Skrainka v. Allen

• Decision Date: 31 October 1882
• Parties: SKRAINKA et al., Appellants, v. ALLEN.
• Court: Missouri Supreme Court

76 Mo. 384

SKRAINKA et al., Appellants,

v.ALLEN.

Supreme Court of Missouri.

October Term, 1882.

Appeal from St. Louis Court of Appeals.

REVERSED.

This was a proceeding against defendant, Gerard B. Allen, by motion, under the statute, (1 Wag. Stat., p. 291, § 13,) as a stockholder of the Illinois & St. Louis Bridge Company.

R. E. Rombauer for appellants.

As to the time when the liability of the stockholder became fixed, see Nixon v. Green, 11 Ex. 550; McClaren v. Franciscus, 43 Mo. 453; Miller v. Great Republic, 50 Mo. 55. The opinion of Judge Dillon in Baltimore Bridge Co. v. Illinois & St. Louis Bridge Co., conflicts with these cases, but the construction placed upon a state statute by an inferior federal court will not be entitled to preference here over the construction placed upon the same statute by the court of last resort of the state whose statute is under consideration.

Glover & Shepley for respondent.

McClaren v. Franciscus, 43 Mo. 452; Miller v. Great Republic Ins. Co., 50 Mo. 55, and Prov. Savings Ins. v. Jackson Place Skating Rink, 52 Mo. 557, differ from this case in two essential particulars: 1st, The question at issue there was not at what time the liability attached, but whether the stockholder could avoid the liability from being enforced against him by transferring his stock to a known insolvent person; 2nd, All those cases were cases of double liability and were not cases where it was sought to make a stockholder pay unpaid calls upon his stock. And see State Savings Ass'n v. Kellogg, 63 Mo. 540; Baltimore Bridge Co. v. Illinois & St. Louis Bridge Co., MS. opinion by Dillon, J.

HOUGH, C. J.

On the 12th day of November, 1875, plaintiffs recovered judgment against the Illinois & St. Louis Bridge Company for $10,420.21. Execution was issued on this judgment on November 29th, 1875, which was duly returned nulla bona.

On March 20th, 1878, a motion was filed by the plaintiffs, under the statute, for an execution against the defendant Allen, as a stockholder in said bridge company. At the date of the return of the execution against the bridge company, Allen held 741 shares of stock, at the par value of $100 per share, and at the time when the motion was filed against him, he had sold and transferred all of said stock but twenty-four shares. Two principal defenses were interposed. The first was, that all of the said 741 shares were fully paid for at the date of the return nulla bona; and the second was, that the defendant was, in any event, only liable on the shares held by him at the time the motion for execution against him was filed.

It appears from the record, that the authorized capital stock of the bridge company was $4,000,000, in shares of $100 each; that in the year 1875, $3,000,000 had been subscribed for, on which forty per cent had been paid in cash. First mortgage bonds to the amount of $4,000,000 were issued and directed to be sold under an agreement that $800,000 of the stock of the company should go with the bonds as a bonus. Of these bonds the stockholders took $1,500,000, and received $300,000 in stock. Of this stock, all of which was credited with a payment of forty per cent, which had not been paid, the defendant received seventy-five shares. For this bonus of forty per cent on said seventy-five shares, the circuit court and the court of appeals properly held the defendant liable to the creditors of the corporation. On December 20th, 1871, the stockholders, being of opinion that the unpaid sixty per cent of the stock issued would be required to complete the bridge which the company had undertaken to construct, passed a resolution at a meeting held by them, providing in substance, that calls should be made on the stock from time to time, as money should be required, and that second mortgage bonds of the company should be delivered at their face value, to the stockholders, in an amount equal to the amount of the calls paid by such stockholders, not exceeding in the aggregate the sum of $2,000,000. The board of directors ratified the action of the stockholders, and in pursuance of this arrangement the defendant Allen received in bonds $20,612, from which he realized the sum of $15,904.59.

For this last sum, the circuit court and the court of appeals held the defendant liable as for unpaid stock. For the reasons given by the court of appeals, (7 Mo. App. 434,) we agree with that court in saying that there was no error in this ruling of which the defendant can complain. Sawyer v. Hoag, 17 Wall. 610; Habershon's case, 5 Eq. Law Rep. 289; Hay's case, 10 Chy. App. Law Rep. 600.

The only question remaining for determination is, whether the defendant is to be charged on the stock held by him at the date of the return of nulla bona, or only on that held by him when the motion was filed. The circuit court held the defendant liable to the extent of the unpaid stock held by him at the date of the return of nulla bona, and the court of appeals held him liable to the extent of the unpaid stock held by him when the motion was filed which related in point of time to the service of notice. The statute in force at the date of the nulla bona return, and when the motion was filed, is as follows: “If any execution shall have been issued against the property or effects of a corporation, and if there cannot be found whereon to levy such execution, then such execution may be issued against any of the stockholders to an extent equal in amount to the amount of stock by him or her owned, together with any amount unpaid thereon; provided, always, that no execution shall issue against any stockholder except upon an order of the court in which the action, suit or other proceeding shall have been brought or instituted, made upon motion in open court, after sufficient notice in writing to the persons sought to be charged; and upon such motion, such court may order execution to issue accordingly.” Wag. Stat., 291, § 13.

That portion of the section which authorizes execution for an amount equal to the amount of stock owned by the shareholder, and known as the double liability clause, was annulled by a constitutional amendment adopted in 1870, leaving the stockholder liable simply for any amount unpaid on his stock. Schricker v. Ridings, 65 Mo. 208. The phraseology of the section quoted, however, remained unchanged until the revision of 1879.

By the eighth and ninth Victoria, chapter 16, section 36, it is provided that “if any execution either at law or in equity shall have been issued against the property or effects of the company, and if there cannot be found sufficient whereon to levy such execution, then such execution may be issued against any of the shareholders to the extent of their shares respectively in the capital of the company not then paid up.” That portion of our statute requiring construction at our hands seems to have been taken almost literally from the English statute above quoted. It was first enacted in this State, in its present form, in 1865. In January, 1856, the English statute was construed in the case of Nixon v. Green, 11 Exch. 549. Alderson, B., in delivering the opinion of the court said: “The construction of the act is very plain. It says, that ‘if any execution, etc., shall...