The herald., 1894-06-12
CITY BANK LITIGATION.
Judge Van Dyke Renders an Importani
naaIafnu

Judge Van Dyke Renders an Important
| Decision.
| Judge Walter Van Dyke of the su-
perior court yesterday rendered an inn
portant opinion in the case Of George NJ.
North vs.. W. I. Childress ct AL, a case
which has been pending for some time.
| The action was against the defendants
as stockholders of the defunos City bank,
and was brought for the purpose OF re-
covering from them severally, under the
provisions OF the constitution and the
code with reference to the individual
| liability OF stockholders OF corporations.
The defendant John j. Schallert con.
tested the claim, and the action was
tried as to him only.
| In the opinion filed by Judge Van
Dyke he says that one OF the objections
raised on the part OF the defendant was
that the complaint alleges the City bank
was indebted for money had and received
Tor the use of the plaintiff, without set
ting out the terms of the contract, and
that no demand for payment is alleged
and fails to aliege that the plaintiff was
the assignee OF the right to maintain an
action against the stakeholder, the alle-
CATION being that the claim against the
City bank was assigned. These conten-
tons are held to be not good by the
| court.
1t was further contended by the de-
fendant that the plaintiff failed to chow
that the City bank was a corporation,
and this the court also holds was unten-
able.
In regard to the denial by the defend
ant that the other defendants own stock
as alleged, the court holds that such
denial is immateral Tor the purposes of
this action, the defendants liability be-
ing measured by the constitution. and
does not depend upon the ownership by
others OF any particular amount OF
stock, but upon the whole amount OF
stock subscribed or issued, which in this
case is admitted.
The court concludes ss follows:
There is nothing IN the defendant'a
contention that the Assignment of
claim against o corporation ia not an
assignment also against the stock holder.
Debts Contracted by tho corporation are
also debts contracted by the one who
holds stock in the corporation at the
time. and each stakeholder is person
ally liable as principal debtor ior his
proportion of the corporate debts con-
traoted while he lie a stockh older, and
the right accrues against the stock
holder at the same time az against the
corporation. This has been uniformly
held in this state, both under the old
constitution and under the present, and
in this respect the provision ie similar
in both. There being but one claim,
the assignment of that claim carries
with it the right of action not only
against the corporation, but also against
the stockholder liable for debt. 1t re-
suits from the foregoing:
| First-That the City bank was shown
to be q corporation as stated in the com
plant, and that the amount OF capital
stock subscribed and issued was 500, 900
and no more.
Second-That the defendant Schal-
lert at the times mentioned in the COM
plant held stock in said corporation to
the amount of Ito shares.
| Third-That the corporation, the City
bank had and received Tor the use Of the
plaintiff the amount OF money as stated
in his complaint, and had and received
for the use of each Of the assignors OF
the plaintiff the several amounts as in
the complaint stated.
Fourth--rhat these amounts had and
received for the use Of these several as
sign0rs were duly assigned TO the plain
tiff IS stated in the complaint.
Fifth-That the City bank closed its
doors and ceased to transact business,
and continued 30 to cease to transact
business, "a alleged in the complaint;
and that the several Gums of money be-
came due and payable to the plaintiff
and his assignors as therein stated, and
were at the commencement of this 40
ton due, owing and unpaid to the
plaintiff. That the plaintiff is, therefore,
entitled to fndings and judgment &C
oordingly.
ANOTHER OPINION.
Another branch of the City bank liti-
CATION was settled by Judge Shaw in an
opinion filed by him yesterday in the
case OF Margaret E. Miller vs.. the City
bank. In this case the Northwe stern
Mutual Life Insurance company and
J. NJ. Rice interviewed and filed petitions
asking to have liens declared on the
assets in the hands of the receiver, for
the pa, ment of the sum OF $3.50 and
$30.654, which the bank received in
trust for the assignor of the petitioner
Rice and for the insurance company,
respectively. 1t was admitted that the
funds were received in trust and were
used by the bank in its business.
After discussing the various points
raised by the intervenors the court
holds: 1.-THE trust funds being all
mingled together, 1t is to be deemed
that this loans were made in equal pro-
portion out of all the funds on hand at
the time, and each owner will be en-
titled to a charge on the respective
loans in the proportion which his fund
bore to the whole fund at the time the
loan was made"
The court works this out as follows |:
Mr.. Rice is entitled to charge on all
loans made from trust funds from jan
uary 9th to January Goth, in the proper
ton Of 200 to 48 900; on all loans from
trust funds from January Goth to May
10th, in the proportion Of 1880 to 48 900.
The overdrsfts were mostly made sitter
May 10th, and the charge upon the over
drafts will bs in the same proportion as
last given. The insurance company 10
entitled to lien on the proceeds of over
drafts and checks above named, as made
after June IA, 1903, in the proportion of
800 to $4,000. An order WAS made in
accordance with the views of the court.
Kern City Gold.
The latest gold discovery is almost at
home-that is, near Bakersfield, sage
Californian. Mr.. Orumley of Kern city