74 P. 259 | Kan. | 1903
The opinion of the court was delivered by
Tbe parties to this litigation were stockholders in tbe Lone-star Plaster Company. The Farmers’ National Bank of Salina recovered a judgment against this corporation for $6835.22, upon which an execution was issued and returned nulla bona. The Salina National Bank also recovered a like judgment for $3127.08 upon which an execution was issued and returned nulla bona. Such proceedings were thereafter had in both cases against Mary E. L. Prescott as resulted in the issuance of executions against her as a stockholder for the balance remain
It is claimed that the court erred in overruling the separate demurrers of the defendants to the plaintiff’s petition. The allegations of the petition were in many respects very meager and it seems' not to have been drawn with that fulness and exactness which the na-' ture of the proceeding demanded. However, it is not so entirely wanting in any of the particulars challenged as to be said that it was error to overrule the. demurrers.
The defendants each demanded a jury trial, which was refused, and this is claimed as error. It is strongly urged that this was an action for the recovery of money within the meaning of section 266 of the civil code (Gen. Stat. 1901, §4713), and therefore the parties were entitled to a trial by jury. It was more than an action for contribution; it was brought to determine the insolvency of certain of the stockholders; the non-residence of others, and to have the liabilities of the corporation which had been paid by the plaintiff equitably apportioned between herself and the solvent, resident stockholders, and for a separate judgment against each for his equitable proportion of such liabilities. There is no contractual relation
"The right to contribution between cosureties depends upon principles of equity rather than upon contract. It is well settled that the liability exists, although the sureties are ignorant of each other’s engagement. . . . The equity springs out of the proposition that, when two or more sureties stand in the same relation to a principal, they are entitled equally to all the benefits, and must bear equally all the burdens of the position. In such a case the maxim ‘equality is equity' applies."
In the Encyclopedia of Pleading and Practice, volume 20, page 765, we find the following:
"Where stockholders have been sued on their liabilities for corporate indebtedness, and have paid such indebtedness, their remedy for contribution from the other stockholders for their proportion of the debt can, as a general rule, be enforced in a court of equity only."
The same principle was announced in Easterly v. Barber, 66 N. Y. 433. On page 439 the court said :
"It is claimed that an action at law by a surety for contribution must be against each of the sureties'separately for his proportion, and that no more can be recovered, even where one or more are insolvent. In the latter case, the action must be in equity against all the cosureties for contributions, and, upon proof of the insolvency of one or more of the sureties, the payment of the amount will be adjudged among the solvent parties in due proportion. The principle stated is fully sustained by the authorities. It is thus stated, in Parsons on Contracts (vol. 1, page 34) : ‘At law a surety can recover from his cosurety an*771 aliquot part, calculated upon the whole number, without reference to the insolvency of others of the co-sureties ; but in equity it is otherwise.’ . . .
There seems to be a propriety in the rule that where sureties are called upon to cohtribute, and some of them are insolvent, that all the parties should be brought into court and a decree made upon the equitable principles in reference to the alleged insolvency.
. The action here was not of this character ; nor were all the proper parties before the court. It was clearly an action at law, and in that point of view, as we have seen, the plaintiff could only recover for' one-fourth of the debt for which all the sureties were liable. The distinction between the two classes of actions is recognized by the decisions.”
In an equitable proceeding brought by the creditor of an insolvent corporation against all of the stockholders for the debts of the corporation, the defendants would be liable for their pro rata proportion of the debts, excluding from the computation all insolvent and non-resident stockholders. The creditors of the corporation could not be forced into another jurisdiction to collect their debts against non-resident stockholders while there were stockholders financially responsible and liable within the jurisdiction of the court. In the present case we think the same principle applicable in its fullest extent. The plaintiff’s remedy for contribution is against the resident, solvent stockholders. They cannot force her into another jurisdiction to recover the debt due her. (Security Ins. Co. v. St. Paul Ins. Co., 50 Conn. 233; Acers v. Curtis, 68 Tex. 423, 4 S. W. 551; Liddell v. Wiswell, 59 Vt. 365, 8 Atl. 680; Boardman v. Paige, 11 N. H. 431; Gross v. Davis, 87 Tenn. 226, 11 S. W. 92, 10 Am. St. Rep. 635 ; Easterly v. Barber, 66 N. Y. 433.)
It appears that J. H. Prescott and E. ~W. Dow were either the owners of, or had a lease for, certain lands
It is contended that the land which was turned over by the Prescott estate and Dow at $40,000 was not worth to exceed $12,000 ; that this was all they paid for the stock, and before plaintiff could have contribution she should be charged- for her stock at the same rate the defendants paid. There was some evidence-tending to show that the value of the land did not exceed $12,000. The trial court was asked to make a special finding as to the value of this land at the time it was turned over to the company by the Prescott estate and Dow, which was refused, and this is alleged as error. It is not claimed, and there was no-evidence introduced to show, that the transaction between the Prescott estate and Dow in fixing the price of the land, and the corporation in accepting it at the price and upon the conditions fixed, was fraudulent. If not fraudulent, but in good faith, the refus
The creditor banks offered to give a full release to all stockholders who would pay an amount equal to §8 on each share. Some of the defendants availed themselves of this opportunity and received their release in full. The stockholders who paid contend that by reason of having paid and received this release they are not liable to the plaintiff for contribution. The court in its computation as between the plaintiff and such paying stockholders gave them credit for the amount actually paid, with interest from the date of payment. Thus it will be observed that they were not required to pay more than their equitable proportion of the liabilities of the corporation. All of the stockholders of an insolvent' corporation, as between themselves, are liable for an equitable proportion of the debts of the corporation, based upon the number of shares of stock owned by each, and a release’ purchased from a creditor of the corporation for less than a full payment of all liability will not operate to relieve a stockholder from contribution to one who has paid more, except to the extent of the amount actually credited on the judgment by reason of such payment. The basis of computation thus adopted by the court was an equitable apportionment of the liabilities of the corporation between stockholders. Of this no complaint can be justly made.
There are some other questions presented in the argument by plaintiffs in error, but upon an examination we do not find that any error was committed.
The judgment of the court below is affirmed.
