24 Wash. 378 | Wash. | 1901
The opinion of the court was delivered by
This is an action brought by the appellant, as receiver of the Seattle Savings Bank, an insolvent hanking corporation, against the respondents, as stockholders therein, to recover upon their liability created by the constitution and statutes to answer for the debts of the corporation. On the trial, at the conclusion of the appellant’s case, the court granted a motion for non-suit, and entered a judgment dismissing the action. The facts appearing in the record are substantially these: The Seattle Savings Bank was incorporated under the laws of the state of Washington as a hanking corporation in 1891, commencing business as such on July 9th of that year. It continued as a going concern until January 11, 1897, at which time, in an action brought in the superior court of King county, it was adjudged insolvent, and the appellant was appointed its receiver. On the 5th day of April, 1898, the receiver filed a petition in the superior court praying that the court ascertain and determine the amount of the liabilities of the hank, the amount and value of the assets of the hank then in the hands of the receiver and remaining undisposed of,' the amount required in addition thereto to pay the liabilities in full, and to assess the
The learned trial judge ruled that, inasmuch as the respondents were assessed for a proportionate share of the whole debt of the bank, regardless of the length of time they had owned stock therein, or of the amount of the debts and liabilities accruing while they were stockholders, the assessment was void, and therefore insufficient to form a basis for a recovery in an action at law. The respondent urges this proposition upon us here, and contends that this court has, in effect, so determined in the cases of Wilson v. Book, 13 Wash. 679 (43 Pac. 939), and Shuey v. Holmes, 21 Wash. 223 (57 Pac. 818).
The constitutional provision giving rise to the super-added liability of stockholders in a banking corporation is found in § 11, art. 12, of the state constitution, and is in the following language:
“Each stockholder of any banking or insurance corporation or joint stock association shall be individually and personally liable equally and ratably, and not one for another, for all contracts, debts, and engagements of such corporation or association accruing, while they remain such stockholders, to the extent of the amount of their stock therein at the par value thereof, in addition to the amount invested in such shares.”
The statutory enactment on this subject (Ballinger’s Code, §4266) follows substantially the language of the constitution above quoted, and does not more particularly de
“This superadded liability of the stockholder which exists by virtue of the statute and constitution is personal, and does not follow the stock. The obligation rests on the stockholder, not on the stock.”
The latter action was brought by the receiver, who is appellant in this action, against another of the stockholders of the Seattle Savings Bank, to recover upon this same assessment. It was tried upon an agreed statement of facts. Judgment went against the receiver below, and the judgment was affirmed here, because it did not appear from the record “that the whole or any part of the indebtedness of the bank was incurred or created at any time while the respondent was a stockholder of the bank.” In the only other case where this constitutional .provision was directly before this court — the case of Watterson v. Masterson, 15 Wash. 511 (16 Pac. 1041) — we held that a creditor could not maintain an action to enforce this
• Passing, then, to the questions more directly before us, the first inquiry is, what effect shall be given to the order made by the court before which the insolvency proceedings were pending ? It is the contention of the appellant that this order not only conclusively determined the amount necessary to be levied upon the stockholders as a whole to make up the deficiency between the assets of the bank and its liabilities, but 'that it also conclusively determined, against each of the stockholders personally served with notice of the proceeding, the amount for which each of such stockholders was liable; and consequently, in an action brought to enforce the assessment, the stockholder is estopped to question, not only the amount for which all of the stockholders are liable, but also his individual liability for the amount assessed against him. But, if this be true, it would seem there was little need for the present action. • To give the order the force
Why, then, may not a stockholder be charged with his individual share of this liability in an action brought against him by the receiver under the direction of the court having the insolvency proceedings before it? The argument against it is rather one of policy than of strict legal right. It is said that it is extravagant and wasteful, and that it was condemned for this reason by this court in Wilson v. Book, supra. In that case the court did say that, inasmuch as this fund was a trust fund for the benefit of all the creditors of the corporation, it could “be reached only by a proceeding in equity for the benefit of such creditors,” and that, if the right of action was confined to the receiver, the fund would “be subject to the control of
Under this view of the law, the proofs submitted made a prima facie case, and the respondents should have been put upon their defense. Of course, the respondents may take issue upon these proofs. They may show, if they can, that they are not stockholders of the bank, or not stockholders for so large an amount as alleged; they may show a release, a payment, or, in fact any other defense personal to themselves, or either of them; they are es-topped only from questioning such orders made by the court having the insolvency proceedings before it as were within its proper jurisdiction.
One other question remains to be noticed. It is urged
The judgment appealed from is reversed, and the cause remanded for a new trial.
Beavis, C. J., and Dunbar and Anders, JJ., concur.