Van Tuyl v. Kress

158 N.Y.S. 810 | N.Y. App. Div. | 1916

Page, J.:

Section 196 of the Banking Law (Consol. Laws, chap. 2; Laws of 1909, chap. 10),* **§which created the liability sought to be enforced in this action, provided that the stockholders of a trust company should be individually responsible, equally and ratably, for the then existing debts of the corporation ” in an amount not exceeding the par value of the stock held by each. Section 19 of the same law (as amd. by Laws of 1910, chap. 452) gave the Superintendent of Banks the power, under the conditions therein set forth, to liquidate the affairs of the corporation, and the statute provided that he “ shall collect all debts due and claims belonging to it, and upon the order of the Supreme Court may sell pr compound all bad or doubtful debts, and oh like order may sell all the real and personal property of such corporation or individual banker on such terms as the court shall direct; and may, if necessary to pay the debts of such corporation, enforce the individual liability of the stockholders. ” The *565facts entitling the plaintiff to maintain the action against each defendant are different. It must he shown that a demand has been made upon each and each has refused to pay the assessment levied by the Superintendent and it is in each case a separate demand and refusal. It must be shown that each defendant is a holder of shares in the corporation, which are separate and distinct shares in each case. The liability of each shareholder is several, not joint, and arises out of different facts from that of his fellow-shareholder. It is clear, therefore, that the causes of action against the various stockholders could not, in an action at law, be joined in one action. (O'Brien v. Fitzgerald, 143 N. Y. 377.) But the stockholders are responsible equally and ratably ” to the extent of the par value of their stockholdings. In order to apportion the liability among the stockholders equally and ratably, a marshalling of the assets of the corporation is necessary, after which the amount due from each stockholder may be tentatively determined. But in the event of any stockholder being shown to be insolvent, or if for any reason the judgment against him be uncollectible, the deficiency thus created will have to be apportioned among the solvent stockholders until the liability of all has been exhausted to its full extent. (Marshall v. Sherman, 148 N. Y. 9, 22; Van Tuyl v. Schwab, 165 App. Div. 412.) To accomplish this result at law would perhaps involve repeated actions against the. same stockholder before his liability was completely exhausted, to say nothing of separate actions each involving a long accounting against each stockholder. To avoid a multiplicity of suits and accomplish a perfect relief in a single action, it is, therefore, necessary to resort to the equitable side of the court. For this reason I am of opinion that the motion to strike the case from the Special Term calendar was properly denied.

The order should be affirmed, with ten dollars costs and disbursements.

Clarke, P. J., McLaughlin and Laughlin, JJ., concurred; Smith, J., dissented.

Order affirmed, with ten dollars costs and disbursements.

Now Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369), § 206.—[Rep.

Now Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369), § 67 et seq.; Id. §§ 69, 80.— [Rep.