Runner v. Dwiggins

• Decision Date: 11 March 1897
• Citation: 147 Ind. 238,46 N.E. 580
• Parties: RUNNER v. DWIGGINS.
• Court: Indiana Supreme Court

147 Ind. 238

46 N.E. 580

RUNNER

v.DWIGGINS.

Supreme Court of Indiana.

March 11, 1897.

Appeal from circuit court, Lake county; J. H. Gillett, Judge.

Action by Morton E. Runner, assignee of the Commercial Bank of Oxford, Ind., for the benefit of creditors, against Robert S. Dwiggins. There was judgment for defendant on demurrer sustained to the complaint, and plaintiff appeals. Affirmed.Alds & Griffin, Geo. P. Haywood, and Chas. A. Burnett, for appellant. Simon P. Thompson, Frank Foltz, H. R. Kurrie, and Elliott & Elliott, for appellee.

JORDAN, C. J.

The Commercial Bank of Oxford, Ind., is a bank of discount and deposit, organized and incorporated under the statutes of this state. Rev. St. 1894, § 2921 (Rev. St. 1881, § 2684). On the 19th day of May, 1893, being in an insolvent condition, it made a voluntary assignment to appellant under the statutes, authorizing an embarrassed debtor to make a general assignment of all his property in trust for all of his bona fide creditors. Appellee is one of the stockholders of the insolvent bank, and this action was instituted to recover $5,000 by appellant as such assignee, upon the statutory liability of appellee existing under section 2933, Rev. St. 1894 (section 2696, Rev. St. 1881), being section 13 of the act pertaining to the incorporation of banks, as amended by an act approved March 9, 1895 (page 202). This section provides that the shareholders of such associations shall be individually responsible to an amount over and above their stock equal to the par value of their respective shares, for all debts or liabilities of the association. Appellee demurred to the complaint, upon the grounds, among others, that appellant had not the legal capacity to sue, and for insufficiency of facts. The demurrer was sustained, and judgment was rendered in favor of appellee.

The principal question presented for our determination is that of the right of appellant, as the assignee of the insolvent banking association, to sue for and enforce against appellee the liability under the statute as a shareholder. The learned counsel for appellant insist that this right is vested in the latter. They cite, however, no statute, nor are we aware of any, that expressly confers upon an assignee of an insolvent corporation the right to enforce such a liability against its stockholders. Section 2899, Rev. St. 1894 (section 2662, Rev. St. 1881), relating to assignments by failing debtors, provides that “any debtor * * * in embarrassed or failing circumstances may make a general assignment of all of his property,” etc. Section 2908, Rev. St. 1894 (section 2671, Rev. St. 1881), provides that “the trustee shall proceed to collect the rights and credits of the assignor,” etc. Certainly, it cannot be asserted with any reasonable support that this peculiar liability imposed by the statute upon those who became shareholders of a banking association organized under the existing law is in any sense an asset, right, or interest of the bank, which it, as an insolvent debtor, can, by its deed of assignment, pass to its assignee, or in any manner vest the enforcement thereof in him. In the absence of some statutory provision conferring the right, neither the corporation nor its assignee nor receiver can enforce such a liability as that in question. The statute creating the liability against the stockholders was enacted for the benefit of the creditors of the bank, and it is these creditors, when the right of action accrues, that are authorized, under our present statutes, to maintain the action. This doctrine is affirmed and settled by many authorities. See Wallace v. Milligan, 110 Ind. 498, 11 N. E. 599;Ewing v. Stultz, 9 Ind. App. 1, 36 N. E. 170;Jacobson v. Allen, 12 Fed. 454;Wright v. McCormack, 17 Ohio St. 86; Umstead v. Buskirk, Id. 113; Association v. Watkins, 70 Mo. 13;In re People's Live-Stock Ins. Co., 56 Minn. 180, 57 N. W. 468;Pfohl v. Simpson, 74 N. Y. 137;Farnsworth v. Wood, 91 N. Y. 308;Wincock v. Turpin, 96 Ill. 135; Dutcher v. Bank, 12 Blatchf. 435, Fed. Cas. No. 4,203; Lane v. Morris, 8 Ga. 468; Elliott, R. R. §§ 185-187; Mor. Priv. Corp. § 869; Thomp. Corp. § 3560; Taylor, Priv. Corp. § 721; Cook, Stock. & S. § 216; Paper Co. v. Swinburne (Minn.) 69 N. W. 144. Mr. Morawetz, in the section of his work above cited, says: “A provision of this character does not increase the capital or pecuniary resources of a corporation, except indirectly, by increasing its commercial credit. Its object is merely to provide a security for creditors in addition to the security furnished by the company's capital. The liability assumed by the shareholders is solely for the benefit of the company's creditors. The corporation and its officers and agents cannot dispose of or control it in any manner. They cannot collect it by an assessment upon the shareholders; nor can they assign it to a trustee for the benefit of creditors, though the corporation be insolvent.” Judge Thompson, in his Commentaries on Corporations, in the...