Thomas v. The Remington Paper Company

• Decision Date: 10 October 1903
• Docket Number: 13,1298
• Citation: 73 P. 909,67 Kan. 599
• Parties: R. L. THOMAS v. THE REMINGTON PAPER COMPANY
• Court: Kansas Supreme Court

73 P. 909

67 Kan. 599

R. L. THOMAS v. THE REMINGTON PAPER COMPANY

No. 13,1298

Supreme Court of Kansas

October 10, 1903

Decided July, 1903.

Error from Shawnee district court; Z. T. HAZEN, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. CORPORATIONS--Liability of Stockholders--Election of Remedies. Where a creditor placed in judgment a claim against a corporation, and upon an execution's being issued thereon and returned unsatisfied instituted an action against a stockholder to charge him with the amount of the judgment, under paragraph 1192, General Statutes of 1889, the reversal of such judgment destroyed the effect of such act as an election of remedies, and left the plaintiff free to pursue the stockholder under paragraph 1204, General Statutes of 1889, which authorized a suit against a stockholder upon a corporate debt whenever the corporation had suspended business for more than one year.

2. CORPORATIONS--Effect of Placing Notes in Judgment. Where a creditor of a corporation sued a stockholder under paragraph 1204, General Statutes of 1889, and while such action was pending the original claim (based on a number of notes) was placed in judgment against the corporation, which fact was pleaded by the defendant stockholder in a supplemental answer, the merger of the notes in the judgment did not prevent a recovery in such action.

3. CORPORATIONS--Foreign--Act of 1901 Construed. In order to invoke the application against a foreign corporation of the provision of section 1283, General Statutes of 1901 forbidding the bringing of an action by a corporation without first filing certain statements, it must be shown that the corporation in question is one doing business in this state.

Welch & Welch, and T. W. Harrison, for plaintiff in error.

Quinton & Quinton, for defendant in error.

MASON J. All the Justices concurring.

OPINION

MASON, J.:

On December 20, 1897, the Remington Paper Company recovered a judgment in the district court of Shawnee county against the Topeka Capital Company, a Kansas corporation, upon nine promissory notes. The defendant appealed but gave no stay bond. An execution was issued and returned nulla bona. In August, 1898, the plaintiff began an action against R. L. Thomas, as a stockholder in the defendant corporation, under the provisions of paragraph 1192, General Statutes of 1889 (now repealed), providing that, when execution is issued upon a judgment against a corporation and no property can be found upon which to levy, an execution may be allowed against a stockholder upon due notice and hearing, or an action may be brought to charge the stockholder with the amount of the judgment. On June 10, 1899, and while such action was pending and undetermined, the judgment was reversed. (Capital Co. v. Remington, 61 Kan. 1, 57 P. 504.) On October 27, 1899, the Remington company began the present proceeding against Thomas, under paragraphs 1200 and 1204, General Statutes of 1889 (also now repealed), upon the same nine notes, alleging that the Capital corporation had suspended business for more than one year, and that Thomas was a stockholder, and as such liable for the payment of plaintiff's claim. Paragraph 1204 provided that upon the dissolution of a corporation suit might be brought against a stockholder on a corporate debt, and paragraph 1200 provided that for the purpose of enabling creditors to bring such suits the corporation should be deemed to be dissolved whenever it had suspended business for more than one year. On May 3, 1900, judgment was rendered by the district court for the plaintiff in the action of the Remington company against the Capital company. This fact was brought upon the record in this case by being pleaded in a supplemental answer. Upon a trial a verdict was returned for plaintiff, upon which judgment was rendered, which the defendant now seeks to reverse.

The principal contentions of plaintiff in error, presented under various specifications, are (1) that by instituting the proceeding to enforce the judgment of December 20, 1897, under the provisions of said paragraph 1192, plaintiff elected to pursue such method to the exclusion of that by action upon the original claim, based upon the fact that the corporation had ceased business for a year; and (2) that no recovery could be had in the present proceeding because it was based upon the notes, and these were merged in the judgment of May 3, 1900, and therefore would no longer support an action.

To maintain these positions reliance is chiefly placed upon the case of Remington v. Hudson, 64 Kan. 43, 67 P. 636. There the plaintiff, after obtaining judgment against the corporation, causing an execution to be issued and returned nulla bona , and, instituting a suit to charge a stockholder with the amount of the judgment, sought to amend its pleading so as to convert the proceeding into an action upon the notes against the stockholder, under the statute authorizing such a suit in case of the dissolution of the corporation by the suspension of business for a year. It was held that this change could not be made. In the opinion it was said:

"It is plain to be seen that the pleader stated different grounds of recovery, and the two remedies which he sought were based on entirely different rights. They were dissimilar and inconsistent, and being based on repugnant theories, the election of one of them is necessarily a bar to the subsequent adoption of the other. (Railway Co. v. Henrie, 63 Kan. 330, 65 P. 665.)

"Apart from the consideration that the election of one of two remedies predicated upon conflicting theories operated as a bar, there was the further matter that the notes set up in the stricken counts had lost their vitality and force because they had become merged in the judgment. When they passed...