Plumb v. Bank of Enterprise

• Decision Date: 09 April 1892
• Citation: 48 Kan. 484,29 P. 699
• Parties: CARRIE S. PLUMB, as Executrix of the estate of P. B. Plumb, deceased, et al., v. THE BANK OF ENTERPRISE
• Court: Kansas Supreme Court

29 P. 699

48 Kan. 484

CARRIE S. PLUMB, as Executrix of the estate of P. B. Plumb, deceased, et al., v. THE BANK OF ENTERPRISE

Supreme Court of Kansas

April 9, 1892

Error from Dickinson District Court.

THE opinion states the nature of the action and the material facts. Judgment for the plaintiff Bank at the May term, 1889. The defendant, Plumb, brings the case to this court.

Judgment affirmed.

T. N Sedgwick, for plaintiffs in error.

John H Mahan, for defendant in error.

JOHNSTON J. All the Justices concurring.

OPINION

JOHNSTON, J.:

This was a proceeding to enforce the individual liability of the several stockholders of the Kansas Harvester Company, a corporation organized under the laws of Kansas. On October 12, 1888, the Bank of Enterprise recovered a judgment against the Kansas Harvester Company for $ 1,339.06, and execution was at once issued upon the judgment, and the return of the same, made October 23, 1888, disclosed the fact that the company had no property whereon to levy, and was in fact insolvent. Steps were then taken to obtain an execution against the property of Preston B. Plumb and other stockholders of the Kansas Harvester Company, and upon a hearing had on July 2, 1889, it was found that at the time of the rendition of the judgment against the corporation Preston B. Plumb held stock of the corporation in the sum of $ 1,350, which was fully paid up, and that he was liable to the bank upon the stock for the full sum of $ 1,350, and execution was accordingly authorized to be issued against the property of Plumb. Exceptions were taken to the findings and order of the court, and P. B. Plumb having departed this life since proceedings in error were begun, upon the consent of parties an order of revivor has been made, by which Carrie S. Plumb, executrix, and Amos H. Plumb, executor, of the estate of P. B. Plumb, deceased, have become plaintiffs in error.

The questions presented for review are few and easily solved. It is conceded that P. B. Plumb purchased the stock of the corporation, as claimed, and his individual liability to the extent of the stock held by him is not denied, providing he did not divest himself of liability by a transfer of the stock before the judgment was obtained. It was shown upon the hearing that certificates in the corporation were issued to P. B. Plumb, which he held until April or May, 1888, when he assigned and delivered the certificates of stock to Richard A. Elmer, of New York, who was then solvent and abundantly able to meet any liability that could arise against him as a stockholder in the Kansas Harvester Company. No transfer of the shares of stock was made upon the books of the company, nor does it appear that any effort was made to secure a transfer. Does the mere assignment of stock certificates transfer the stock and divest the assignor of individual liability thereon to creditors? The statute respecting the transfer of corporate stock is as follows:

"The stock of any corporation created under this act shall be deemed personal estate, and shall be transferred only on the books of the corporation, in such manner as the by-laws may prescribe; and no person shall, at any election, be entitled to vote on any stock, unless the same shall have been standing in the name of the person so claiming to vote, upon the books of the corporation, at least 30 days prior to such election; but no shares shall be transferred until all previous assessments thereon shall be fully paid." (Gen. Stat. of 1889, P 1184.)

Under this provision, the mere assignment and delivery of the certificates of stock is ineffectual to a valid transfer of the same. (Manufacturing Co. v. Hale, 39 Kan. 23.) It may be sufficient as between the transferer and the transferee, and also as against the corporation itself, if it had notice of such assignment and delivery; but such irregular transfer does not divest the...