48 Ill. App. 481 | Ill. App. Ct. | 1892
Opinion
The appellee recovered a judgment against appellant on the ground that he was a stockholder in the Edwards County Bank, of Kansas, which bank became insolvent and failed to pay a sum of money owing by it to the appellee.
The sole question of fact over which there can be any controversy, seems to be whether the appellant at the time of the dissolution of the Edwards County Bank was a stockholder in that corporation, and this of course depends on whether he had sold and transferred the stock (which he held for a number of years) to hlarzetta prior to such dissolution of the banking corporation. We are entirely satisfied with the conclusion reached by the jury upon this point.
Aside from non-compliance with the requirement of the by-laws that the transfer must be made upon the books of the corporation, as to which appellant offers the excuse that the failure to enter such transfer was not his fault, he having done all he could, though ineffectually, to that end, we think there is sufficient in the proof to warrant the conclusion that the sale of this stock here attempted was merely colorable, and for the distinct and fraudulent purpose of avoiding liability as a. stockholder. Cook on Stockholders, Sec. 265 and note 1.
The important legal question is, whether by the law of Kansas, organic and statutory, a stockholder in such a corporation is liable for the debts thereof under the circumstances here disclosed, and if so, whether such liability is several and may be enforced without joining other stockholders.
We think this has been settled by the Supreme Court of that State adversely to appellant.
While we have seen no adjudication especially upon the point whether the constitutional provision is self-executing in so far as it declares liability, and whether the rule or principle there announced can have vitality and vigor only when repeated in a statute, yet the court in Abbey v. Dry Goods Co., 44 Kan. 415, seem to assume, as though not a matter in doubt, that such liability exists, and while the question directly for decision was as to the mode of enforcing it, the fundamental promise was clearly taken .for granted. We see no great difficulty in that view of the matter, but in any event the construction placed by that court upon the meaning of its constitution or statute, should prevail here unless very powerful considerations are opposed, and we perceive none such in this instance.
The construction placed by our courts upon statutes of this State as to the mode of enforcing liability of directors and stockholders, does not, in our opinion, require us to reject the construction placed by that court upon the ordinances of that State. If by these latter there is imposed a liability several and individual, and is enforceable against each stockholder, no reason has been suggested or occurs to us that would warrant our courts in refusing to apply the rule here.
It has been suggested that the debt was incurred without lawful power on the part of the Edwards County Bank, in whose charter there is no specific authority to borrow money; but we understand that is an incidental or implied power possessed by banking corporations generally, unless especially denied or restricted.
Of course it is not a part of the continuous practice of any bank to borrow, but it is often necessary in the reasonable exercise of express power, and hence it is usually regarded as a necessary incident. Aloise on Banks and Banking, Sec. 63. Certainly the borrowing must be incidental to the usual and legitimate business of a bank, otherwise the act is ultra vires; but it is not apparent that there was anything extraordinary or illegitimate in this loan.
Other questions suggested in the briefs need not be discussed, as in the view we are inclined to take of the case, the foregoing considerations require us to affirm the judgment.
