, 1887, at the rate of 7 per cent. per annum till paid, and the liability of the several within defendants, for the payment of said sum of $ 164.94 and interest, be fixed as follows: Delia Abbey, $ 20; D. C. Bowersox, $ 5; Gertrude Bowersox, $ 20," etc., naming each one of the defendants for the amount of stock which, it was claimed, each had at the dissolution of said corporation.

It is claimed, upon the part of the plaintiffs in error, that this is not a compliance with the statute; that the clerk should make this indorsement and sign it, and, being an official act, he should attest it with the seal of the court. We do not think this position tenable. We think the decisions of this court, in the cases of George v. Hatton, 2 Kan. 333, and Weaver v. Gardner, 14 id. 347, settle this objection, and that there was no error in the court's overruling the motion to set aside the summons.

Upon the overruling of the motion of the defendants to set aside the summons, the defendants interposed a demurrer to the plaintiff's petition on the ground, first, that the petition did not state facts sufficient to constitute a cause of action; and second, that several causes of action were improperly joined, which demurrer was overruled by the court, and excepted to. Judgment was thereupon entered against the defendants for $ 189.68, and costs taxed at $ 56.30; and ordered that execution issue against each one of the defendants respectively, in accordance with the amount of stock owned by each of them, and the costs of the action.

II. The controlling question in this case is the one raised by the second ground of demurrer, and the only one discussed by counsel, which we will proceed to consider. The suit, as stated, was to fix the liability of certain stockholders in a corporation. The language of the statute is:

"If any corporation, created under this or any general statute of this state, except railway or charitable or religious corporations, be dissolved, leaving debts unpaid, suits may be brought against any person or persons who were stockholders at the time of such dissolution, without joining the corporation in such suit; and if judgment be rendered, and execution satisfied, the defendant or defendants may sue all who were stockholders at the time of dissolution, for the recovery of the portion of such debt for which they were liable, and the execution upon the judgment shall direct the collection to be made from property of each stockholder, respectively; and if any number of stockholders (defendants in the case) shall not have property enough to satisfy his or their portion of the execution, then the amount of deficiency shall be divided equally among all the remaining stockholders, and collections made accordingly, deducting from the amount a sum in proportion to the amount of stock owned by the plaintiff at the time the company dissolved." (Gen. Stat. of 1889, P 1204.)

The contention of counsel is that the liability of stockholders in actions of this kind, is several and not joint; that the action is purely legal in its nature, being the action of one creditor of a corporation to enforce the statutory liability of each defend...