Brown v. Brink

• Court: Supreme Court of Nebraska
• Writing for the Court: NORVAL
• Citation: 57 Neb. 606,78 N.W. 280
• Decision Date: 09 February 1899
• Parties: BROWN v. BRINK ET AL.

57 Neb. 606
78 N.W. 280

BROWN
v.
BRINK ET AL.

Supreme Court of Nebraska.

Feb. 9, 1899.

Syllabus by the Court.

1. An action for the enforcement of the individual liability of the stockholders of a banking corporation must be prosecuted by one creditor for the benefit of all, or by the receiver of the corporation.

2. A creditor may not intervene in such an action instituted by the receiver,--at least where it is not made to appear that the receiver is not prosecuting the case in good faith for the best interests of the creditors, or in some way has disregarded or violated the duties of his trust in that regard.

Error to district court, Sheridan county; Westover, Judge.

Action by A. P. Brink, receiver of the Bank of Rushville, against William T. May and others. Willis E. Brown intervened. From a judgment the intervener brings error. Affirmed.

[78 N.W. 280]

W. W. Woods and Stewart & Munger, for plaintiff in error.

Frank T. Ransom and W. W. Morsman, for defendants in error.

NORVAL, J.

This action was instituted by the receiver of the Bank of Rushville to enforce stockholders' individual liability for the debts of the bank. Willis E. Brown, a creditor

[78 N.W. 281]

of the bank, sought to intervene, and his application therefor was denied; and upon stipulation of the parties a judgment was rendered in favor of the receiver and against the defendants for the sum of $2,600. Brown has prosecuted a petition in error.

A single question is presented for the consideration of this court, namely, did the court below err in refusing to permit Brown to intervene? We are all of the opinion that the answer must be in the negative. It has been judicially determined that an action like the present one must be brought for the benefit of all the creditors of the corporation, and when a receiver has been appointed the suit should be prosecuted in his name. Trust Co. v. Funk, 49 Neb. 353, 68 N. W. 520;German Nat. Bank of Lincoln v. Farmers' & Merchants' Bank of Holstein, 54 Neb. 593, 74 N. W. 1086. A receiver for the Bank of Rushville had been appointed, and he instituted suit against the stockholders to charge them individually for the debts of the corporation; and the creditor could not maintain an independent action to enforce the same liability against defendants. If Brown, therefore, could not in his own right have instituted a separate suit, manifestly he could not intervene in the one brought by the receiver,--at least unless it was shown that the receiver was either...