The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1901-11-09
SAVINGS BANK CASE.
Stockholders Were Not Relieved
From Liability.

A mistake was made in the report of
Judge Hazen's decision in the Topeka
Savings bank cases and the Stocknold-
ers, according to the courts ruling, are
liable for their subscriptions David
Overmyer has made the following ex-
PLANTATION of the decision on the motions:
Some time ago the Topeka Savings
bank which went out of business eight
years ago instituted actions against
several of the stockholders for their I'M
paid subscriptions to stock. To this the
stockholders set up seven distinct de-
lenses. The first defense in each case
being a general denial need not be
noticed as that might be made in any
case.
The second pleaded the three year
statute of limitations. but the court held
that as this action was upon contract
the three years statute had no appl1ca-
ton, the plaintiff having five years IN
which to bring an action from the time
the cause of action accrued. This became
the important question. the plaintiff
bank contending that the cause of ac-
ton did not and could not accrue under
the terms of the contract until a call
was made upon the stockholder, the de-
PENDANTS maintaining for their third de-
Tense that the bank might have made
call earlier than it did, that it was its
duty to make the call when 1t might
have made it, and that consequently the
statute of limitations would run from
the date at which the call might nave
been made, which was alleged to have
been the first day of December, 1892.
The court, however, held that the bank
was not obliged to make the call simply
because it might have made it; that the
question of time and the propriety of
the call was for the bank to decide, and
that as the bank could not maintain an
action upon the subscription until 1t
made the call, therefore. no cause of ac-
ton accrued until the call was made,
and the statute of limitations could not
begin to run until cause OF action ac-
crued.
The fourth defense set up by the de-
PENDANTS was upon the ground that the
general banking act of 1891 by its terms
made all Of the unpaid subscriptions OF
the Savings oank due. The bank, how
ever. commended that the act had no APP
plication and that if it should be con-
Strued as applying to the Savings bank
it would be Unconstitutional as impair
ing the obligation of the contract. The
court held that the act of 1891 had no
application to Savings banks previously
organized.
The fifth defense set up by the de-
PENDANTS was upon the ground that as
the Savings bank had ceased to do bust
ness in March. 1896, that it then became
the duty of the bank to call for all I'M
paid subscriptions. The bank, however,
contended that as no action accrued UNI
til the call was actually made, therefore,
the statute of limitations could not ap-
ply, and the mere fact of the bank
ceasing to be going concern could
have no effect whatever upon the right
of the bank to make the call at it's own
discretion, and this contention was sus-
tanned by the court.
The sixth defense questioned the ca
pacity of the bank to bring an. action,
it being no longer a going concern, but
as the court said. this was not seriously
insisted upon and was easily disposed of
as the statutes of Kansas make ample
provisions for Just such cases.
The seventh defense set up the fact
that the bank was no longer going
concern, that 1T had gone into volun-
tary liquidation on the End of March,
1896; that it had injudicious use of it's
assets, and that but for such injudicious
use of it's assets its bills could all have
been paid. and that there would be no
occasion for a call upon the stockhOld-
ers, and that therefore and for these
reasons the stockholders became liable
to pay when the bank closed it's doors
as a business institution. and that calls
could not thereafter be lawfully made.
and that the statute of limitations
therefore and for those reasons ran from |
March =, 1896
Again, the bank invoked the principle |
that the stock could not be made pay |
able until the bank should call for pay |
ment, and that az the bank could not |
collect until it made a CALL therefore |
the statute of limitations could not run |
against it upon the stock subscription |
The banks contention as to the seventh |
defense was also sustained by Judge /
Hazen, grounding his decision upon the |
decisions or the supreme court of the /
United States, which was held in many |
cases that where calls are provided for |
in a contract between a corporation and /
stockholder to pay until the call is made
and consequently that the statute of |
limitations cannot run upon the con-
tract of subscription until call is made |
by the corporation.
Thus all of the defenses except the
mere general denial set up by the stock
holders were denied and overruled by
the court. and the contention of the
Savings bank was sustained at every
point. The defendant prayed an appeal
to the supreme court and pending the
settlement of the question in that court /
in the case of defendant West, it was |
agreed between the parties that the
other cases should remain in allegiance.
Judge Hazen remarked in delivering
his opinion that the case was the most |
thoroughly argued of any case that was
ever presented for his consideration
The arguments were made by David
Overmyer, of the firm of Overmyer,
Mulvane & Gault, for the Savings bank,
defendant West was represented by
Carver & Larimer and z. A. Austin.
Fo0tball aft Ehioauo