Guerney v. Moore

• Court: United States State Supreme Court of Missouri
• Writing for the Court: Gantt
• Citation: 131 Mo. 650,32 S.W. 1132
• Decision Date: 19 November 1895
• Parties: GUERNEY v. MOORE.

32 S.W. 1132 131 Mo. 650 GUERNEY
v.
MOORE. Supreme Court of Missouri, Division No. 2. November 19, 1895.

WRIT OF EXECUTION — RETURN — INSOLVENT CORPORATION — ACTION AGAINST STOCKHOLDERS — REAL PARTY IN INTEREST — TRUSTEE OF EXPRESS TRUST — GUARANTOR OF NOTE — PAYMENT — STOCKHOLDER AS CREDITOR OF THE CORPORATION — REMEDIES — STOCKHOLDERS' DOUBLE LIABILITY — ENFORCEMENT IN FOREIGN STATE.

1. Under Gen. St. Kan. par. 4567, providing that the sheriff shall return a writ of execution "within" 60 days from the date thereof, a return at any time before the expiration of such period is not premature if defendant is notoriously insolvent.

2. Under Gen. St. Kan. par. 1192, providing that if execution is issued against a corporation, except a railway, religious, or charitable corporation, and there cannot be found any property whereon to levy, the creditor may proceed by action against the stockholders, etc., execution against the corporation, and a nulla bona return, are not necessary in order to hold the stockholders, if it be shown aliunde that the corporation had no assets, and had ceased to do business.

3. Gen. St. Kan. par. 1204, provides that if any corporation other than railway, religious, or charitable corporations be dissolved, leaving debts unpaid, suits may be brought against the stockholders. Section 1200 provides that any such corporation shall be deemed dissolved for the purpose of enabling the creditor to prosecute an action against the stockholders to enforce their individual liability, if it be shown that the corporation has suspended business for more than one year. Held, that the liability of the stockholders is a secondary one only; and, if a debt left unpaid by the corporation at the time of its dissolution be a judgment, the judgment creditors' suit against the stockholders is properly founded thereon, and need not be brought on the original cause of action.

4. Where a written or verbal assignment of a chose in action is absolute in its terms, so that the entire apparent legal title vests in the assignee, such assignee is the "real party in interest," within Rev. St. Mo. 1889, § 1990, permitting him to sue in his own name; and it is immaterial what arrangements may have been made between him and the assignor in respect to the proceeds of the judgment.

5. The fact that such assignee is the trustee of an express trust, and is to account to the assignor for the proceeds of the judgment, makes him none the less the real party in interest.

6. The transfer by the beneficiary of an express trust of his interest in the trust fund does not revoke the trust, but the trustee still remains such for the beneficial owner.

7. Plaintiff, to whom a note against a corporation had been assigned by a bank, recovered judgment thereon, but execution against the property of the corporation was returned unsatisfied. S., who was guarantor of the note, deposited the amount due the bank, with the express agreement that the deposit was to be security, and not payment, and took a certificate of deposit "not subject to check." The bank agreed to prosecute suits against the stockholders of the corporation to enforce their individual liability. Held, that such deposit was not a payment in law.

8. Gen. St. Kan. par. 1205, providing that, if any stockholder of a corporation other than

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railway, religious, or charitable corporations pay more than his share of any debt of the company, he may compel contribution from the other stockholders, does not restrict a stockholder who has paid debts of the corporation in excess of his statutory liability to an action for contribution, but he may invoke all the remedies open to other creditors.

9. Gen. St. Kan. pars. 1192, 1206, making a stockholder of a corporation other than railway, religious, or charitable corporations liable to creditors of the company for an amount equal to the amount of his stock, together with any sum remaining unpaid thereon, is a contractual, not a penal, statute, and will therefore be enforced in Missouri, though the statutes of the latter state restrict a stockholder's liability to the amount of his stock.

10. Under Gen. St. Kan. pars. 1192, 1206, making a stockholder of a corporation other than railway, religious, or charitable corporations liable to creditors of the company for an amount equal to the amount of his stock, in addition to any sum remaining unpaid thereon, a subscriber for $5,000 of stock, who has paid $2,500 thereon, is liable for $7,500, notwithstanding it was agreed on organization to issue stock as fully paid when only 50 cents on the dollar was actually paid.

Appeal from circuit court, Jackson county; E. L. Scarritt, Judge.

Action by David E. Guerney against L. R. Moore to enforce a personal liability against defendant, as stockholder in a corporation then insolvent. From a judgment for plaintiff, both parties appeal. Modified.

W. L. Stocking, for plaintiff. Peak & Ball, for defendant.

GANTT, P. J.

This cause is here on cross appeals from the circuit court of Jackson county. There is practically no conflict in the evidence. In the year 1887, the defendant, L. R. Moore, George Sheidley, and others, entered into the agreement hereinafter set out. In October, 1887, a corporation was formed in pursuance of this agreement, under the laws of Kansas, known as the Kansas City Radiator & Iron Foundry Company. The chief promoter and organizer of this corporation was Joseph Askins. This corporation was organized for manufacturing and business purposes, and was not a railway, a religious, or charitable corporation.

At the time of the organization of this corporation, the following paragraphs of the Kansas statutes were, and still are, in full force and effect:

"1192. Execution against Stockholder; Action. If any execution shall have been issued against the property or effects of a corporation, except a railway or a religious or charitable corporation, and there cannot be found any property whereon to levy such execution, then execution may be issued against any of the stockholders, to an extent equal in amount to the amount of stock by him or her owned, together with any amount unpaid thereon; but no execution shall issue against any stockholder, except upon an order of the court in which the action, suit or other proceeding shall have been brought or instituted, made upon motion in open court, after reasonable notice in writing to the person or persons sought to be charged; and, upon such motion, such court may order execution to issue accordingly; or the plaintiff in the execution may proceed by action to charge the stockholders with the amount of his judgment."

"1200. How Dissolved. A corporation is dissolved — first, by the expiration of the time limited in its charter, second, by a judgment of dissolution rendered by a court of competent jurisdiction; but any such corporation shall be deemed to be dissolved for the purpose of enabling any creditors of such corporation to prosecute suits against the stockholders thereof to enforce their individual liability, if it be shown that such corporation has suspended business for more than one year, or that any corporation now so suspended from business shall for three months after the passage of this act fail to resume its usual and ordinary business."

"1204. Action against Stockholder. If any corporation, created under this or any general statute of this state, except railway or charitable or religious corporations, be dissolved, leaving debts unpaid, suits may be brought against any person or persons who were stockholders at the time of such dissolution, without joining the corporation in such suit; and if judgment be rendered, and execution satisfied, the defendant or defendants may sue all who were stockholders at the time of dissolution for the recovery of the portion of such debt for which they were liable, and the execution upon the judgment shall direct the collection to be made from property of each stockholder, respectively; and if any number of stockholders (defendants in the case) shall not have property enough to satisfy his or their portion of the execution, then the amount of deficiency shall be divided equally among all the remaining stockholders, and collections made accordingly, deducting from the amount a sum in proportion to the amount of stock owned by the plaintiff at the time the company dissolved.

"1205. Contribution. If any stockholder pay more than his due proportion of any debt of the corporation, he may compel contribution from the other stockholders by action."

"1206. Liability. No stockholder shall be liable to pay debts of the corporation, beyond the amount due on his stock, and an additional amount equal to the stock owned by him."

"4567. Execution Returnable. The sheriff or other officer, to whom any writ of execution shall be directed, shall return such writ to the court to which the same is returnable, within sixty days from the date thereof."

On March 21, 1890, the directors resolved to close out the business of the corporation, collect all moneys due it, sell out its works, and pay the proceeds to its creditors. After that date no goods were manufactured or sold, and no business transacted, except such as were necessary in closing up its

32 S.W. 1134

business. In July, 1890, it effected a sale of its entire plant, and placed the purchaser in possession thereof, though the deed was not delivered and the purchase money paid until January, 1891. By January, 1891, all of its assets had been converted into cash, and paid out to its creditors. After that time it had no assets of any kind, except some uncollectible and worthless accounts. The last stockholders' meeting was held in November, 1890, and the last directors' meeting in February, 1891. Since February, 1891, there has been no meeting of either stockholders or directors, and no business of any kind transacted. At the time of the directors' meeting of March 21, 1890,...