State Sav. Ass'n v. Kellogg

• Decision Date: 31 October 1876
• Citation: 63 Mo. 540
• Parties: STATE SAVINGS ASSOCIATION, Appellant, v. SANFORD B. KELLOGG, et al., Respondents.
• Court: Missouri Supreme Court

63 Mo. 540

STATE SAVINGS ASSOCIATION, Appellant,

v.SANFORD B. KELLOGG, et al., Respondents.

Supreme Court of Missouri.

October Term, 1876.

Appeal from St. Louis Circuit Court.

Noble & Orrick, for Appellant, cited in argument: Garrison vs. Howe, 17 N. Y. 458; Butler vs. Cole, 43 Me. 401; Rev. Stat., Me., 1857, 328, §§ 24, 25; Ingalls vs. Cole, 47 Me. 541; Ang. & Am. Corp. [9 ed.], pp. 607-609, et seq.

Glover & Shepley, for Respondents, contended that Cole vs. Butler (42 Me. 403) and Ingalls vs. Cole (47 Me. 530) were made under statutes differing essentially from the statutes of Missouri, and afforded no evidence that the conclusions claimed by appellant would be reached even by that court under our statutes and system of law, and that the measure of the stockholder's liability was settled by Perry vs. Turner (55 Mo. 423).

NAPTON, Judge, delivered the opinion of the court.

This suit was brought in 1869, against the defendants, as stockholders of a private corporation called the Southwestern Freight and Cotton Press Company, incorporated under the general corporation law of 1865.

The petition averred an indebtedness of the corporation to the plaintiff, growing out of certain bills of exchange drawn by said company, and negotiated by said company with plaintiff, amounting to upwards of eight thousand dollars, and that the company was totally insolvent and bankrupt in June 1869, and had been so adjudged in a proceeding in bankruptcy before the district court of the United States, and was thereby virtually dissolved; and that the defendants held certain shares of stock to an amount specified, and that by force of the statute in such case made, an action had accrued to plaintiff for the sum so owing.

The answer of the defendants denied the liability of the defendants, and denied that the corporation was dissolved, and upon a judgment in favor of the defendants, an appeal was taken to this court and the judgment reversed.

The only question examined and decided in this case (52 Mo. 587) was, that the admitted insolvency of the corporation amounted to such a dissolution as authorized a suit against the stockholders.

Upon the reversal of the judgment the defendants filed separate answers, denying the indebtedness of the company, and more specifically setting up as a defense, that a suit was commenced against the defendant, as a stockholder, by the Franklin Bank of Cincinnati, in 1870, which resulted in a judgment against him for the amount of stock held by him in the corporation, and that he was compelled to pay, and did pay, on said judgment, the full amount of his liability as stockholder.

There was a demurrer to the answer, which was overruled, and judgment went for the defendants, from which an appeal is taken.

There are only two questions presented by the record in this case. The first position of the plaintiff is, that under our statutes (§ 20, ch. 62, p. 330) each stockholder is liable to the creditors of the corporation for the full amount of the company's indebtedness, as in the case of partnerships, without regard to the amount of his stock. This question having been examined and decided in the case of Perry vs. Turner (55 Mo. 424), it is unnecessary to add anything to what was there said.

The next question is based on a concession of a limited liability. It is urged that the institution of a suit operates as a lien on the limited liability of the stockholder, so as to prevent the payment by him, under a prior judgment obtained on a suit commenced subsequently, to the full amount of his liability, from being pleaded in bar of the suit first instituted.

In ordinary actions it is conceded that the institution of a suit created no lien, unless some auxiliary process, which our laws allow in certain contingencies, is resorted to. The first who obtains judgment gets a lien on the real estate of the defendant, and on his personal property from the time of the levy of the execution, without regard to the priority in which actions are commenced. The claim of a lien or priority, then, must be based on, or inferred from, the peculiar provisions of the statute in regard to suits of this character. The provision of the statute is this: “If any company formed under this act dissolve, leaving debts unpaid, suits may be brought against any person or persons who were stockholders at the time of such dissolution, without joining the company in such suit.” It would be very difficult to infer from this that the suits authorized under it were, in any respect, different from any other actions. Nothing is said in...