Hutchings v. Lampson

• Decision Date: 08 November 1897
• Citation: 82 F. 960
• Parties: HUTCHINGS v. LAMPSON et al.
• Court: U.S. District Court — Northern District of Illinois

82 F. 960

HUTCHINGS v. LAMPSON et al.

United States Circuit Court, N.D. Illinois, Northern Division.

November 8, 1897

Thompson Delamater & Clark, for plaintiff.

David Kirtan, for defendants.

GROSSCUP District Judge (orally).

The action is to recover against the defendant on his statutory liability as a shareholder in a Kansas corporation. The declaration sets up the existence of the corporation, the constitution and statutory provisions of Kansas relating to liability of shareholders therein, the obtaining of the judgment, and the issuance of execution thereon, returned nulla bona, and some other facts not essential to the inquiry raised by the demurrer. The declaration shows that the original debt, merged into the judgment, was contracted in January, 1882, and matured four years thereafter; that judgment thereon was recovered in the United States circuit court for the district of Kansas October 8, 1888, and on the 25th of September, 1890, a pluries execution was issued thereon, which on the 25th of September, 1890, was returned by the marshal nulla bona. The action in this court was begun on the 24th of August, 1897, and is by the executor of the party to whom the debt was originally due. It is not alleged when he became such executor, nor is the date of the decrease of the original creditor averred. The question raised by the demurrer to the declaration relates to the statute of limitation.

In states where the statutory liability of the shareholder is primary (that is, where the creditor can proceed against the shareholder irrespective of a judgment and execution against the corporation), an action such as this is considered to be upon the original indebtedness; and, if the evidence of such original indebtedness is a promissory note, the statutory limitation of 10 years, beginning at the maturity of such note, would be applied. The promissory note evidencing the original indebtedness in this case matured in January, 1886 and but for the fact that the payee, in the interval, died the statute of limitations would have run in January, 1896. The declaration does not show any facts which legally enlarge the time of the running of this statute.

But the liability of the defendant in this cause is not primary under the laws of Kansas. Such liability is contingent upon the failure to collect the debt from the corporation. Clearly, then, this action is not upon the original promissory note. Nor is it...