Hoyt v. Bunker

• Court: United States State Supreme Court of Kansas
• Citation: 50 Kan. 574,32 P. 126
• Parties: W. M. HOYT v. L. A. BUNKER et al
• Decision Date: 01 January 1893

32 P. 126

50 Kan. 574

W. M. HOYT v. L. A. BUNKER et al

Supreme Court of Kansas

January 1, 1893

Error from Reno District Court.

ACTION by Hoyt against Bunker and others, to enjoin defendants from obtaining executions against the stockholders of the Hutchinson Union Stock-Yards Company, and restraining the stockholders from paying the executions till plaintiff's and defendants' rights and priorities are finally determined. A demurrer to the petition was sustained, and plaintiff brings error. The opinion, filed January 7, 1893 states the material facts.

Case be reversed and remanded for further proceedings.

Leslie & Crawford, for plaintiff in error.

Whiteside & Gleason, and F. F. Prigg, for defendants in error.

OPINION

STRANG, C.

This was a proceeding by injunction, to restrain L. A. Bunker, the Valley State Bank, the National Bank of Commerce, and W. F Mulkey as assignee, and the First National Bank, from obtaining executions and proceeding against A. J. Lusk, J. F Greenlee, E. S. Handy, W. E. Hutchinson, and L. C. Welton stockholders in the Hutchinson Union Stock-Yards Company, and to restrain the said stockholders from paying to said defendants the several sums claimed by them against said stock-yards company until the rights and priorities of the plaintiff and the defendants seeking said executions be finally determined. The petition was demurred to. The court sustained the demurrer, and the case is brought here by the plaintiff below.

The petition in the court below alleges, that on the 4th day of October, 1890, in the district court of Reno county, the plaintiff obtained a judgment against the defendant, the Hutchinson Union Stock-Yards Company, for the sum of $ 9,790, which was by the court declared a first lien upon the property of said defendant therein described; and it was ordered that, after the expiration of six months, said property be sold, and the proceeds, after payment of costs, be applied to payment of said judgment; that after the six months stay had expired, the property was sold for $ 5,000, and the proceeds applied on said judgment, leaving a balance of said judgment unpaid; that after the confirmation of said sale, the plaintiff procured an execution to issue for the remainder of said judgment, which was levied upon other property of said stock-yards company, which was sold, and the proceeds applied upon said judgment, leaving a balance still due of $ 4,812; that plaintiff then caused another execution to issue on said judgment, which was returned "No property found;" and the plaintiff alleges in his petition that there was no property whereon to levy this last execution; that on the 14th day of August, 1891, and after the return of said execution "No property found," the plaintiff filed his motion to charge the stockholders of said stock-yards company with the payment of the balance of said judgment, and served notice thereof upon certain of said stockholders, and that on the 15th day of September, 1891, said motion was heard by the court, as to the stockholders made defendants in this case, and that the court ordered execution to issue against them; that the defendants, except the defendant the Hutchinson Union Stock-Yards Company, obtained judgments against said stock-yards company amounting, on the average, to about $ 2,000 each; that executions on some of them were levied upon the property of the stock-yards company, and the property was appraised at $ 5,000, but such executions were returned showing the property not sold for want of bidders; that afterwards executions were issued on all of said judgments, each of which was returned, "No property found whereon to levy this execution sufficient to make the amount of the within judgment;" that after said executions were so returned, the defendants L. A. Bunker as the People's State Bank, the Valley State Bank, and W. F. Mulkey as the National Bank of Commerce, filed motions and caused notices thereof to be served upon a large number of the stockholders of the said stock-yards company to appear and show cause why orders should not be allowed for executions to issue against them, as such stockholders, in favor of said defendants, for the amount of their judgments; that the said L. A. Bunker and the Valley State Bank have obtained orders against certain of the said stockholders, against whom this plaintiff is also proceeding, requiring them to pay over the amount of their liability on the judgments of said L. A. Bunker and the Valley State Bank, and that the defendants the First National Bank and the National Bank of Commerce are also proceeding against said stockholders.

With these allegations in the petition, did the court err in sustaining the demurrer thereto? We think so. We believe the petition shows the existence of a state of facts, in connection with the litigation between the parties seeking to enforce their claims against the Hutchinson Union Stock-Yards Company that authorizes the court to enjoin the defendants from proceeding to enforce their claims against the stockholders of said corporation and the stockholders themselves from paying over on the judgments of the other defendants herein, until the rights and priorities of the plaintiff and defendants are settled by the court. All the parties to the suit are seeking the enforcement of claims against the stockholders of their common judgment debtor, the Hutchinson Union Stock-Yards Company, and they are all moving under P 1192, General Statutes of 1889. But it seems that the plaintiff proceeded strictly according to the provisions of that paragraph of our statutes, while it is alleged by him that the defendants seeking the enforcement of their claims did not, and that by reason of the fact that the plaintiff followed the directions of the statute, and such defendants did not, the plaintiff has acquired the first lien upon the funds in the hands of the stockholders of the corporation, though the defendants, moving in the same direction, filed their motions first in point of time. Since all the creditors of the defendant the Hutchinson Union Stock-Yards Company are pursuing their claims under the statute, we think they should proceed according to the provisions of such statute. A proper construction of P 1192 requires the judgment creditor of a corporation to pursue the property of said corporation as long as any property thereof can be found upon which an execution can be levied, before resorting to the proceeding therein provided against the stockholders. In other words, the property of the corporation must be exhausted before the creditor may resort to the fund in the hands of the stockholders thereof. In this case the plaintiff, Hoyt, pursued the statute strictly. He sold, on an order of sale, the property of the corporation on which he had a lien, and applied the proceeds on his judgment. He then caused a general execution to issue, and had it levied upon other property belonging to the corporation, which was sold, and the proceeds applied upon his judgment; and there being a balance still unpaid thereon, he procured still another execution to issue thereon, which was returned "No property found." He then proceeded under the statute to enforce his remedy...