Cooper v. Disbrow

• Decision Date: 24 October 1898
• Citation: 76 N.W. 1013,106 Iowa 550
• Parties: COOPER ET AL. v. DISBROW ET AL.
• Court: Iowa Supreme Court

106 Iowa 550

76 N.W. 1013

COOPER ET AL.

v.DISBROW ET AL.

Supreme Court of Iowa.

Oct. 24, 1898.

Appeal from district court, Cass county; N. W. Macy, Judge.

In December, 1893, Isaac Dickerson, as a stockholder, brought a suit in equity to wind up the affairs of the Cass County Bank, it being insolvent, and procured the appointment of a receiver,--Theodore G. Steinke. Thereafter suits were commenced against the bank and its stockholders by creditors of the bank. One ground of recovery against the stockholders was a provision in the articles of incorporation for double liability. The appellants in this case are Park Disbrow and some 28 others, who were creditors of the bank, and are defendants, and known in its proceeding as cross petitioners. In May, 1894, T. N. Heselgrave, in his own behalf and that of 16 others, being creditors of the bank, commenced a suit by attachment against the bank and its stockholders, among which were W. C. and Eliza Cooper, as executors and trustees under the will of one John W. Russell, deceased. Throughout the case the Coopers are parties only in their representative capacity, and may be referred to by their own name. They were the owners of $12,000 of the stock of the bank, and were also creditors of the bank. Cornelia K. Winslow was the owner of $6,000 of the stock of the bank, a creditor, and a defendant in the attachment proceeding. The case of Dickerson against Cass County Bank is designated in the record as number 4,069. In September, 1894, the Coopers filed their cross petition in the original case,--that of Dickerson against Cass County Bank, No. 4,069,--m aking Dickerson, the Cass County Bank, and all the creditors of the bank--more than 600 in all--parties thereto, and gave notice to all except 3, they being Ernestine Cotton, Susan Osgood, and Michael McEniry. The cross petition asked, upon an averment of facts, relief as follows: “That all matters and claims of individual liability against the several stockholders to the various creditors of said Cass County Bank be fully adjusted, ascertained, settled, and determined, and that all parties therein be compelled to set forth their respective claims against the stockholders of said Cass County Bank and said cross petitioners, and that the court grant full, complete, equitable relief in the premises.” To that petition the appellants in this case, Disbrow and others, and Cornelia K. Winslow appeared, but none of the other creditors. On motion of appellants, the cross petition was stricken from the files “so far as to strike therefrom all that part thereof in relation to the double liability of the stockholders of the said Cass County Bank, and in relation to the attachment of the private property of the stockholders, and the enjoining of suits against the stockholders on account of the misjoinder of actions.” To the above is added the following order: “Leave is, however, given the cross petitioners to docket said matter so stricken from their cross petition as a separate suit, and the clerk of said court is so ordered to docket said matters, and the cause, when docketed, shall be entitled in the name of these cross petitioners as plaintiffs, and against all the defendants named in said cross petition, and the said cross petitioners are hereby allowed to prosecute said cause as a separate action; and it is ordered that all defendants to said petition, served with notice, shall plead to the said cause when so docketed, on or before noon of the second day of the November term, 1894, of this court,--to all of which finding both of said parties at the time except.” On the 23d of November, 1894, the Coopers caused to be docketed what is known as “Equity Case No. 4,411,” being, in substance, the cross action in case No. 4,069, with W. C. and Eliza Cooper, executors and trustees, plaintiffs. This case--No. 4,411--is the one now on appeal in this court, and will be the one hereafter referred to, unless otherwise expressed. To the petition in this case appellants and Cornelia K. Winslow answered, but none of the other creditors of the bank, notwithstanding the order of the court above set out, except C. R. Winslow, a creditor, who presented an answer and cross petition. Appellants filed answers to plaintiffs' petition, and each filed his cross petition against plaintiffs, and also against Cornelia K. Winslow and other stockholders, based substantially on the grounds set forth in their several actions at law then pending against plaintiffs and other stockholders; and their several actions at law were, by agreement of parties, and order of the court, transferred to the equity docket, and consolidated with this case. Cornelia K. Winslow also answered the petition in this case, admitting that she owned $6,000 of the stock of the bank, and alleging that in the summer of 1893 she signed notes with the Cass County Bank, on which she became liable, and has paid, and will be compelled to pay, $30,000; and she asks for a full accounting and adjustment of claim. It is also to be said that plaintiffs were depositors in the Cass County Bank in the sum of some sixteen or seventeen thousand dollars, which they ask to have considered in the adjustment. Denials were filed so as to put in issue all counterclaims or cross demands, and thereafter the court gave judgment for appellants, on their cross petitions, against Cornelia K. Winslow for $6,000, and denied to her any offset because of her claim against the bank. The court also gave to appellants, as cross petitioners, a judgment against plaintiffs, as representatives of the estate of John W. Russell, for $12,000, and denied to the estate any relief on account of their claim as depositors. The court also entered the default of the defendants served, but not answering, and estopped them from making any claim as to matters involved in the issues presented by plaintiffs and cross petitioners. These judgments were entered May 21, 1896. On the 2d of June following, Theodore G. Steinke and some 21 others, including Cotton, Osgood, and McEniry--creditors not served--filed a motion to set aside the default and decree entered May 21, 1896. The motion makes it appear that the movers had never been served with notice in the proceeding in which the Coopers are plaintiffs; that they filed their claims, under orders of the court, in the suit of Dickerson against Cass County Bank, and that in said suit an order was entered establishing their respective claims; that none of the movers were, by original notice or otherwise, notified of the kind of proceedings adopted in this case, by which they were adjudged not to be entitled to share with all other creditors of the bank in what might be adjudged to be due from stockholders on account of their statutory liability; that they believed that the filing and allowance of their claims was all that was necessary to entitle them to share in a distribution of money so received, and they did not believe such a decree would be entered. A motion to strike part of this motion was filed, and evidence taken, and upon the submission the court denied the motion to strike, and sustained the motion to set aside the default and decree. From this order Park Disbrow and 21 others appealed. Affirmed.Willard & Willard and De Lano & Meredith, for appellants.

H. S. Winslow, J. D. Critchfield, Phelps & Temple, and John W. Scott, for appellees W. C. and Eliza Cooper and Cornelia K. Winslow.

J. B. Rockafellow, for Theo. G. Steinke and others.

GRANGER, J.

1. We may first notice...