Miller v. Connor
| Decision Date | 04 November 1913 |
| Parties | ALFRED L. MILLER et al., Appellants, v. FLORENCE E. CONNOR, Respondent |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court--Hon. George H. Williams Judge.
REVERSED AND REMANDED.
Stephen C. Rogers for appellants.
(1) The court erred in refusing to permit the introduction in evidence of "plaintiff's 'exhibit D'," the decree of the Colorado Court ascertaining pro rata amount due by each stockholder, because (a) The cause of action arose in Colorado and is governed by the limitation Statutes of that State. R. S. 1899, Sec. 4280; Berkley v Tootle, 163 Mo. 584; Wojtylak v. Kansas & Texas Coal Co., 188 Mo. 260; Merritt Creamery Co. v Railroad, 128 Mo.App. 420; McCoy v. Railroad, 134 Mo.App. 622. (b) To rely on the Colorado Statute of Limitations it should have been pleaded. Pats. Mo. Code Pl Sec. 185, p. 115-16; Stevenson v. Smith, 189 Mo. 447. (c) The cause of action did not arise until a judicial ascertainment was held. R. S. 1899, Sec. 985; Boeppler v. Menown, 17 Mo.App. 447; McClaren v. Franciscus, 43 Mo. 452; Pfaff v. Gruen, 92 Mo.App. 560; 10 Cyc., pp. 656, 672, 675, 681, 724, 726, 727, 729, 731, 732, 733, 735; Bernheimer v. Converse, 206 U.S. 516; Buenz v. Cook, 15 Colo. 38; Richardson v. Boot, 18 Colo. App., 140; Zang v. Wyant, 25 Colo. 551; Abbott v. Goodall, 100 Me. 235; Miller v. Smith, 58 A. 638; Miller v. Willett, 62 A. 178; 65 A. 981; Miller v. Clifford, 133 F. 880; Hale v. Cushman, 96 Me. 148; Gillin v. Sawyer, 93 Me. 152; Hawkins v. Glenn, 131 U.S. 319; McClaine v. Rankin, 197 U.S. 154; Scovill v. Thayer, 105 U.S. 143; Rankin v. Barton, 199 U.S. 228; Glenn v. Liggett, 135 U.S. 533; Glenn v. Marbury, 145 U.S. 499; Howarth v. Ellwanger, 86 F. 54; Goss v. Carter, 156 F. 747; King v. Pomeroy, 121 F. 287; McCarter v. Ketcham, 72 N.J.L. 247; Flynn v. Am. Trust Co., 69 A. 771. (2) The court erred in rendering judgment for defendant, and in not rendering judgment for plaintiffs. (a) Because the defendant by voluntarily becoming a stockholder submitted herself to the jurisdiction of the Colorado courts; she sought the benefits and must assume the burdens. Pfaff v. Gruen, 92 Mo.App. 566; Howarth v. Lombard, 175 Mass. 570; Howarth v. Angle, 56 N.E. 489; Kirtley v. Holmes, 107 F. 1; Hale v. Hardon, 95 F. 747, 37 C. C. A., 240; Converse v. Ayer, 84 N.E. 98; Young v. Farwell, 139 Ill. 326; 10 Cyc., 735 "3." (b) The decree of the Colorado court is prima facie good. Pfaff v. Gruen, 92 Mo. App., 560; Tremblay v. Ins. Co., 97 Me. 547; Tourigny v. Houle, 88 Me. 406; Laing v. Rigney, 160 U.S. 531, 10 Cyc., 735, "Q. 3".
Walter H. Saunders, for respondent.
(1) The objection to the introduction of any testimony should have been sustained, because the petition did not state a cause of action, since it attempted to bind defendant by an alleged decree to which she was not a party, contrary to the due process of law requirements of both the Federal and State Constitutions. Pennoyer v. Neff, 95 U.S. 714; Bernheimer v. Converse, 206 U.S. 516. (2) The alleged Colorado decree offered should have been excluded, because (a) It was not a final decree; (b) The alleged cause of action was, in any event, barred by the Missouri Statute of Limitations of five years as to liability created by statute, other than a penalty or forfeiture. Section 4273, R. S. 1899. The Colorado Statute of Limitations does not govern in this case because neither pleaded nor proved, and because, in any event, it would be inapplicable, if prescribed a longer time than the Missouri statute, since Section 4280, R. S. Mo. 1899, gives the local defendant the benefit of a foreign statute when prescribed a shorter period than the local statute. But it does not apply when the foreign statute of limitations is longer than the local statute. Bemis v. Stanley, 93 Ill. 230; Wright v. Mordaunt, 77 Miss. 537. (3) In this case, the Statute of Limitations begins to run from the insolvency of the bank. Bennett v. Thorne, 78 P. 937; Willius v. Albrecht, 100 Minn. 436; Bridge Co. v. City of Durand, 99 N.W. 603. (4) Section 985, R. S. 1899, is inapplicable as to the procedure, because it in terms applies only to unpaid stock subscriptions, and Section 1331, R. S. 1899, which would be applicable, is now obsolete. Banking Company to use of Simpson v. McCoy, 168 Mo. 634. (5) There is no presumption that the common law obtains in Colorado. Witascheck v. Glass, 46 Mo.App. 209. And it is conceded that there is no statutory procedure in Colorado authorizing the fixation of stockholder's double liability. There is no statutory procedure in this State on the subject. (6) Defendant was not a party to the alleged decree, sought to be introduced, in any manner, nor is she bound by privity between the corporation and herself on the theory of representation. Pennoyer v. Neff, 95 U.S. 714; Bernheimer v. Converse, 206 U.S. 516; Due Process of Law Clause, 14th Amendment, F. Const.; Section 30, Art. 2 of Missouri Constitution. The maxim audi alteram partem is the foundation of all well-ordered jurisprudence. Clark v. Knowles, 197 Mass. 35. (7) At the time the alleged decree was offered in evidence, there had been no proof introduced to show that the defendant was the owner of two shares of stock in the State bank; hence, in any aspect, the offer should have been rejected.
This is a suit at law on the statutory liability of a stockholder in an insolvent bank for the pro rata proportion of its indebtedness, ascertained in favor of the creditors of the bank against the shareholders. The court found the issue and gave judgment for defendant as if the statute of limitations pleaded in the answer barred the right of recovery, and plaintiffs prosecute the appeal.
It appears from the petition, and likewise from the evidence in the record, that the State Bank of Monte Vista, Colorado, was a corporation organized and doing business under the laws of that State. On June 15, 1899 the bank made an assignment of all of its assets to Norman H. Chapman, under the laws of Colorado, for the benefit of its creditors. It was incorporated for $ 80,000 and its 800 shares of stock represented a par value of $ 100 each. Defendant was and is owner and holder of two shares of the capital stock of the bank and she is a resident of the city of St. Louis, Missouri. It appearing that the assets of the bank were wholly insufficient to meet its liabilities, the three plaintiffs, Alfred L. Miller, Dan Workman and Phebe C. Smith, together with many other creditors of the bank, on June 9, 1905 instituted a suit in equity against the bank, Norman H. Chapman, its assignee, and all of its stockholders in the district court at Denver, Colorado, for an accounting and ascertainment of the pro rata amount due by the respective stockholders under their secondary or statutory liability for the debts of the bank. The district court at Denver possessed jurisdiction in that behalf, and it appears that the bank, Chapman, the assignee, and others were duly served with process. The bank and the assignee both defaulted, however, and John E. Kipp, one of the stockholders therein, appeared, filed his answer and made defense to the suit. This defendant was a nonresident of Colorado and not served in the cause, for that she resided in the city of St. Louis, and she made no appearance therein.
On May 28, 1907, a hearing was had in the district court at Denver, and a finding and decree were rendered in the equity case, by which the entire indebtedness of the bank then unpaid was ascertained to be $ 84,318.89, and that the total liabilities of the stockholders of the bank under the Colorado statute were $ 160,000--that is, double the amount of the stock held by them. The decree sets forth the names of all of the creditors of the bank, and likewise sets forth the names of all of the stockholders, together with the amount of stock owned by each. Having thus found and ascertained the entire indebtedness of the bank and accounted for all of its assets and having found and decreed a deficiency of $ 84,319.89, the court further found and ascertained a liability under the Colorado statute imposing a double liability in such cases of 53.5 per centum of the stock liability against each and all of the stockholders. By this ascertainment and decree, defendant, owner of two shares of the stock of $ 100 par value each, was decreed to be indebted to plaintiffs in the amount of $ 214.
The petition sets forth these facts and pleads as well the Colorado statute by which the liability is fixed upon such stockholders. That statute is as follows:
"Shareholders in banks, savings banks, trust deposits and security associations shall be held individually responsible for debts, contracts or engagements of the said association in double the amount of the par value of the stock owned by them respectively." [See Laws of Colorado, 1885, p. 264.]
Under this statute and in accordance with the ascertainment decreed by the district court at Denver, Colorado, plaintiffs pray judgment against defendant for her pro rata contribution to the sum of $ 84,319.89--that is, $ 214. By the ascertainment decree in equity, it appears the court appointed the three plaintiffs to prosecute this and other suits for themselves and all other creditors likewise situated, to the end of enforcing the payment of the amounts ascertained to be due from the stockholders.
By her answer, defendant pleaded the Missouri statute of limitations--that is, section 4273, Revised Statute 1899; the same to be found in our present statute, section 1889, Revised Statute 1909. This section, together with section 1887, Revised Statute 1909 (Sec. 4271, R. S. 1899) provides...
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