Court Opinion

ID: 8186560
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:09:05.795177+00
Date Added: 2024-06-11T16:40:26.283579
License: Public Domain

Mabshall, J.
The following reasons are given in the several briefs filed by counsel for appellants, why the demurrer to the complaint should have been sustained: (1) The cause of action to enforce the statutory liability of stockholders is a personal right and cannot be prosecuted by the receiver; (2) the agreement set forth in the complaint is void for want of consideration; (3) the complaint fails to show that the contingency exists upon which the right to enforce the agreement depends. We will briefly examine each of such reasons.
1. It is a sufficient answer to the suggestion that the statutory liability of stockholders to creditors cannot be prosecuted by the receiver, as an asset of the bank, to say that such is not the purpose of this action. Arguments of counsel on that point are based on false premises. The plain purpose of the pleader in drafting the complaint was to state a cause of action for an accounting as regards the deficiency of assets of the bank existing at the time of the reorganization to satisfy the liabilities mentioned in the agreement, and to enforce such agreement to the extent of such deficiency, not exceeding, however, the sum of $100,000. The agreement is treated in the complaint as an asset of the bank for the purpose mentioned, not the statutory liability of the stockholders as such asset. The signers of such agreement, for the considerations named in it, became conditionally debtors to the bank to the amount of $100,000, apportioned between them according to their holdings of stock *39ill the institution. It was provided that if such indebtedness by the happening of the condition precedent became absolute, the fund accumulated therefrom in the hands of the bank should be applied to the particular purposes named in the agreement. The transaction did not, as regards creditors, take the place of the statutory liability of stockholders. Its purpose was to bind its signers to make payment to the bank, to the amount and on the contingency mentioned in it, and the bank or its receiver necessarily must enforce it, if at all, in accordance with its terms.
2. The reasons advanced in support of the contention that the agreement is void for want of consideration, do not successfully bear consideration. One suggestion is that the creditors, not being parties to the transaction, were not bound, hence the purpose and consideration of the agreement failed. There was no purpose to bind the creditors, as before indicated. The transaction was a plain matter of contract between the stockholders who signed the agreement, each acting for himself, on the one side, and the bank on the other. Whether the creditors were so bound that a payment to the bank on the agreement would, of itself, to the extent thereof, discharge the statutory liability of the payor existing at the time the agreement was made, is immaterial.
But it is said the bank was incapable of making good its promise that payments made pursuant to the agreement should j)to tambo discharge the statutory liability of the pay-ors. A proper understanding of the contract will clear up all difficulty on that point. The agreement that payments should pro tcmto discharge statutory liability, impressed upon the obligations of the signers a trust for the purpose named therein. The scheme, plainly, was that any fund paid in upon the agreement should constitute a trust fund in the hands of the bank to be administered by it in such a way that the statutory liability of those who signed the agree*40ment, as such liability existed at the date of it, would be pro tanto discharged. The transaction created an express trust, the bank being the trustee. The creditor beneficiaries under the statute could not participate in the fund accumulated under the agreement except by releasing, pro tanto, their rights against the stockholders under the statute.
Every element of consideration mentioned in the agreement was valuable to the signers of it. Such elements consisted of the resumption on a plan that would discharge, at the outset, a large part of the claims that were enforceable against the stockholders under the. statute, and the release of the bank assets from the trusts for creditors, and return of them to the corporation where they could be more eco’nomically administered; and the mutual agreements between the signers of the instrument to effect that result. The mere statement of the matter, in connection with the fact set forth in the complaint that nearly $200,000 of the indebtedness of the bank was canceled in carrying out the plan of reorganization, shows not only that there was a good and valuable consideration for the agreement, but that it moved to the signers thereof and was a full equivalent for their obligation to contribute, in proportion to their holdings of stock, to make up the deficiency of assets necessary to satisfy the liabilities mentioned in such agreement. On the part of the bank the consideration of the obligation of the signers of the agreement has been fully executed. When their obligation shall have been discharged by payment of the amounts agreed upon to the receiver, it will be his duty to administer the fund in accordance with the terms of the agreement, that is, so that all payments by the defendants will pro tanto discharge statutory liability that existed against them at the date of the agreement. It does not appear that that will be attended with any serious difficulty.
3. The further contention that this action was prematurely brought, the contingency of a deficiency of assets of *41the bank existing at the date of the agreement to discharge the liabilities therein mentioned not having arrived, is sufficiently answered by referring to the allegation of the complaint that there> is a deficiency of such assets of over §50,000, and that an accounting is necessary to determine the exact amount. The purposes of this action are to determine that question and to enforce the agreement accordingly.
It is not considered necessary to take up the various lines of argument of counsel, or to review the numerous authorities cited. They are all addressed to the three propositions above discussed. A few very simple questions are presented for consideration, and it is supposed that what has been said covers all of them that are of sufficient significance to call for special mention. The complaint states a good cause of action to determine the amount of the deficiency which-the signers of the agreement obligated themselves to provide for, not exceeding §100,000, and to enforce their obligation accordingly. Each of the persons who shall be compelled to pay upon his agreement, will be entitled to have the amount so paid used in exact accordance with the understanding therein expressed.
By the Ooxirt.— The order is affirmed.