173 Iowa 112 | Iowa | 1915
“Art. XY. Liens. This association shall have a lien on the shares of each shareholder for any sum due it from said shareholder, either on account of the subscription to its stocks or for money loaned by the association to said shareholder, or for any other indebtedness due from the shareholder. No stock shall be transferred unless all debts due the association are first paid, except that in the sale of property upon which the association has a mortgage, the stock may be transferred to a purchaser, provided that there are no other claims due the association.”
If the law on the point is in such state as that the word “debt” in the article means “debt”, in strictness, then appellee had the right to treat the language as meaning that, and may now object to a different interpretation. If the law is clearly against the construction insisted’ on by appellee, he must now suffer an interpretation opposed to his. If the state of the law does not, with decisive force, give one construction preference .over the other, it is for us to determine whether appellee has adopted that interpretation which is the reasonable one in the absence of preponderating law.
2.
As a general proposition, the term “debt” is applied to a sum of money due under certain and express agreement. Detroit Post & Tribune Co. v. Reilly, (Mich.) 9 N. W. 492; 8 Am. & Eng. Encyc. (2d Ed.), 986; Hill v. Bowman, 35 Mich. 191; Bouvier’s Law Dict.; 3 Black. Com. 154; Rodman v. Munson, 13 Barb., (N. Y.) 63, 77; Parker v. Savage, 74 Tenn. 406-408; Finch v. Armstrong, 9 So. Dak. 255; Hotchkiss & Upson Co. v. Union Nat. Bank, 68 Fed. 76. Still speaking generally, debt “looks to contract relations, express or implied”. White v. Green, 105 Iowa 176; Thornburg v. Buck, (Ind.) 41 N. E. 85, 86; Bac. Abr. (Watson v. McNairy, 4 Ky. (1 Bibb.) 356; Melvin v. State, (Cal.) 53 Pac. 416, 419; and it is a money demand for which an action of indebitatus assumpsit will lie. Lindsay v. King, 23 N. C. 403; Dowling v. Stewart, 4 Ill. 195; In re Radway, (U. S.) 20 Fed. Cas. 154-162. A line of authorities holds that, generally, to constitute a debt, there must be a demand “for a sum certain” (Baum v. Tomkin, (Pa.) 1 Atl. 535; In re Adams, 67 How. Prac. (N. Y.) 284, 286 (12 Daly (N. Y.) 454, 457) ; Rhodes v. O’Farrell, 2 Nev. 60, 61) ; and that an uncertain or unliquidated demand, as for damages, is not a debt. Jackson v. Laverty, 31 N. J. Eq. (4 Stew.) 554, 558; Duncan v. Lyon, 3 Johns. Ch. (N. Y.) 357; McElhaney v. Crawford, (Ga.) 22 S. E. 895; Clark v. Nevada Land & Mining Co., 6 Nev. 203, 208; Lindsay v. King, 23 N. C. 401, 403; Dowling v. Stewart, 4 Ill. (3 Scam.) 193, 195; Finch’s case, 9 S. D. 255. That a contingent and unliquidated demand is not a debt is affirmed
A statute that a guardian may, with leave of court, compound a debt or demand owing to the ward does not include an unliquidated claim for damages for a tort on behalf of the ward, where the question is whether a settlement of such a claim by the guardian, if made in good faith, is binding upon the ward. Manion v. Ohio Val. R. Co., (Ky.) 36 S. W. 530, 531. On the other hand, Berson v. Ewing, (Cal.) 23 Pac. 1112, 1114, holds that, in a statute authorizing a partner to act in liquidating, “debt” is synonymous with “claim”, and includes a demand for damages arising from a tort. And as to fundamental provisions against imprisonment for debt, except in cases of fraud, it has been held that a judgment ex delicto is not a debt. Moore v. Green, (N. C.) 21 Am. Rep. 470; Long v. McLean, 88 N. C. 3, 4. And so of taxes or unliquidated claims. Bolden v. Jensen, 69 Fed. 745, 746. These are, however, not controlling, because the very language of the provision indicated, by excepting fraud, that contractual debt only is contemplated. But even as to imprisonment for debt, there is conflict. Stroheim v. Deimel, 77 Fed. 802, 806. As to required statement of debt, the word “debt” is used in strictness, because the purpose of such statements is to advise what credit the corporation is entitled to. The thought is that those who suffer from a tort do not do so from any reliance on the solvency and credit of the corporation, and that, hence, the word as used in such statements does not cover such things as unliquidated claims for a tort. Cable v. McCune, 26 Mo. 371; Cable v. Gaty, 34 Mo. 573; Doolittle v. March, (Neb.) 9 N. W. 54; Esmond v. Bullard, 16 Hun. (N.
For present purposes, it suffices to state merely that other cases hold that, to constitute a debt, the obligation must be due or presently payable; others, that the obligation is not a debt until reduced to judgment.
"We do say in Bailies v. City of Des Moines, 127 Iowa 124, 126, that “a debt is a sum of money due.by certain and express agreement, and originates in or is founded upon contracts express or implied”; but that is purely by way of argument and illustration, the point decided being that the term “debt”, as used in Code Sec. 1311, does not include delinquent taxes in the sense that the statute authorizes a taxpayer to set oif against the assessment of his moneys and credits the unpaid taxes of a previous year as a debt in good faith owing by him. According to Webster v. Seymour, 8 Vt. 135, 139, “debt”, in its more limited sense, is substantially synonymous with “contract”, and in this sense it is more generally used in statutes relating to the execution of process; wherefore, the several acts of Congress exempting soldiers from arrest for any debt or contract do not bestow on a soldier an exemption from arrest for nonpayment of taxes. Lane County v. Oregon, 74 U. S. 71, 80, citing Camden v. Allen, 26 N. J. L. 398, holds that a tax, in its essential characteristics, is not a debt, nor in the nature of a debt, but is an impost levied by authority of government upon its citizens or subjects for the support of the state, — that it is not founded on contract or agreement, but operates in invitum. And Hinchman v. Morris, (W. Va.) 2 S. E. 863, 871, holds that a special tax or assessment is .not an ordinary debt arising out of contract, express or implied, though partaking somewhat of the nature of a debt, and is not a debt within the rule that a debt may be assigned. Lane County v. Oregon, 74 U. S. 71 (7 Wall. 71), is that taxes,
In United States v. Eggleston, 25 Fed. Cas. 979, 981, it is held that the word “debts”, as used in Rev. St., Sec. 3466 (U. S. Comp. St. 1913, 6372), providing that, whenever the estate of a deceased person in the hands of his administrator is insufficient to pay all the debts due the deceased, the debts due the United States shall be first satisfied, does not include taxes and funeral charges. On the other hand, it has been held that “debt”, in an enlarged sense, means a duty to pay on any ground, and in this sense includes a tax; though, in strict technical language, a tax is not a debt. Gilliam Co. v. Wasco Co., (Ore.) 13 Pac. 324. The Supreme Court of the United States decided in Dollar Savings Bank v. United States, 86 U. S. (19 Wall.) 227, that an internal revenue tax was a debt, in the sense that it might be collected by an action at law. And Felker v. Standard Yarn Co., (Mass.) 19 N. E. 220, 221, holds that Pub. St., c. 106, See. 60, providing that the officers of a corporation who knowingly make a false certificate on the condition of the corporation shall be jointly and severally liable for its debts and contracts, should be construed to include a tax duly assessed against the corporation and presently payable.
3.
to be equivalent to “claim” or “demand”. In City Council of Dawson v. Dawson Waterworks Co., (Ga.) 32 S. E. 907, 912, it is Said :
“ It is apparent that the word, when taken in a broad and comprehensive sense, includes any obligation to pay money, or other thing of value, that one is under to another, and arises the very moment that the obligation is undertaken, and continues until discharged by payment.”
In Gray v. Bennett, 44 Mass. (3 Metc.) 522, 526, in defining the legal meaning of the term “debt”, the court said:
“The word ... in its popular sense, includes all that is due to a man under any form of obligation or promise. ’ ’
In Daniels v. Palmer, (Minn.) 42 N. W. 855, 857, Collins, Justice, quoting Lord Coke’s definition, says:
‘ ‘ Debitum signifieth not only debt for which an action of debt doth lie, but here in this ancient act of parliament, it signifieth generally any duty to be yielded or paid.”
Dunsmoor v. Furstenfeldt, (Cal.) 26 Pac. 518, 520, speaking fof itself and authorities cited in New Jersey Ins. Co. v. Meeker, 37 N. J. L. 282, 300, says that, especially as used in statutes, “debt” is any kind of obligation of one man to another. “A debt signifies what one owes. There is always some obligation- that it shall be paid.”
"Webster defines the word “debt” as: “That which is due from one person to another, whether money, goods or services; that which one person is bound to pay to another, or to perform for his benefit; thing owed; obligation; liability.” He defines “indebted”: (1) brought into debt; being under obligation; held to payment or requital; in debt. (2) Placed under obligation for something received, for which restitution or gratitude is due. And “indebtedness”, as “ a state of being indebted”.
“In other words, the word ‘debts’ should be understood and taken in its popular meaning, which is synonymous with ‘claims’'. . . . The word ‘debt’ says Burrill, in his law dictionary, ‘is of large import, including not only debts of record or judgment, and debts by specialty, but also obligations arising under simple contract, to a very wide extent, and in its popular sense, includes all that is due to a man under any form of obligation or promise’.”
That “debt” has not a fixed or invariable signification is illustrated by the following: Bouvier defines it as “ a sum of money due by certain and express agreement”. (See also, to the same effect, 2 Jacob Law Dict. 197, 198.) But Bouvier further says that “ in an enlarged sense the term denotes any kind of just demand”, which latter definition is broad enough to include claims based upon tort as well as contract. State v. Mace, 5 Md. 337; Ex parte Robertson, (Tex.) 11 S. W. 669, hold that fines and penalties are not debts. In re Shaner, (C. C. A.) 39 Fed. 869, holds to the contrary.
“Debt” has been extended to cover moral obligations arising from contracts unenforceable at law (Mayor v. Gill, 31 Md. 375), whether recoverable at law or in equity, and without being limited to a fixed and determinable sum due from one person to another. Snyder v. State, (Wyo.) 40 Pac. 441; Scott v. Neeves, (Wis.) 45 N. W. 421, 423. It includes equitable, as well as legal, debts, and hence the claim of a surviving partner for a balance due him from his deceased partner. Babcock v. Lillis, 4 Bradf. Sur. (N. Y.) 218, 219; Sellis’ case, 4 Abb. Prac. (N. Y.) 272, 273. In Ohio, it is held that an equitable obligation to pay is a debt. Longworth v. Mitchell, 26 O. St. 334; Thompson v. Thompson, 4 O. St. 333, 351. To the contrary is People ex rel. Stephens v. Halsey, 37 N. Y. 344.
4.
Coming to what is somewhat more concrete, we find it
5.
The bankruptcy act provides that “A discharge in bankruptcy shall release a bankrupt from all'of his provable debts except such as . . . were created by his fraud, embezzlement, misappropriation or defalcation while acting as an officer or in any fiduciary capacity”. 30 Stat. L. 550 (Supplement 1912 to Federal Statutes Annotated, Vol. 1, pp. 570, 578).
Construing this, it has been held that in such statutes
On the contrary, it is held in Esmond v. Bullard, 16 Hun. (N. Y.) 65, which was not followed in the Munson case, 56 N. Y. S. 139, that, under the bankruptcy act and other statutes which expressly relate to the proving or payment of debt, a tort was not, strictly speaking, a debt. And In re Baker, 96 Fed. 954, 956, declares that the word “debt”, as found in a bankruptcy act, is used in its legal and limited sense, and not in its popular and enlarged signification; that thus some demands, although in the form of judgments, are held not to be “debts”, within the meaning of that term as used in the acts; and others, though within the letter, are held not to be within the spirit, of those laws; that thus, under the act of 1867, a judgment for a fine was held not to be a debt provable in bankruptcy, and that, under such rule, a judgment in a bastardy proceeding for the maintenance of a child is not a debt.
6.
We cannot agree that Jennings v. Bank of California, (Cal.) 21 Pac. 852, is any authority to the contrary, or, as is-claimed, a holding that the mere acceptance of the certificate, without objection, will not constitute a contract. We find the decision in that ease to be, so far as this case is concerned: first, that a corporation has power to prescribe in a certificate
In Hotchkiss & Upson Co. v. Union Nat. Bank, (C. C. A.) 68 Fed. 76, is left expressly undecided the question whether loss by embezzlement is a debt. In National Bank of the Republic v. Rochester Tumbler Co., (Pa.) 33 Atl. 748, and Commomvealth ex rel. Sproul v. Standard Plate Glass Co., (Pa.) 50 Atl. 1004, the Supreme Court of Pennsylvania holds that a liability so created is a debt, and the debt of a shareholder, in the sense that it is secured by a lien on the shares created by a statute which is, in substance, the same as the article at bar. It is, however, true that* while the Sproul case holds that the defalcation is a breach of the contract of the officer, it mentions that the demand became liquidated before tlie party affected by the lien demanded a transfer of the shares to him. Such difference as this fact may make is considered elsewhere in this opinion.
“A debt is in law an obligation to pay money, and the obligation may arise ex contractu or ex delicto. The obligation may be express ex contractu, or implied quasi ex con
In Goodwyn v. State, (Tex.) 64 S. W. 251, 252, it is held that embezzlement may be the breach of an implied contract; and in Fagnan v. Knox, 66 N. Y. 532 (citing that of Boardman v. Gore, 15 Mass. * 336 [319] ; Administrators of Dumond v. Carpenter, 3 Johns. (N. Y.) 183; and Considere v. Beers, 1 Abb. Ct. App. Dec. (N. Y.) 333), that “An action for money had and received will lie for money obtained by fraud or embezzlement. In all such cases the law implies a promise to pay.”
We said in Johnson v. Butler, 2 Iowa 535, 545, that a judgment recovered for a tort is a debt, and will'be' the basis for attachment proceedings as much as if it was recovered upon a contract. Warner v. Cammack, 37 Iowa 642, is that the liability of a person who obtained money from another by means of false and fraudulent representations in the sale of a patent right is a debt, within the meaning of that word as used even in a remedial statute like the one creating a homestead exemption; and it was accordingly held that the homestead of the person selling the patent, acquired after such sale, but before judgment rendered „in an action to recover damages on account of such fraudulent representations, was liable to such judgment. This case is squarely approved in Stanhope v. Swafford, 77 Iowa 594, at 596. In Walker v. Walker, 117 Iowa 609, at 611, the Warner case and the Stanhope case are treated as authority for the proposition that, if one receives money as agent and converts same to his own use, an indebtedness is thereby created. McElfresh v. Kirkendall, 36 Iowa 224, at 227, is a decision that, where the husband was at common law liable for torts of the wife committed after marriage, and a statute exempts him from liability for her
Again, there is a line of cases that an obligation is not a debt while it is not yet due and payable. Lum v. Steamboat Buckeye, 24 Miss. 565; Trowbridge v. Sickler, 42 Wis. 417,
In one of our own cases (McElfresh v. Kirkendall, 36 Iowa 224, at 227), we state this general rule, arguendo, and so declare that it is only after judgment has been obtained that certain liabilities in tort assume the character of a debt. As said, this is merely argument in a case wherein the real holding is that the legislature has, by statute, declared that certain liabilities in tort shall not be treated as a debt. In Warner v. Cammack, 37 Iowa 642, at 644, we limit the rule requiring judgment before turning a wrong into a debt to cases where the wrong done results in no pecuniary advantage to the wrongdoer and hold expressly that, before judgment, a wrongdoer may be treated as liable on an implied contract to repay, if the wrong done by him, is of pecuniary advantage to him.
The article relied On by appellant created a mere lien “for any sum due it”; it palpably contemplates a lien for future as well as present indebtedness. Indeed, it may fáirly be said to contemplate future debt, mainly. For if all intended
In one word, as against' a mere claim for a lien for such sums as may ultimately be found tó be due, the" authorities which hold that an unliquidated demand or an obligation not due or for an amount not yet made certain is not a debt, have no application. This makes it immaterial whether the association had or had not a debt, ipso facto, because of the fact of the embezzlement. In any view, if it had a lien for the consequence of this embezzlement prior in point of time to that of appellee, the court should have declared that said lien had priority, and, at the utmost, have refused present enforcement until the demand had been turned into a debt. That at the hearing this had not yet been done was not, of itself alone, a justification for declaring the lien of the association to be inferior to that of the appellant, and all that we say as to future debt is merely argument for our decision, which is
The case of Des Moines Loan & Trust Co. v. Des Moines National Bank, 97 Iowa 668, is not against this. It is a decision that, where a proposing lender advises the corporation that he was going to make a loan on the shares, and is not informed that any lien is claimed, the mere fact that the formal notice required by Code See. 1626 is not given will not permit the corporation to defeat the loan made, with its lien, — • in other words, that the corporation estopped itself to assert its lien. It is held, further, that,, where the corporation has not reserved any lien on stocks for the -indebtedness due from a stockholder, it does not acquire priority over such pledgee of such stock by taking a subsequent assignment thereof, even though the first transfer by way of pledge is not entered on the transfer book; that in such case the second assignment to the corporation entitled it only to the surplus after satisfying the claim of the pledgee under the-first assignment. We do not see what application Farmers’ & Merchants’ Bank v. Wood, 143 Iowa 635, and Tierney v. Ledden, 143 Iowa 286, have on appellee’s contention as to the effect of Sec. 1626.
As we understand it, the only differentiation, which appellee attempts of the pronouncements of the Supreme Court of Pennsylvania on the exact question is that the writing interpreted there was a statute, and that the demand involved there had been liquidated before the controversy arose. We have said enough heretofore to indicate why we think these are distinctions which do not create a difference. Unfortunately, there is that about said decisions of the Su-' preme Court of Pennsylvania which, while it presents no differentiation between the Pennsylvania cases and this one, does greatly detract from the value of said decisions as a guide here. The court ruled that an embezzlement by an officer of the corporation was a debt, within a statute substantially worded as is the by-law at bar. We so hold here. But, as said before, proving that Boehmler was indebted to the association does not prove that his debt was within the language of the article. As the Supreme Court of Pennsylvania found that the embezzlement of the officer created a debt secured by
We may assume, for the sake of argument, that the words “or for any other indebtedness due from the shareholder”, following a provision that there shall be a lien for what is due from the shareholder “either on account of the subscription to its stocks, or for money loaned by the association to said shareholder”, are ejusdem generis, and the words limited to something which belongs to the enumerated class whose enumeration the broader clause follows. But then comes a distinct contingency which makes no reference ‘to subscription, or borrowing, but which undertakes to deal with nothing but transfer, and to provide as to “all debts due” in case of transfer. Ejusdem generis certainly has no application to this. The phases of the agreement dealing with subscription and borrowing have been disposed of; they are not again
In this connection,- appellee presents that the effect of Code See. 1626 is to take this case out of the reasoning of the Pennsylvania ease. It is true that this statute enables one who loans with the shares as collateral to effectuate sufficient transfer for his purposes, although the stock be not actually transferred on the books of the corporation as is necessary between buyer and seller, by giving notice to the corporation of the loan and the taking of collateral. But we think it clear, and believe we have demonstrated, that, while the notice under this statute operates as a transfer for the purpose of the loan, this does no more than to advise the corporation that its lien on the shares will, as to any indebtedness permitted or arising after the loan, be junior to the claim of which the corporation has been notified.
Whatever, then, may be said as to some parts of the article, we think it clear, and all we decide on this head is, that, in this contest for priority between the corporation and this transferee, the lien of the corporation, if confined to what was due it from the shareholder before the loan was made by the transferee, is superior to' the lien of the latter.
We do not overlook that this impairs the availability of stocks as collateral security. We may not remedy this by refusing to effectuate whatever is the fair construction, of the agreement made. The remedy lies with the parties, or in obtaining an assurance from the corporation that will work an estoppel, or in legislative action.
2.
12. Corporations: ration^- articles ■ construction, "We are the better satisfied with the conclusion that we have reached because, as it seems to us, any other would be more of a play upon words than an analytical decision. In essence, the situation does not differ from ^hat it would have been, had there been a contract reciting that one John Jones was a shareholder, and that, if he became indebted to the corporation, it should have a lien upon his shares. We think that the language employed is, in effect, a matter of identification; that the spirit of the agreement is to give a lien upon the shares of any who are shareholders; that the word “shareholder” defines the class who agree to the lien; and that, upon a showing that the debtor to the corporation is of that class, it becomes immaterial whether the debt rests upon one act of the one within the class, or upon some other act of the same person. If Boehmler is of the class as to which it is
DIVISION II.
The appellee was himself a stockholder and, no matter what the pass book did or did not say as to by-laws, was bound to know what the by-laws in truth were — to take note of any amendments; and he had the power, by going to the record, to find out at any time what any valid by-law was, because, unless of record, it would not be valid. To put it another way, he was charged with every provision of the arti
There is, at most, no more than the possibility of drawing an inference from the reports of the examiner that Boehmler was not indebted to the association. From the earliest days of the law, however, an estoppel m pais may not be thus predicated, and the statement of Lord Coke, that ‘ ‘ every estoppel because it concludeth a man to allege the truth must be cer
In our opinion, the decree must be — Reversed.