Latimer v. Citizens' State Bank

• Decision Date: 14 May 1897
• Citation: 102 Iowa 162,71 N.W. 225
• Parties: LATIMER ET AL. v. CITIZENS' STATE BANK ET AL.
• Court: Iowa Supreme Court

102 Iowa 162

71 N.W. 225

LATIMER ET AL.

v.CITIZENS' STATE BANK ET AL.

Supreme Court of Iowa.

May 14, 1897.

Appeal from district court, Franklin county; S. M. Weaver, Judge.

Plaintiffs, creditors of the Brule County Bank of Chamberlain, S. D., bring this action at law to charge the defendants respectively with a balance unpaid on stock of said Brule County Bank owned by each of them. The case was tried to the court, and a judgment rendered in favor of the plaintiffs. Defendants appeal. Affirmed.Taylor & Evans, for appellants.

J. W. Luke and E. P. Andrews, for appellees.

GIVEN, J.

1. There is but little dispute as to the facts of this case, and those necessary to be noticed are as follows: The Brule County Bank, a corporation organized under the laws of South Dakota, and doing business in Chamberlain, in that state, drew its draft in favor of the plaintiffs for $1,788.48 on the Union Stock Yards State Bank of Sioux City, Iowa. On presentation of said draft to the bank in Sioux City, payment was refused, of which fact the Brule County Bank was duly notified. Payment was demanded of the Brule County Bank, which it failed to make, being at that time insolvent. The defendants, all residents of Franklin county, Iowa, were at, before, and since said transaction each owners of shares of the capital stock of said Brule County Bank of the par value of $100 per share, as follows: The Citizens' State Bank owned 50 shares, D. W. Mott 25 shares, K. S. Cole 10 shares, and E. S. Patterson 2 shares. But 50 per cent. of the face value of these shares of stock has been paid. The statute of South Dakota under which the Brule County Bank was organized and doing business provides as follows: “Each stockholder of a corporation is individually and personally liable for the debts of the corporation to the extent of the amount that is unpaid upon the stock held by him. Any creditor of the corporation may institute joint or several actions against any of its stockholders that have not wholly paid the capital stock held by him, and in such action the court must ascertain the amount that is unpaid upon the stock held by each stockholder and for which he is liable, and several judgments must be rendered against each in conformity therewith. The liability of each stockholder is determined by the amount unpaid upon the stock or shares owned by him at the time such action is commenced, and such liability is not released by any subsequent transfer of stock. And in no other case shall the stockholders be individually and personally liable for the debts of the corporation. The term ‘stockholder,’ as used in this section, shall apply not only to such persons as appear by the books of the corporation to be such, but also to every equitable owner of stock, although the same appear on the books in the name of another; and also to every person who has advanced the installments or purchase money of stock in the name of a minor, so long as the latter remains a minor; and also to every guardian or other trustee who voluntarily invests any trust funds in the stock.” Comp. Laws, § 2933. It is under these facts and this statute that the plaintiff seeks to charge the defendants, respectively, with the balance unpaid on their shares of stock to the amount of the indebtedness due to the plaintiffs from the Brule County Bank.

2. The questions of law presented on this appeal were raised by a demurrer to the petition, which was overruled, and substantially the same question, with others, was raised by the answer. We will proceed to consider such of these questions as are discussed in the arguments before us. Appellant's first contention is that said statute of South Dakota “provides the certain remedy to be pursued for the enforcement of the liability thereby created, and such remedy is exclusive, and can be pursued only in the state of South Dakota.” Appellants cite a number of cases in support of this contention, relying more particularly upon the following: Bank v. Rindge (Mass.) 27 N. E. 1015;Fowler v. Lamson (Ill. Sup.) 34 N. E. 932;May v. Black (Wis.) 45 N. W. 949;Bank v. Francklyn, 120 U. S. 747, 7 Sup. Ct. 757;Young v. Farwell (Ill. Sup.) 28 N. E. 845;Marshall v. Sherman (N. Y. App.) 42 N. E. 419. We will not here consider these cases separately. It is sufficient to say that, as applied to this question, they may be summed up as holding as follows: That the courts of a state will not enforce a statutory liability created by the statute of another state when a special remedy is provided for its enforcement. The cases of Bank v. Rindge, Fowler v. Lamson, and Marshall v. Sherman were based upon the constitution and statutes of Kansas, providing an “individual liability of stockholders to an additional amount equal to the stock owned by such stockholder,” and a special remedy against the stockholders and as between the stockholders. May v. Black was under a statute of Michigan creating “personal liability for all claims for labor performed,” and provided as a remedy a joint action in assumpsit against the corporation and any or all stockholders, and “that such action shall be brought in the county where the mine is located.” How. Ann. St. §§ 4110, 4112. Young v. Farwell was against stockholders in a Michigan mining corporation subject to the same statute. Bank v. Francklyn is not in point, as it simply holds that where a...