Buist v. Citizens' Savings Bank
Buist v. Citizens' Savings Bank
Opinion of the Court
This is a proceeding to enforce the individual liability of a stockholder of the Cawker City State Bank, a corporation organized under the laws of Kansas. On October 7, 1891, the Citizens’ Savings Bank of Concordia recovered a judgment in the district court of Mitchell’county against the said Cawker City State Bank for $1,274.- On October 9 an execution was issued on said judgment, which was on October 20 thereafter returned by the sheriff unsatisfied, for the reason, as shown by Ms return, that after diligent search and inquiry he could find no goods, chattels, real estate, lands or tenements of the defendant upon which to levy the execution. On December 2, 1891, this execution was withdrawn from the office of the clerk and on December 9 thereafter was again filed, bearing a similar return to the one previously entered upon it.
On October 6, 1891, the-National Bank of Lebanon recovered a judgment in said court against the same defendant corporation for $2,070, and on October 12 an execution was issued thereon, which was returned unsatisfied on October 15.thereafter, the return of-the sheriff showing that no property, either real or personal, could be found whereon to levy the execution.
George Buist was at the date of the rendition of these judgments, and for moré than a year prior thereto had been, and at the dates hereinafter mentioned still remained, the owner of 20 shares of the capital stock of the said Cawker City State Bank, each share being of the face value of $100. On October 24, 1891, the Bank of Lebanon caused a notice in due form to be served 'upon-Buist that an application would, be made, upon the first day of the January term, 1892, of the district
On November lá, 1891, and again on December 31 thereafter, the Citizens’ Savings Bank of Concordia caused to be served on Buist a written notice that on January 11, 1892, an application would be made to the court for an order directing that an execution issue against his property for the amount of its judgment against the Cawker City State Bank. A hearing was had upon the motion which was subsequently filed. The court found the facts to be as above recited, and held that “the plaintiff being the first judgment creditor to proceed under the statute for execution against the said stockholders after the return day of the execution, he is entitled to preference over all other creditors to the amount of his judgment,” and ordered the issu
Section 2, article 12 of the constitution, provides that:
‘ ‘ Dues from corporations shall be secured by individual liability of the stockholders to an additional amount equal to the stock owned by each stockholder, and such other means as shall be provided by law ; but such individual liabilities shall not apply to railroad corporations, nor corporations for religious or charitable purposes.”
Under this provision of the constitution, the legislature enacted' paragraph 1192, General Statutes 1889, which reads as follows :
“ If any execution shall have been issued against the property or effects of a corporation, except a railway or a religious or charitable corporation, and there cannot be found any property whereon to levy such execution, then 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; but 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 reasonable notice in writing to the person or persons sought to be charged ; and, upon such motion, such court may order execution to issue accordingly; or the plaintiff in the execution may proceed by action to charge the stockholder with the amount of his judgment.”
The statute under which the execution against the Gawker Gity State Bank was issued provides :
“The sheriff or other officer, to whom any writ of execution shall be directed, shall return such writ to the court to which the same is returnable within 6u days from the date thereof.” (Gen. Stat. 1889, ¶4567.)
In construing a statute identical in terms with our own, it was held, in Renaud v. O’Brien, 35 N. Y. 99, that a return by the sheriff before the expiration of the time within which he was required to make it Avas a sufficient basis for a proceeding like this ; that the time alloAved for the return of an execution is for the benefit of the sheriff and to prevent action or compulsory proceedings against him before he has had a reasonable time to execute the process ; that the point beyond which it' would not continue is provided, but that the statute is silent as to hoAV soon he is to be permitted to make the return, and that if the sheriff should, make an honest return that he could find no property of the defendant in his county, or if the defendant should be known to be notoriously insolvent and the sheriff should take the hazard of an early return, no valid objection could be urged thereto. The statute of Minnesota provided that execution should be returned Avithin 60 days. In Manufacturing Co. v. Shatto, 34 Fed. Rep. 380, it was held that, after the return of an execution unsatisfied, supplementary proceedings might be commenced, although 60 days, had not elapsed since the date of the execution. In Guerney v. Moore, 32 S. W. Rep. 1132, the supreme court of Missouri Avas called upon to construe the sections of our statute above quoted, and held that, where an execution upon a judgment against a corporation was returned unsatisfied 19 days after it Avas issued, such return was not premature, and that the contingencies had arisen which Avarranted the bringing of an action to charge the stockholder of the corporation Avith the amount of the judgment.
It appears from the evidence and from the findings
It is also contended that, if it should be held that the return of the officer was sufficient upon which to base proceedings to subject the property of a stockholder to the satisfaction of a judgment against a corporation, as the Bank of Lebanon had first instituted such proceedings, it thereby acquired a priority of right to recover against the plaintiff in error, and as its judgment.exceeded the amount of his liability as a stockholder, the court erred in ordering the issuance of an execution in favor of the defendant in error, before the time allowed by law in which the Bank of Lebanon might institute proceedings in error to reverse the ruling of the court denying its motion for execution had expired; and that, if that ruling should be reversed, and it should be finally determined that the Bank of Lebanon had acquired a prior lien upon the liability of the plaintiff in error as a stockholder, by reason of its greater diligence, in attempting to enforce the payment of its judgment by proceeding against him under the statute, the plaintiff in error might be subjected to the payment of a sum in excess of that prescribed by the constitution and
We think, however, that when ah execution upon a judgment against a Kansas banking corporation has been returned nulla bona, the judgment creditor may at once proceed against any stockholder thereof, under paragraph 1192, General Statutes 1889, even though 60 days may not have elapsed since the date of the execution. The court has ample authority to make any order which may be necessary fully to prptect the interests, not only of the stockholder against whom such proceedings may be instituted, but of the more diligent creditor as well. Simply awarding an execution against a stockholder ‘ ‘ to an extent equal m amount to the amount of stock by him or her owned” does not of itself relieve such stockholder from his liability to other creditors of the corporation, nor prevent them from instituting similar proceedings against him ; and in such case, unless it should appear that there has been a full satisfaction of the stockholder’s liability, either by actual payment or its equivalent, an order for the issuance of an exeution against him may be rightfully entered. Executions might be awarded in favor of the same judgment
As the plaintiff in error has failed to point out any errors of the trial court which operated to his injury, the order directing the issuance of an execution against him will be affirmed.
Reference
- Full Case Name
- George Buist v. The Citizens' Savings Bank of Concordia, Kansas
- Cited By
- 1 case
- Status
- Published