Pickering v. Hastings

• Decision Date: 05 October 1898
• Citation: 76 N.W. 587,56 Neb. 201
• Parties: PICKERING v. HASTINGS.
• Court: Nebraska Supreme Court

56 Neb. 201

76 N.W. 587

PICKERING

v.HASTINGS.

Supreme Court of Nebraska.

Oct. 5, 1898.

Syllabus by the Court.

It is the settled doctrine of this court that the liability of a stockholder in a banking corporation, under the provisions of section 7 of article 11 of the constitution, is for the creation of a trust fund for the benefit of all creditors, and an action to enforce such liability must be prosecuted for the benefit of all the creditors of the corporation against all the stockholders within the jurisdiction of the court.

Error to district court, Buffalo county; Neville, Judge.

Action by Samuel C. Hastings against William F. Pickering to enforce the individual liability of a stockholder. From a judgment for plaintiff, defendant brings error. Reversed.Greene & Hostetler, for plaintiff in error.

Wm. Gaslin, for defendant in error.

NORVAL, J.

The Commercial & Savings Bank of Kearney was incorporated under the laws of this state on September 2, 1889, and for some time thereafter was engaged in the business of banking. William F. Pickering was a stockholder therein, owning 10 shares of the stock, of the face value of $100 each. Samuel C. Hastings was a depositor in said bank, and had money on deposit therein at the time the bank closed its doors and ceased to do business. Hastings recovered a judgment against said bank in the sum of $649.80 for moneys so deposited as aforesaid. Execution was issued on said judgment, which was returned nulla bona. Thereupon this action was instituted by Hastings in his own behalf in the county court of Buffalo county against Pickering alone, under section 7 of article 11 of the constitution, to enforce the liability imposed by said section upon stockholders in banking corporations. A general demurrer to the petition was sustained by the county court, and on error proceedings this judgment was reversed by the district court, and the cause was retained for trial therein. Subsequently plaintiff filed a petition similar to the one in the county court, which the defendant answered, denying part of the averment contained therein, and pleading certain matters in defense; among others, that there are various creditors of said bank, to the defendant unknown, and also a large number of stockholders of said corporation, giving the names of the latter, with the number of shares of stock owned by each; that one Henry Gibbons was by this court, in February, 1892, appointed receiver of said bank, who qualified as such, and entered upon the duties of his trust, and as such receiver took possession of all the assets of said bank, which were ample to pay plaintiff's claim, and still retains possession thereof, and, if the execution mentioned in the petition was returned “No property found” it was because all the assets of the bank were at the time in the custody of the receiver, and could not be reached; that plaintiff should have sued on behalf of himself and the other creditors of the bank, and that all the stockholders should have been made parties defendant. To this answer plaintiff replied by a general denial, and the trial upon the issues joined resulted in a judgment in favor of plaintiff for the full amount of his claim against the bank. The defendant has prosecuted error proceeding.

It was stipulated in open court on the trial that plaintiff and the several other persons mentioned in paragraph 6 of the answer were residents of Buffalo county, and stockholders of the Commercial & Savings Bank of Kearney, at the time the bank became indebted to Pickering, as well as when the suit was instituted; and that there were and are numerous creditors of said bank similarly situated with plaintiff, whose claims were due and unpaid. The proper disposition of the case at bar can be based upon but a single ground, and that is whether the action...