Kiggins v. Munday

• Decision Date: 12 April 1898
• Parties: KIGGINS v. MUNDAY ET AL.
• Court: Washington Supreme Court

52 P. 855

19 Wash. 233

KIGGINS v. MUNDAY ET AL.

Supreme Court of Washington

April 12, 1898

Appeal from superior court, King county; E. D. Benson, Judge.

Action by Isaac C. Kiggins against Charles F. Munday and others. From a judgment in favor of certain defendants, plaintiff appeals. Affirmed.

George A. Hurd, for appellant.

White Munday & Fulton, for respondent Chas. F. Munday.

Strudwick & Peters and Corliss, Sangland & McKay, for respondent Pullman Loan & Savings Bank.

SCOTT C.J.

The Guarantee Loan & Trust Company was incorporated to engage in the following lines of business, as stated in its articles of incorporation: "First, to loan money on real or personal security, and to sell or otherwise negotiate such loans; second, to buy, sell, negotiate, and guaranty the payment of notes, bonds, mortgages, bills of exchange, and other evidences of indebtedness; third, to make, execute, and deliver its bonds or other obligations in writing; fourth, to engage in and carry on the business of banking to such an extent, and in all such branches, as may legally be done under the laws of Washington territory; fifth, to purchase sell, mortgage, and convey real and personal property; sixth to accept and execute all trusts, fiduciary and otherwise seventh, to do any and all things necessary, proper, or convenient for carrying out the objects and accomplishing the purpose for which the corporation is formed." After it had continued in business for several years, suit was begun by a creditor, alleging its insolvency, and praying for the enforcement and collection of the statutory liability against the stockholders of the corporation, and for the appointment of a receiver, etc. The court has not found it necessary to pass on some of the questions argued, and the following is a sufficient statement to present the matter decided: A receiver was appointed, and he filed a report and petition setting forth the condition of the corporation, and stating therein that there were two classes of creditors of the corporation, viz. the obligations arising out of transactions ordinarily incident to a banking business, including deposits, general ledger accounts, rediscounts, bills payable due the bank, etc.; and the second class was given as those arising by virtue of guaranties of mortgages negotiated. He set forth that he had in his possession the sum of $500, which had been paid in to him by one of the stockholders on account of his statutory liability on the stock held by him, and that, unless otherwise directed by the court, he would apply this sum on the claims mentioned as belonging to the first class, to the exclusion of claims given as belonging to the second class. Thereafter the Pullman Loan & Savings Bank, of Pullman, Ill., filed its petition praying that the sum so held by the receiver be distributed ratably to the creditors of the first class exclusively; and the appellant and others, who were holders of mortgage claims guarantied by the defendant corporation, filed petitions praying that said sum should be ordered distributed ratably among all the creditors of the corporation, and that they be entitled to share equally in all its assets. The court held that the amounts collected from the stockholders on account of their statutory liability should be applied exclusively upon the claims belonging to the first class, and this appeal was taken.

Section 11, art. 12, of the constitution is as follows: "No corporation,...