Dill v. Ebey
| Decision Date | 16 November 1910 |
| Citation | 112 P. 973,27 Okla. 584,1910 OK 322 |
| Parties | DILL et al. v. EBEY. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
A complaint in a suit in equity, wherein E. as receiver of an insolvent bank joins certain subscribers to the capital stock of the bank as defendants, for the purpose of recovering unpaid subscriptions, that further alleges, in substance that the judge of the court wherein said receiver was appointed, upon application of creditors, supported by a showing that the bank was entirely insolvent, and without assets sufficient to distribute any part thereof to the bank or its shareholders, entered an order directing said receiver to retain counsel and institute proper proceedings against the defendants as subscribers for the capital stock of said insolvent bank to recover the respective amounts remaining unpaid on said subscription, or for the stock issued to them for the benefit of all the creditors of said bank, and that this suit is filed in compliance with said order, states facts sufficient to warrant the trial court to treat such suit as one brought by the creditors of said insolvent bank over which a court of equity has jurisdiction, and in which all the subscribers to the capital stock may be joined as defendants.
Under such circumstances, the right to maintain suit against the individual stockholders of an insolvent corporation to enforce their liability on unpaid stock subscriptions does not constitute such a plain, full, adequate remedy at law as to defeat a suit in equity against all stockholders for the collection and administration of the corporate assets as a trust fund for the benefit of the creditors.
Error from District Court, Okfuskee County; John Caruthers, Judge.
Suit by W. H. Ebey, receiver, against W. H. Dill and others. Judgment for plaintiff, and defendants bring error. Affirmed.
John H Burford and C. T. Huddleston, for plaintiffs in error.
Clinton A. Galbraith, Tom D. McKeown, and W. W. Witten, for defendant in error.
This suit was filed prior to statehood in the United States Court for the Western District of the Indian Territory, sitting at Okmulgee, on the equity side of the docket, by the defendant in error, W. H. Ebey, as receiver of the Citizens' Bank & Trust Company of Stonewall, as plaintiff, against the plaintiffs in error, M. W. Krouse, W. H. Dill, H. G. Malot, J. E. Guier, and Sam Ward, as defendants. The complaint, omitting the caption, is in words and figures as follows: "Comes now the said plaintiff, and represents that he is the duly appointed, qualified receiver of the Citizens' Bank & Trust Company of Stonewall, Ind. T., a corporation organized under the laws of the Indian Territory, and engaged in business at Stonewall prior to the time of the appointment of the plaintiff as its receiver, and that the defendants W. H. Dill and H. G. Malot are citizens of the Western District of the Indian Territory, and reside nearer to Okmulgee than any other place of holding court in said district, and for cause of action the plaintiff avers: (1) That heretofore, to wit, on or about the 14th day of March, 1905, the said defendants M. W. Krause, J. E. Guier, W. H. Dill, and Sam Ward, as corporators, organized the Citizens' Bank & Trust Company for the purpose of transacting a general banking and trust business at Stonewall, in the Indian Territory. That M. W. Krause was elected president, and W. H. Dill was elected vice-president, and J. E. Guier was elected cashier, of said corporation. That said officers, together with Sam Ward, constituted the first board of directors of said Citizens' Bank & Trust Company, and the articles of incorporation and certificate required by law were filed with the clerk of the United States Court of Appeals for the Indian Territory, at South McAlester, on the 13th day of February, 1905. That the objects and purposes of said corporation were set out in detail in the certificate filed as aforesaid and said certificate also recites that the capital stock of said Citizens' Bank & Trust Company is and was $25,000, divided into shares of $25 each, and that $10,000 of said capital stock had been actually paid in by the subscribers, and that the names of the stockholders and the number of shares subscribed for by them are as follows: M. W. Krause, president, 120 shares; W. H. Dill, 80 shares; J. E. Guier, 160 shares; and Sam Ward, 40 shares. That on the said 14th day of March, 1905, as the plaintiff is advised and believes, and on such information and belief alleges the fact to be, H. G. Malot subscribed for 80 shares of the capital stock of the Citizens' Bank & Trust Company, taking 40 shares of the 160 shares subscribed for by J. E. Guier, and 40 shares of the 120 subscribed for by M. W. Krause; that on the said 14th day of March, 1905, there was issued certificate No. 1 to M. W. Krause for 80 shares of the capital stock of the said Citizens' Bank & Trust Company. That on the same day certificate No. 3 for 80 shares of the capital stock of the said Citizens' Bank & Trust Company was issued to W. H. Dill; that on the same day certificate No. 5 for 80 shares of the capital stock of said Citizens' Bank & Trust Company was issued to H. G. Malot. That on the same day certificate No. 4 for 120 shares of the capital stock of the said Citizens' Bank & Trust Company was issued to J. E. Guier. That on the same day certificate No. 6 for 40 shares of the capital stock of the said Citizens' Bank & Trust Company was issued to Sam Ward. That each of the said defendants undertook and agreed to pay the said Citizens' Bank & Trust Company the par value of the respective shares of stock issued to them, namely; that M. W. Krause undertook and agreed to pay to the Citizens' Bank & Trust Company for the 120 shares of stock issued to him the sum of $3,000. That H. G. Malot undertook and agreed to pay the par value of the 80 shares of stock issued to him, to wit, $2,000. That W. H. Dill undertook and agreed to pay said Citizens' Bank & Trust Company the par value of the 80 shares of stock issued to him, to wit, $2,000. That Sam Ward undertook and agreed to pay said Citizens' Bank & Trust Company the par value of the 40 shares of stock issued to him, to wit, $1,000. That J. E. Guier undertook and agreed to pay said Citizens' Bank & Trust Company the par value of the 120 shares of stock issued to him, to wit, $3,000. That plaintiff is advised and believes, and on such information and belief alleges, the facts to be that the only one of said defendants who paid any part of the par value of said stock or anything of value for the stock subscribed for and issued to them was the defendant M. W. Krause, who paid to said Citizens' Bank & Trust Company the sum of $2,000, and that, after said sum had been paid, the same was later returned to said defendant, and as plaintiff is informed and believes, and on such information and belief alleges the fact to be, the said defendants organized said Citizens' Bank & Trust Company without any purpose or intent to pay for its capital stock or any part thereof, except the $2,000 paid in by the defendant Krause, and that this sum was paid in with distinct understanding that it should be returned after the corporation came to be a going concern, the sworn statement in the certificate of incorporation, that $10,000 has been actually paid in to the contrary notwithstanding. (2) That the said Citizens' Bank & Trust Company was and is insolvent, and on the 20th day of February, 1906, on the petition of one of its creditors, the plaintiff was appointed by the United States Court for the Southern District of the Indian Territory receiver to take charge of all of its property and effects, and to administer the same under the order of said court for the benefit of all its creditors. That the liabilities of said Citizens' Bank & Trust Company at the time the plaintiff took charge of its assets as receiver as shown by its books were $15,179.02. That a great deal of the paper of said Citizens' Bank & Trust Company is worthless, and a very small sum can be realized from the same and the rest of its assets. That after six months' efforts the plaintiff has only been able to collect on notes $60.50, and to realize on other property the sum of $100. That all of the capital stock of said Citizens' Bank & Trust Company represented as paid in, namely, $10,000, and the assets in the hands of the plaintiff as receiver will not be sufficient to pay to the creditors of said Citizens' Bank & Trust Company. (3) That on a partial presentation of the foregoing facts to Judge J. T. Dickerson an order was made on the 15th day
of August, 1906, directing the plaintiff, as receiver, to retain counsel and to institute proper proceedings against the defendants as subscribers for the capital stock of the said Citizens' Bank & Trust Company to recover the respective amounts remaining unpaid on said subscriptions, or for the stock issued to them, for the benefit of all the creditors of the Citizens' Bank & Trust Company. That this suit is filed in compliance with said order. That the plaintiff has made demand on each of said defendants for the amount due on his subscription, or for the stock of said Citizens' Bank & Trust Company issued to him. That they have each failed, neglected, and refused to pay the same or any part thereof. That there is now due the plaintiff as receiver of the Citizens' Bank & Trust Company as unpaid subscription for capital stock issued to them, namely, M. W. Krause, $3,000; W. H. Dill, $2,000; H. G. Malot, $2,000; Sam Ward, $1,000; J. E. Guier, $3,000, together with interest thereon from the 14th day of March, 1905. (4) That the plaintiff has no adequate remedy at law, and, unless this court takes jurisdiction of this suit in equity, he will be...
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