279 N.W. 350 | Neb. | 1938
This is a suit to enforce liability against holders of stock in a failed corporation for failure to publish notice of indebtedness as required by section 24-213, Comp. St. 1929. It never reached the trial stage. To state the facts concisely is difficult because the transcript alone, on which the questions of law arise, consists of 386 pages.
The suit was begun by a petition in equity filed May 24, 1934, by Oscar A. Hoffman, alleging himself to be a creditor, for himself and for all other creditors similarly situated, of the Globe Delivery Company, a corporation, against stockholders of the Globe Delivery Company, on their statutory liability as such stockholders. The petition alleged that the corporation had been put through bankruptcy and had no funds or property except $5,176.33 with which to pay the proved and listed creditors $21,859.54, the debt due them. Plaintiff alleged that the debt due him was $2,867.29 and his dividend in the bankruptcy proceeding was $678.97, leaving a balance of $2,188.32 still due him; that plaintiff became a creditor on or about March 10, 1923, by accepting a series of notes, one of which fell due each month; that the company paid to apply upon plaintiff’s
May 28, 1934, Ida M. Hoffman and Charles F. Hoffman filed their , petition of intervention and set up their claims as creditors on the same grounds as plaintiff; that is, that they held notes of Globe Delivery Company.
Defendants moved to make the petition more definite and certain by stating the nature of the consideration given by Globe Delivery Company in exchange for the notes alleged to have been taken by plaintiff. Likewise defendants moved to make the petition of intervention, which had set up notes of Globe Delivery Company as the basis of the debt to interveners, more definite and certain. Both motions were sustained and, in his amended petition, plaintiff, and, in their amended petitions of intervention, Ida M. Hoffman and Charles F. Hoffman, pleaded that the considerations for the notes held by them had their inception in the purchase of stock of Globe Delivery Company in 1919. Both plaintiff and interveners exchanged this stock for notes of the company in 1923.
Defendants filed demurrers to the amended petition of plaintiff and to the amended petition of intervention on the ground that they did not state causes of action; and these demurrers were sustained.
Thereupon plaintiff filed his second amended petition in which he alleged that he brings this action for himself and all other creditors similarly situated, a list of whom he attaches; that between February 1 and June 1, 1919, .he purchased 50 shares of the capital stock of Globe Delivery Company for $5,000; that the company used false representations and deceit to accomplish the sale and he did not discover that the representations were false until about March 10, 1923, whereupon the company admitted
Defendants demurred to these second amended petitions of plaintiff and of interveners and on January 14, 1936, the demurrers were sustained.
In December, 1936, plaintiff and interveners filed their third amended petitions, in which they entirely omitted to state ownership of the capital stock of the company during years when failure of the company to publish notice of indebtedness was the basis of penal liability to them and they all merely alleged the same amounts of indebtedness of the company as previously alleged in their original pleadings.
On March 30, 1937, defendants moved to strike from the files the third amended petitions of plaintiff and of interveners and to dismiss the action on grounds which
Plaintiff Hoffman and interveners Hoffman appealed. They did not appeal from any prior rulings relating to their original petitions or to their first amended petitions or their second amended petitions, but from the action of the court in striking their third amended petitions from the files and dismissing their causes of action.
Appellants assign that the district court erred (1) in sustaining the demurrers of defendants to the second
“In general a plaintiff • waives error in sustaining a demurrer to his petition by filing an amended petition.” Wheeler v. Barker, 51 Neb. 846, 71 N. W. 750. So this is authoritative precedent for the error alleged in sustaining the demurrer to the second amended petition. By pleading over and setting up a cause of action in their third amended petitions, plaintiff and interveners waived any possibility of asserting error in the sustaining by the district court of a demurrer to their second amended petitions. If that is what they wanted to do they should have stood on their second amended petitions and, by refusing to plead further, it would have been the duty of the district court then to dismiss their petitions and thereby to cause a final order to be entered from which they could have appealed. But; instead of thus obtaining a final order from which they might appeal, they waived that chance by pleading over. This answers in the negative the first assignment of error.
The liability of a stockholder for the debts of a corporation following a failure to publish annually the existing debts of a corporation, as required by section 24-213, Comp. St. 1929, is penal in its nature and will be strictly construed. Thomas v. Scoutt, 115 Neb. 848, 215 N. W. 140; Bourne v. Baer, 107 Neb. 255, 185 N. W. 408; Singhaus v. Piper, 103 Neb. 493, 172 N. W. 523; Kleckner v. Turk, 45 Neb. 176, 63 N. W. 469.
In their amended ' petitions plaintiff and interveners had disclosed that from 1919 to 1923 they held stock in Globe Delivery Company. During that period some, at least, of the indebtedness of the company was incurred. In Singhaus v. Piper, supra, the law, as declared in the first point of the syllabus, is as follows:
“The‘liability of a stockholder in a corporation for failure of the corporation to publish notice of indebtedness required by section 577, Rev. St. 1913 (now section 24-213, Comp. St. 1929) is in the nature of a penalty for neglect of
It was probably on account of that fact, pleaded by plaintiff and interveners in their first amended petitions, that the district court sustained demurrers to those petitions. That fact once disclosed to the court on solemn oath of plaintiff and interveners could not be forgotten or overlooked by the court when the same parties later filed their third amended petitions. The demurrers of defendants searched the whole record.
So, when the court was considering the evasive and concealing manner in which plaintiff and these interveners sought to circumvent prior rulings of the court in their third amended petitions, it held that those petitions should be stricken from the record. The district court found authoritative precedent in this court for dismissing the petitions of plaintiff and interveners in Ferson v. Armour & Co., 109 Neb. 648, 192 N. W. 125, where we said:
“A court of general jurisdiction has inherent power to protect itself, litigants and the public from vexatious proceedings by dismissing with prejudice suits instituted by plaintiffs who repeatedly violate the rules of pleading and the orders relating thereto, after having had a full opportunity to present litigable controversies in proper form.”
What we have said disposes of the appeal of plaintiff and interveners. We turn now to the creditor-appellants.
The petitions of the plaintiff Hoffman and of the interveners Hoffman alleged that they were suing for themselves and all similarly situated. In that respect they set out the names of 43 creditors, other than themselves, and the amounts for which claims in favor of those creditors had been respectively adjudicated in the bankruptcy proceedings. Nine of these creditors, who were pure creditors, and had not been stockholders of Globe Delivery Company (as the Hoffmans had), with leave of court, intervened on April 10, 1935. Each pleaded its claim, set forth the lists
These nine petitions of intervention were demurred to on the ground that they showed on their faces that they were barred by the .statute of limitations. The demurrers were sustained and these nine creditors filed amended petitions on May 1, 1936. There was filed a motion to strike these amended petitions from the files and it was sustained. Then these creditor-interveners asked leave to file second amended petitions, which applications were denied April 27, 1937, to which the parties excepted. In the same order, third amended petitions of plaintiff Hoffman and of interveners Hoffman were stricken and they elected to stand on their pleadings, and on the same day filed written notice of appeal.
These creditor-interveners designate themselves as cross-appellants, and the substance of their assignments of error is that the court erred in striking their amended petitions from the files and in dismissing their causes of action.
We are not favored with any expression from the trial court as to the reason for not leaving these “pure creditors” in the case. None of them are shown to have ever been stockholders and therefore estopped to sue the stockholders on their stockholder’s liability. Each of these interveners was apparently in the case in good faith. Each had filed a petition in intervention rather fully setting forth what was intended to be a statement of the facts entitling him to recover from the stockholder defendants. If he had a right to be and continue in the case, and if he had not stated properly a cause of action in his amended petition, it would seem that he had a right to file a second amended petition, which was denied him.
The first reason assigned by the brief of appellees arguing that we have no jurisdiction over the subject-matter of the case of these nine creditors is that no proper, praecipe has been filed so as to appeal for them to this court. The praecipe filed in this court in the title describes the interveners as such, but in the connected directions to the clerk
Section 20-328, Comp. St. 1929, provided the right to these parties to intervene. They had a vital interest in the matter in litigation, which was the recovery of stockholders’ liability for failure to publish debts of the corporation, from year to year, when they as creditors were extending credit and the debts to them had not been paid by the corporation. They had the right to a trial of the issues on the facts. Of this the record before us indicates they have been deprived.
While appellees have not argued that the statute of limitations has run against the creditor-interveners so as to prevent their actions to enforce stockholders’ double liability under section 24-213, Comp. St. 1929, it may be desirable to make brief mention of that subject here. The point was carefully considered by the circuit court of appeals in an appeal from the district court of the United States for the district of Nebraska, and the statute was carefully analyzed, in a case very similar to the one at bar. The court considered the meaning of the words “first exhausted” and held: “As regards limitation for suing under' stockholders’ double liability statute, corporate assets in course of administration before receiver, on assignment for benefit of creditors, or in bankruptcy, are not ‘exhausted’ until final dividend is paid to creditors and fact
Without taking further space, we think the conclusion of that court of such high authority is sufficient to hold that the statute of limitations has not run in the case at bar. For, as shown in the statement of facts, the petitions of creditor-interveners were filed by them here within a very short time after the bankruptcy dividends were declared and shortly after the dividends were paid to these respective creditors.
We have contented ourselves by discussing the vital matters suggested by the briefs of appellees, and are of the opinion the case should be sent back to be tried on the nine petitions of these creditors, subject to the rules discussed in the opinion.
We affirm the judgment of the district court as to Hoffman, plaintiff, and interveners Hoffman, and reverse the judgment and remand the cause for further proceedings as to the other nine creditor-interveners, in accordance with this opinion.
Affirmed in part and reversed in part.