Stewart v. Lay, 45 Iowa 604

Stewart v. Lay

45 Iowa 604 | Iowa | 1877

Lead Opinion

Beck, J.

The demurrer, it will be observed, is directed against the equitable answer only; the sufficiency of the legal defenses pleaded is not questioned.

I. The indebtedness of the corporation in excess of its assets, or to such an extent as to render defendant liable over and above the sum due on his unpaid stock, to an amount equal to the shares held by him; the assessment upon defendant’s stock by. the receiver, under direction of the court appointing him; all questions affecting the jurisdiction of the court and the receiver; the facts of subscription by defendant; his holding stock at the time the indebtedness of the corporation accrued, etc.; the binding effect of any subscription made by defendant, are all put in issue by that part of the answer which sets up legal defenses to the action.

II. The equitable answer presents the following defenses, briefly stated, which defendant insists are cognizable in chancery:

1. No stockholder is liable to contribute to the payment of the indebtedness of the corporation beyond another stockholder.

2. Settlements by the receiver with other stockholders for sums less than was due from them.

*6123. The illegality of a part .of the alleged indebtedness of the corporation which renders it invalid.

4. The sufficiency of the assets of the corporation to pay its debts.

5. The fraud of the receiver and the officers of the corporation in purchasing the claims against the bank at a discount and exacting payment at their face.

6. Neglect of the receiver to discharge his duty.

7. The illegal and fraudulent acts of the officers of the corporation in contracting debts whereby the bank was intended to be bound beyond the limits of its indebtedness as prescribed by law, in making dividends unlawfully, in appropriating the money of the corporation, etc., etc.

i. bkobivek: oYffu'?sdic-s tion III. We will first consider the equitable answer in its application to the first count of the petition. It does not deny ^ proceedings under which the receiver was appointed, and that an assessment was made upon the stock of defendant, under direction of the court. The jurisdiction of the court and of the receiver being conceded, and the fact of assessment being admitted, it is to be regarded as res adjjti&ioata,. All questions as to the indebtedness of the bank and the like, involved in the assessment, or which it was necessary to determine before making it, must be presumed to have been adjudicated, and defendant is bound thereby.' Any errors made by the court, in the proceedings appointing the receiver and controlling and directinghis action, must be corrected by proper application to the coirrt or by appeal from its orders or decisions as provided by the law applicable to such cases.

The errors or irregular proceedings of the receiver must be corrected by the court having control of his action. None of these matters can be set up in an action brought by him under the direction of the court.

Authority is found for the proceeding wherein the receiver was appointed, and under which he is proceeding to wind up the affairs of the bank, in Code, §§ 1571, 1572, 2905.

The other matters set up in the equitable answer are applica*613ble alike to each count of the petition. They will hereafter be considered as applicable to each.

2. corporattyof'siock¿sdictión.u IY. The second count of the petition seeks to recover on the ground that the assets of the bank and the assessments upon the stock of the institution will not be sufiicient to pay its indebtedness, and that the liability of the stockholders to an amount equal to their respective shares of stock must be enforced to meet such indebtedness. It is not averred in the petition that these facts were adjudicated by the court in the proceedings appointing the receiver, if such an adjudication would be proper, nor did. such adjudication appear from the equitable answer. But if no such adj udication was made, or if made without authority, the facts can be established under the answer setting up the legal defense. Certainly, if the payment of the debts of the bank may be made out of its assets and assessments upon the shares of stockholders, no liability exists as claimed in the second count of the petition. It will be remembered that the liability sought to be enforced in this count is covered by Article 8, § 9, of the Constitution.

3_._. limitation of. Y. We will now consider the several defenses pleaded in the equitable answer as the same are applicable to both counts of the petition. They will be referred to in the or<jer we fiave above stated them. It surely cannot be the law that one stockholder cannot be required to contribute to the payment of the debts of the corporation beyond a proportional sum collected from another. If this were so, the circumstance of one insolvent stockholder would defeat the provision of the law and the constitution for the benefit of creditors of the incorporation. Nothing further need be said as to the first defense of the. equitable answer.

4. — :-; acts of receiver. YI. The fraudulent acts of the receiver and oflicers of the incorporation can be no defense to the action. If it were so, this too would defeat the constitutional provision , .. , _ , x tor the benefit ot creditors. J?or the same reason the neglect of the receiver affords no defense to the action. This view disposes of the second, fifth, sixth and seventh defenses set up in the equitable answer.

*6145 _._. tweenestoekholders. VIL It may be that the acts of the receiver and stockholders set out in these defenses would afford a cause of action against them by defendant, and it may be, too, that lie would have his action against any stockholder for contribution, who has not contributed equally with him in proportion to the stock held by each. But if such be the law he cannot delay the collection of the amount for which he is liable for the benefit of the creditors of the bank. Ilis liability is separate from that of the other stockholders — he is not jointly liable with all or each. The depositor or other creditor of the bank would be exposed to great hardship were he required to wait the slow progress of an equity action, wherein all the stockholders are parties, brought'to settle the equities existing between them growing out of their liabilities and relations as associates in the corporation.

VII. The matters set out in the third and fourth defenses, viz: the illegality of a part of the debts of the bank, and the sufficiency of the assets of the corporation to pay its indebtedness, if adjudicated in the proceedings wherein the receiver was appointed, cannot be pleaded as a defense to the first count of the petition. If there has been no adjudication to the effect that the liability of the stockholders, over and above the amount of the shares created by-the constitution, must be enforced for the payment of the debts of the bank, the defendant can, under the legal defenses pleaded by him, show the conditions and facts set up in the parts of his equitable answer now under consideration. .They afford a defense at law.

It follows-from these considerations that the District- Court •correctly ruled in sustaining plaintiff's demurrer to defendant’s equitable answer. The judgment of the court below is affirmed and the cause will be remanded for further prooceedings required by law. Affirmed.

Adams, J., having been of counsel in this cause took no part in its decision.

Rehearing

ON REHEARING.

Beck, J.

A rehearing was granted in this case on the *615ground that it was prematurely submitted, and our decision was announced at a time when counsel supposed further argument would be considered. It is not necessary to state the circumstances leading to the submission of the cause at that time. ¥e readily reached the conclusion that a rehearing ought to be granted, for, in a court of last resort, every opportunity should be given for a full argument of all cases decided therein. /

Additional arguments have been submitted upon the rehearing, and the cause has again been considered by .the court. Our re-investigation, with the additional aid afforded by the new arguments, has strengthened our confidence in the conclusions of the opinion heretofore filed. We deem it unnecessary to add anything to what we have already said We find nothing in the arguments recently filed, or in the authorities eited therein, meriting special notice. The ease is fully considered in our opinion heretofore filed. °We adhere to the conclusions therein announced.