Harrison v. Scott

• Decision Date: 11 April 1908
• Docket Number: 15,461
• Parties: T. W. HARRISON v. FRANK C. SCOTT et al
• Court: Kansas Supreme Court

95 P. 1045

77 Kan. 637

T. W. HARRISON v. FRANK C. SCOTT et al

No. 15,461

Supreme Court of Kansas

April 11, 1908

Decided January, 1908.

Error from Shawnee district court; ALSTON W. DANA, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. STOCKHOLDERS--Insolvent Corporation--Contribution for Defending Litigation. Before a stockholder of an insolvent corporation is entitled to contribution from the other stockholders for costs and expenses incurred in defending litigation it must appear that the defense inured to their benefit, and that the costs and expenses were paid to relieve his co-stockholders of a common burden.

2. STOCKHOLDERS--Same. A stockholder of an insolvent corporation is not entitled to contribution from his co-stockholders for costs and expenses incurred in defending an action brought against him to recover upon his double liability, where it appears that the only defense urged was personal to himself and in no way benefited his co-stockholders.

3. STATUTE OF LIMITATIONS -- Suspension -- Pendency of Other Proceedings. In order that the pendency of other proceedings will have the effect to toll the statute of limitations upon a cause of action the proceedings must be such as prevent the enforcement of the remedy by action.

4. STATUTE OF LIMITATIONS -- Contribution--Stockholders of Insolvent Corporation. The statute of limitations will run upon a cause of action in favor of a stockholder of an insolvent corporation for contribution from his co-stockholders, based upon a claim in his favor against the corporation, notwithstanding the pendency of an action against him upon his double liability in which he seeks to offset the same cause of action.

George E. Overmyer, and T. W. Harrison, for plaintiff in error.

George H. Whitcomb, Clad Hamilton, E. S. Quinton, A. B. Quinton, J S. Dean, Leonard S. Ferry, and Thomas F. Doran, for defendants in error.

OPINION

PORTER, J.:

The plaintiff sued defendants for contribution. The petition set up three causes of action. Separate demurrers were filed to each. The demurrer to the first was overruled, and those against the second and third were sustained. The plaintiff complains.

The Topeka Capital Company was organized in 1890 as a corporation under the laws of Kansas. Plaintiff and defendants were stockholders. The company became insolvent, and, in November, 1895, ceased doing business. On May 3, 1900, the Remington Paper Company recovered a judgment against it in the district court of Shawnee county for $ 10,160.84, and afterward brought an action upon the judgment in the United States circuit court against the plaintiff to recover upon his double liability as a stockholder. In June, 1904, judgment was recovered against him for $ 5500, with interest and costs. An appeal was taken, and the litigation continued until 1907, when the plaintiff satisfied the judgment by paying the sum of $ 6113.77. These facts were set up in the first count of the petition, a demurrer to which was overruled. In the second count plaintiff sought contribution from the defendants for the sum of $ 1220, for costs and expenses paid by him in defending the action in the federal courts.

The demurrer to the second count was rightly sustained. In order to entitle plaintiff to contribution from the other stockholders on account of money expended in payment of the costs of litigation it should appear from his petition that the costs were incurred for the benefit of his co-stockholders. The action in which the costs were paid was against the plaintiff upon his double liability as a stockholder, based upon a judgment against the corporation. If he had defended on the ground that the judgment was not a valid one, this might have inured to the benefit of the other stockholders, and the costs would probably have been chargeable against them in an action for contribution. Costs and expenses incurred by him in a bona fide effort to defeat the claim in whole or in part as against the company would have been as much for their benefit as his, but it is not asserted as a fact that these costs were thus incurred, nor does this appear as a necessary inference from the facts stated. So far as appears from the petition itself all of the defenses interposed by the plaintiff were personal to himself, and neither directly nor indirectly benefited the other share-holders. It is not claimed that the judgment against the company was modified in any respect, and it appears that the balance of the judgment which was not paid by the plaintiff continued as much a liability of the corporation, and indirectly of the other stock-holders, after the defense made by plaintiff as it was before. The reasonable inference from the averments of the petition appears to be that the defense made by him was solely in his own behalf; that while he was sued for $ 9000, and the judgment recovered against him was only...