Court Opinion

ID: 5551462
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:32:40.827853+00
Date Added: 2024-06-11T08:35:08.466704
License: Public Domain

By the Court.

Nisbet, J.
delivering the opinion.
The great questions made by the demurrer in this case, as to the liability of the stockholders in insolvent banks, were abandoned in the argument, because previously discussed in different cases at this term. I refer to those cases for the judgment of this Court, on those interesting questions, and proceed to notice two points made in this case.
[1.] The first is, that the complainant has an adequate remedy at Law, and therefore has none in Equity.
This is a bill brought by the assignee of the Bank of Columbus against certain of the stockholders of the Planters & Mechanics’ Bank, to compel them to pay up the amount unpaid on their stock, or so much thereof, rateably, as may be necessary to satisfy the demands of the Bank of Columbus against the Planters & Mechanics’ Bank, or that they be decreed to pay such proportion of the debts due to the complainant, as assigneé óf the Bank *530of Columbus, as the stock held by them respectively, bears to the whole stock of the Planters & Mechanics’ Bank.
The demands claimed in the bill are founded on the bills of the Planters & Mechanics’ Bank, and also other evidences of debt, as certificates of deposit. It goes, therefore, upon the personal liability of the stockholders, under the 11th section of the charter, for the demands due on the bills held by the complainant; and it goes also upon the stock unpaid by the stockholders for the demands due on those bills, and demands due on other accounts, as set forth in the bill. Hence, the double aspect of the prayer of the bill, as above set forth.
The bill-holders, no doubt, can proceed at Law, each in his several action, to compel the stockholders to pay, under the 11th section; for that section makes them liable, as “in common actions of debt.” This remedy is provided by the charter. Prince, 12V. But it does not follow, that because a bill-holder may sue at Law, he must sue at Law. The remedy at Law, in many cases, as in this, would be inadequate. The liability by the charter is “in proportion to the amount of shares, and the value thereof, that each individual or company may hold.” It is, therefore, a case for apportionment and contribution; and such cases belong to the jurisdiction of a Court of Chancery. 1 Maddox’s Ch. 232. 1 Story’s Eq. §§469, 470. Angell & Ames on Corporations, 564.
Again, Equity will take jurisdiction, in order to avoid a multiplicity of suits. The remedy at Law would be an action against each stockholder, and in each suit, the plaintiff would recover only that stockholder’s proportion of the common liability. Hence, to collect his debt, he might be driven to a number of actions. The debts due to the complainant in this bill, are large in amount. A number of the stockholders, indeed all, as the bill avers, who could be made parties, are brought before the Court, and a multiplicity of suits is avoided. On this account, the bill is sustainable. 1 Story’s Eq. §§64 to 67, 478, and 483. 1 Kelly, 376.
But this bill goes upon another and distinct ground for the recovery of all the debts due by the Planters & Mechanics’ Bank to the Bank of Columbus, whether by bills or otherwise. It goes upon the ground that the capital stock of the P. & M. Bank is an equitable or trust fund, for the payment of its debts, and that the unpaid stock is a part of the capital stock, and may be followed in the *531hands of any person holding the same, who is not a bona fide purchaser, without notice. This proposition, so important to sound banking and to the prosperity of the State, this Court has held already at the present term, and is now affirmed. I enter not into the discussion of it, because it has not been questioned in this case, but refer to the cases in which it was discussed. This being true, the remedy is only in Equity. This bill is filed to reach this trust fund — to appropriate a trust fund in the hands of the defendants, as stockholders. In this aspect, it seeks not to charge them personally as for a debt due by them, but to charge each and every of them as trustees, holding a fund liable to the debts of the creditors of the corporation. 2 Story’s Eq. §1252. 17 Serg. & Rawle, 65. 6 Mississippi R. 364. 8 Peters, 281. Nevitt vs. Bank of Port Gibson, 6 Smede & Marshall, 557. Ang. & Ames on Corp. 540 to 546.
The demurrer to the bill, therefore, upon the ground that the complainant has an adequate Common Law remedy, was, in our judgment, properly overruled.
[2.] The other ground of demurrer, insisted upon, and the only other ground is, that the liabilities of the defendants are individual, several and separate, and not joint.
The bill does not charge the defendants as jointly liable to the plaintiff for the whole of his debts. It does not assume that they are liable, but rateably, and seeks to recover rateably against each. If this ground goes upon the idea that the bill makes or seeks to make the defendants liable as joint contractors, it is not warranted by the bill. The bill seeks to charge them, as the demurrer demands, separately and severally. In this view of it, all that has been already said is applicable to this demurrer, and it also was well overruled as not being warranted by the case made in the bill.
Let the judgment be affirmed.