Booth v. Dear

Decision Date11 June 1897
Citation96 Wis. 516,71 N.W. 816
PartiesBOOTH v. DEAR ET AL.
CourtWisconsin Supreme Court

OPINION TEXT STARTS HERE

Appeal from superior court, Douglas county; Charles Smith, Judge.

Action by N. P. Booth against R. B. Dear and others. From an order overruling a demurrer to the complaint, defendants appeal. Affirmed.

This action was brought to enforce the statute liability of stockholders of the defendant bank. The plaintiff, complaining on behalf of himself and of creditors of the bank who might wish to become parties to the action, alleged that the defendant corporation, during all the times mentioned in the complaint, had been a duly organized banking corporation, under the laws of the state of Wisconsin; that its capital stock was $50,000; that on the 27th day of May, 1895, it made an assignment for the benefit of its creditors, which assignment was completed in all respects, as required by the laws of this state; that, at the time of the making of such assignment, the bank was indebted to the amount of $135,000, and that its assets did not exceed $20,000; that the bank had wholly ceased doing business; and that it did not possess any property whatever, subject to execution or to sequestration in equity. There were further allegations showing who were stockholders during the six months prior to the making of the complaint, and during the time the indebtedness of plaintiff mentioned existed, together with the amount of stock owned by each of such stockholders. There were further allegations to the effect that the amount of plaintiff's debt at the time of the making of the assignment and the commencement of the action was $713.86; that he duly filed proof of his claim therefor in the assignment proceedings, but had not received any dividend thereon. The complaint contained further allegations to the effect that on the 11th day of December, 1894, the defendant bank was indebted to one William Brown in the sum of $10.10, and that such proceedings were duly had to collect such indebtedness that a judgment was rendered therefor in a court of competent jurisdiction; that such judgment was thereafter duly transcribed to the circuit court for Douglas county, Wis., and execution duly issued thereon out of such court, and placed in the hands of the sheriff of Douglas county for collection; and that the same was on the 16th day of August, 1895, returned by such sheriff wholly unsatisfied; and that on the 19th day of August, 1895, and before the commencement of this action, such judgment was, for value, assigned to the plaintiff; and that he was the owner thereof at the time of the commencement of this action; and that there was due to him thereon $16.85. The defendants demurred to the complaint upon two grounds, one being that such complaint fails to state facts sufficient to constitute a cause of action against them. The demurrer was overruled, and such defendants appealed.Reed & Reed and Hughes & Whitford, for appellants.

Yate H. V. Gard, for respondent.

MARSHALL, J. (after stating the facts).

It is contended on the part of appellants that proceedings to enforce the statutory liability of the stockholders of a banking corporation to its creditors cannot be resorted to till the franchise of the corporation is forfeited and its assets are exhausted; that the complaint in this action does not show such facts in respect to the defendant bank, but, on the contrary, shows a considerable amount of property in the hands of its assignee in trust for creditors; hence that the requisite facts do not appear to make out a good cause of action against the stockholders. The general principles governing the statutory liability of stockholders of a banking corporation (in Gianella v. Bigelow, 71 N. W. 111, not officially reported) have been so recently laid down by this court, citing previous adjudications on the subject, that further discussion thereof at this time is unnecessary. The statute creating the liability of the stockholders of a state banking corporation (section 47, c. 479, Laws 1852) provides as follows: “The stockholders in every corporation or association organized under the provisions of this act, shall be individually responsible to the amount of their respective share or shares of stock, for all its indebtedness and liabilities of every kind.” Such statute received construction at an early day, to the effect that “the liability is primary and absolute, and attaches the moment the debt is contracted by the bank; that it is a liability of all the stockholders to all the creditors, on the principle of a co-partnership, the stockholders standing on substantially the same footing as though they were partners, * * * save only that the responsibility of each is limited to a sum equal to his share or shares of stock. Subject to this limitation, they are answerable as original and principal debtors, and their liability more nearly resembles that of co-partners than any other with which it can be compared.” The language quoted is that of Dixon, C. J., in Coleman v. White, 14 Wis. 700, and what is there decided has since been firmly adhered to. Cleveland v. Bank, 17 Wis. 545;Bank v. Chandler, 19 Wis. 434;Terry v. Chandler, 23 Wis. 456; Gianella v. Bigelow, supra. By the same adjudications and others, it is settled that the statutory liability of the stockholders of such a corporation must be enforced by suit in equity, in which all the creditors join as p...

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18 cases
  • Pate v. Bank of Newton
    • United States
    • Mississippi Supreme Court
    • 4 Febrero 1918
    ...260; Jackson v. Meek, 87 Tenn. 96., 9 S.W. 225; 10 Am. St. Rep. 620; McLaughlin et al. v. O'Neil, 51 P. 243, 7 Wyo. 187; Booth v. Dear, 71 N.W. 816, 96 Wis. 516; Coleman v. White, 14 Wis. 700; Cleveland Marine Bank, 17 Wis. 545; Merchants Bank v. Chandler, 19 Wis. 434; Terry v. Chandler, 23......
  • Boyd v. Mut. Fire Ass'n of Eau Claire
    • United States
    • Wisconsin Supreme Court
    • 19 Mayo 1902
    ...to enforce any liability against its members thereupon accrued. Such, in effect, is a recent ruling of this court. Booth v. Dear, 96 Wis. 516, 519-521, 71 N. W. 816. Thus, in an opinion by Mr. Justice Brewer, in the federal court, it was held that: “Where an insolvent corporation ceases to ......
  • Finney v. Guy
    • United States
    • Wisconsin Supreme Court
    • 20 Marzo 1900
    ...the par value of the stock held by each stockholder. To the same effect are Gianella v. Bigelow, 96 Wis. 186, 71 N. W. 111;Booth v. Dear, 96 Wis. 516, 71 N. W. 816;Gager v. Marsden, 101 Wis. 598, 77 N. W. 922;Foster v. Posson (Wis.) 81 N. W. 124,--in which cases adjudications of the Minneso......
  • Killen v. State Bank of Manitowoc
    • United States
    • Wisconsin Supreme Court
    • 27 Abril 1900
    ...in a proceeding adapted to that end. Coleman v. White, 14 Wis. 700;Gianella v. Bigelow, 96 Wis. 185, 71 N. W. 111;Booth v. Dear, 96 Wis. 516, 71 N. W. 816. Barnes paid into the trust fund all that could have been collected for the benefit of the creditors on account of his stock liability. ......
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