Abernathy v. Loftus

• Decision Date: 10 April 1915
• Docket Number: 19,369
• Citation: 95 Kan. 87,147 P. 818
• Parties: OMAR ABERNATHY, as Administrator de bonis non, etc. (BARTON HALL, Assignee, Appellee), v. MARY R. LOFTUS, as Administratrix, etc., et al. (CLARENCE R. RYAN, Substituted Administrator de bonis non, Appellant)
• Court: Kansas Supreme Court

147 P. 818

95 Kan. 87

OMAR ABERNATHY, as Administrator de bonis non, etc. (BARTON HALL, Assignee, Appellee), v. MARY R. LOFTUS, as Administratrix, etc., et al. (CLARENCE R. RYAN, Substituted Administrator de bonis non, Appellant)

No. 19,369

Supreme Court of Kansas

April 10, 1915

Decided. January, 1915.

Appeal from Atchison district court; WILLIAM A. JACKSON, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. CORPORATION -- Dissolution -- Action against Stockholder -- Barred by Three-year Statute of Limitations. An action, under section 1192 of the General Statutes of 1889, against the stockholders of a corporation that has suspended business for more than one year, is barred by the three-year statute of limitations when four years have elapsed after such suspension of business.

2. SAME--Wrongfully Mining Coal--Creates a "Debt Unpaid" under Section 1204, General Statutes of 1889. The obligation arising on the implied contract of a corporation to pay for coal wrongfully mined from the property of another, and not paid for, is a "debt unpaid" within the meaning of section 1204 of the General Statutes of 1889, providing that if any corporation be dissolved, leaving debts unpaid, suits may be brought against any person or persons who were stockholders at the time of such dissolution.

William W. Hooper, of Leavenworth, and Thomas J. White, of Kansas City, for the appellant.

Frank Doster, of Topeka, A. E. Dempsey, of Leavenworth, and Meredith & Harwood, of Kansas City, Mo., for the appellee.

OPINION

MARSHALL, J.:

This is an action commenced June 28, 1910, against the estate of Matthew Ryan, sr., deceased, stockholder of a corporation, to enforce the statutory liability on a judgment rendered against the corporation. Judgment was rendered in favor of the plaintiff. Defendant Ryan appeals.

The trial court made findings of fact as follow:

"First. Matthew Ryan, Sr., of Leavenworth County, Kansas, died on or about June 20th, 1893, possessed of real and personal property of the value of $ 172,443.05, as shown by the inventory and appraisement of his estate taken soon after his death, a part of which estate consisted of 1953 shares of stock of the Leavenworth Coal Company, a corporation, organized and existing under the laws of Kansas, of the par value of $ 97,650.00.

"Second. The said Matthew Ryan, Sr., left a will devising and bequeathing his property, which said will was duly probated in Leavenworth County, Kansas, and is in the following words and figures. . . .

"Third. Of the heirs of Matthew Ryan, Sr., taking under the above will, Mary Ryan, his widow, is dead, Matthew Ryan, Jr., a son, is dead, leaving as heirs the defendants, Ann F. Peek, Clarence P. Ryan, Grace M. Burr, and Mary L. Dreschel, Kate W. Sheedy is dead, leaving as heirs the defendants, Mary J. Sheedy, and Florence E. Sheedy. All other named defendants are the children or grand children of Matthew Ryan, Sr., beneficiaries under his will.

"Fourth. Successive appointments of administration under the will of Matthew Ryan, Sr., were made, the last of which was that of defendant, Mary Loftus, appointed December 5th, 1904.

"Fifth. Mary Loftus, as administratrix on the day of , reported to the Probate Court of Leavenworth County, Kansas, that no personal property came to her hands as administratrix. Said administratrix has not been finally discharged nor said administration finally closed.

"Sixth. Of the estate of Matthew Ryan, Sr., there was at the time of his death the following described real estate situate and lying and being in the county of Leavenworth and State of Kansas, to-wit: . . .

"Seventh. By inventory and report of the administration of the estate filed February 20th, 1900, the aforementioned 1953 shares of stock of the Leavenworth Coal Company was listed as among the remaining assets of the estate.

"Eighth. By resolution of the stockholders of the Leavenworth Coal Company of March 20th, 1900, said company agreed to sell all its property to one George W. Kierstead, and on April 9th, 1900, said conveyance and transfer of all said property was made, of which fact John C. Douglass, hereinafter mentioned, had information, and from thence on said company ceased to do any corporate business except on April 23rd, 1900, the officers of said company by formal resolution of a special meeting resolved to try to purchase a property called the Brighton mine and authorized the president of said company to negotiate for the purchase of said mine and report for what it could be bought. The purchase was not made, but there is no evidence as to the length of time consumed in the attempted negotiation.

"Ninth. As a part of the sale of the property of the Leavenworth Coal Co. to George W. Kierstead, the certificates of stock including those issued to Matthew Ryan, Sr., were surrendered to said Kierstead, and on the stock certificates book from which the certificates had been detached one Tiffin Sinks, then Secretary of the Coal Company wrote, 'March 31st, 1900 transferred to Geo. W. Kierstead, Tiffin Sinks, Secretary.'

"Tenth. The Coal Company kept no stock transfer book, and made no record of the transfer of the Matthew Ryan stock other than as above. No new stock certificates were issued to said Kierstead evidencing the transfer to him. No order for the sale of the Matthew Ryan stock, nor for its distribution among the devisees of Matthew Ryan was ever made by the Probate Court. No statement by the president and secretary, or any other officer of the coal company, reporting any transfer or change of ownership of any of the stock of said coal company to said Kierstead appeared herein from the evidence, nor of making and filing with the Secretary of the State of Kansas a record of such transfer.

"Eleventh. February 4th, 1899, and March 31st, 1900, John C. Douglass brought actions against the Leavenworth Coal Company in the District Court of Leavenworth County, Kansas, in each of which he charged said Coal Company with having for several years prior thereto secretly dug up and carried away coal from under his lands, the allegations of the petitions in which actions were as alleged in the petition in this case. Said two actions were subsequently consolidated as one case, and on June 30th, 1906, judgment was rendered in favor of said Douglass in manner and form as shown by the Journal Entry, attached to the petition herein for $ 67,387.50, damages and costs $ 61.50, which judgment still remains in force and effect. Execution on said judgment was issued and returned no property found as alleged in the petition herein.

"Twelfth. John C. Douglass died February, 1908. This action has been duly revived and Omar Abernathy, the plaintiff herein has been duly appointed and qualified as administrator of said Douglass estate.

"Thirteenth. Of the defendants herein, Mary and Florence Sheedy, the children and heirs of Kate V. Sheedy, have been at all times during the pending of this action and the preceding actions of John C. Douglass vs. The Leavenworth Coal Company, non-residents of and absent from the State of Kansas.

"Fourteenth. Of the defendants herein, Mary Loftus, and her children and heirs, Ryan, Margaret and Kathleen Loftus, have been at all times during the pending of this action and the preceding actions of John C. Douglass vs. Leavenworth Coal Company, non-residents and absent from the State of Kansas, except from October, 1904, to April, 1906, during which interval they were present in Leavenworth, Kansas.

"Fifteenth. Of the defendants herein, Ethan Ryan, son of Matthew Ryan, Sr., has been continuously a nonresident of and absent from the State of Kansas at all times since about the first of March, 1904, and during a portion of the time between March 1st, 1901, and March 1st, 1904, had been absent from the State of Kansas and in the State of Arizona.

"Sixteenth. Of the defendants herein, Jeptha Ryan, son of Matthew Ryan, Sr., and his, Jeptha's sons and heirs, Lee and Samuel defendants herein, have been continuously non-residents of and absent from the State of Kansas from about April 1st, 1904, and during a portion of the time from March 1st, 1901, to April 1st, 1904, said Jeptha Ryan was absent from the state and in the State of Arizona.

"Seventeenth. Of the children and devisees of Matthew Ryan, Sr., Matthew Ryan, Jr., is dead, leaving as his heirs, devisees under said will, Ann F. Peek, Grace M. Burr, Mary L. Dreschel and Clarence R. Ryan. All said living persons and also Thomas Ryan, son and devisee of Matthew Ryan and his children, Catherine S. and Thomas C. Ryan, all defendants herein and likewise devisees of Matthew Ryan, Sr., have been at all times residents of and present in the State of Kansas."

The defendant contends that the action against the estate of Matthew Ryan, sr., is barred by the three-year statute of limitations, because the Leavenworth Coal Company suspended business on March 28, 1900, leaving debts unpaid, and never resumed business thereafter; and this action was not commenced within the three years after the expiration of the first year of such suspension of business. The plaintiff, to avoid this bar, claims that "debts unpaid" (Gen Stat. 1889, § 1204) do not include claims for unliquidated damages arising out of tort. (See Laws 1898, ch. 10, § 17.) Assuming that the expression "debts unpaid" includes the claim of these plaintiffs, was this action barred by the statute of limitations at the time it was commenced? The actions which entered into the judgment upon which this action is based were commenced January 4, 1889, and March 30, 1900, respectively. The Leavenworth Coal Company ceased to do business in March or April, 1900. Section 1200 of the General Statutes of 1889 (Gen. Stat. 1909, § 1759) provides...