Rowley v. Pogue
| Decision Date | 24 November 1931 |
| Docket Number | No. 25994.,25994. |
| Citation | 203 Ind. 655,178 N.E. 449 |
| Parties | ROWLEY v. POGUE. |
| Court | Indiana Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Steuben Circuit Court; Wm. P. Endicott, Judge.
Action by Mack Pogue, receiver of the Angola Bank Trust Company, against Frank B. Rowley. From a judgment in favor of plaintiff, defendant appeals. Transferred from the appellate court under Burns' Ann. St. 1926, §§ 1356, 1359.
Affirmed.
Atkinson & Husselman, of Auburn, and H. W. Mountz, of Garrett, for appellant.
Wood & Wood, of Angola, for appellee.
The receiver of the Angola Bank Trust Company brought this action against appellant (who was president and director of the institution) to recover from him the double liability, imposed upon stockholders in banks, upon ten shares of the capital stock thereof.
It appears from the special finding of facts that: The Angola Bank Trust Company, because of its insolvency, was closed by the banking department of the state of Indiana on March 14, 1927. For fifteen years prior thereto it was a corporation duly organized and doing business as a loan, trust, and safe deposit company; the state, on relation of a deputy bank commissioner, filed suit in the Steuben circuit court alleging such insolvency, and praying for the appointment of a receiver, and appellee was appointed receiver and given the usual powers, etc. Appellant on March 14, 1927, “was the owner in his own right of ten shares of the capital stock of said Angola Bank Trust Company of the par value of $1,000.” The company was indebted in the sum of $608,868.80 to depositors and creditors whose claims have been allowed by the court and the receiver (up to Jan. 5, 1929) had collected and realized from the assets $378,244.48. That the remaining assets after deducting losses will produce $63,346.01 (making the total of all available assets $441,590.49), leaving unpaid to creditors $167,278.31. Certain stockholders have paid on their stock assessment or liability $42,068.06, and the receiver has been paid $44,500 in settlement of a suit for damages brought against certain of the directors, and there still remains unpaid and unsatisfied of the indebtedness of the trust company the sum of $80,710.25. The company was capitalized for the sum of $60,000, and the capital stock was fully paid long previous to March 14, 1927. Appellant, although requested to do so, has not paid any sum upon the stock owned by him, and there is due and unpaid from him as the owner of ten shares the sum of $1,000.
The trust company here involved was organized under chapter 161, Acts 1893, p. 344, section 10 of which as amended by section 3, c. 20, Acts 1921, p. 44, being section 3950 Burns' Ann. St. 1926, provides that: “Such corporation shall exercise the powers and possess the privileges conferred on banks by the laws of this state and all powers properly incidental thereto or which may be necessary or usual in carrying on the general business of banking, subject to the restrictions imposed by the laws of this state relative to a general banking business,” etc. It appears from the record that the company carried on a general banking business.
[1][2] “The stockholders in every bank or banking company shall be individually responsible to an amount, over and above their stock, equal to their respective shares of stock, for all debts or liabilities of said bank or banking company.” Section 6, art. 11, Const., section 212, Burns' Ann. St. 1926. This section of the Constitution creates a definitely limited stockholder's liability for the benefit of creditors; such constitutional provision is self-executing, and the liability may be enforced in an action brought either by a creditor or by the receiver under section 4952, Burns' Ann. St. 1926, chapter 189, Acts 1915. Gaiser v. Buck (Ind Sup. 1930) 174 N. E. 83;179 N.E. 1. (The action at bar was brought on December 17, 1927, before section 4822 et seq., Burns' Ann. St. Supp. 1929, c. 215, Acts 1929 became effective.)
It follows that, upon the special findings of fact set out above, the conclusions of law that appellee recover from appellant $1,000 and costs and the judgment in that amount against appellant are correct.
The alleged errors which present the questions decided above were assigned on the action of the court in overruling appellant's demurrer to the second paragraph of complaint and on the conclusions of law. Two other questions are presented: (1) By the assignment that the court erred in sustaining appellee's demurrer to appellant's third paragraph of answer; and (2) by the assignments that the court erred in overruling appellant's demurrer to the first paragraph of complaint, and in sustaining appellee's demurrer to the second paragraph of answer.
[3][4][5] 1. Appellant's third paragraph of answer alleged that, prior to the appointment of the receiver, the trust company had for a long time been insolvent, and, while it was so insolvent, but without any knowledge on appellant's part of that fact, the officers and stockholders solicited him to purchase stock, representing that the company was solvent and the stock reasonably worth its face value; that, relying upon such false representations, appellant agreed to purchase conditionally from a stockholder ten shares of stock, with the right to disaffirm the contract of purchase if an investigation of the business should disclose it was not solvent and the stock not valuable; that thereafter appellant (who was elected as...
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