Court Opinion

ID: 8186140
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:08:36.81871+00
Date Added: 2024-06-11T16:40:25.277120
License: Public Domain

Winslow, J.
The question presented is whether the circuit court was right in holding that the action commenced by llawsden, which was at first an action against the bank alone, is the exclusive action in which not only the assets of the bank are to be administered but also the liabilities of officers and stockholders are to be ascertained and enforced, or whether the court should have held that Ra/rtzheim? s action is the proper action in which the liabilities of officers and stockholders are to be enforced. This question seems to be satisfactorily answered in accordance with the ruling of the circuit court by the case of Hurlbut v. Marshall, 62 Wis. 590. That case was originally brought by a creditor against an insolvent banking corporation alone, seeking simply to administer the assets of the bank. It was plainly brought under secs. 3218, 3219, R. S. 1878. Afterwards, however, the compláint was amended, the officers and stockholders of the bank were made parties, and apt allegations were made seeking to charge the stockholders and officers with various statutory and common-law liabilities; and upon demurrer this court said, in substance, that the action so commenced was the exclusive action, and that all creditors must seek their remedy therein, and that the various liabilities of officers and stockholders must be enforced in this one suit. This conclusion is more or less strongly supported, also, by the conclusions reached in the following cases in this court, viz.: Ballin v. Loeb, 78 Wis. 404; Ford v. Plankinton Bank, 87 Wis. 363; and In re Oshkosh Mut. F. Ins. Co. 77 Wis. 366.
The amended complaint in the case of Marsden against *597the hank was almost identical with the first complaint in the case of Hurlbut v. Marshall. It showed that it was brought by a creditor as well as a stockholder of the bank, and it sought to administer and wind up the affairs of the bank. It did not contain a distinct allegation that it was brought on behalf of all creditors, hut it prayed that all the creditors might come in and be made parties and receive dividends; and, moreover, being an action under secs. 3218 and 3219, sxijrra, it was necessarily for the benefit of all the creditors who chose to come in and prove their claims, and could not be otherwise. Now, although when Hartzheim commenced his action no officers or stockholders had yet been made defendants in the Mcwsden action, nor had they been charged with any liability, still the action was' one in which such additional defendants could be brought in and their liability ascertained and enforced at any time when it appeared to be necessary; and this might be done on motion of a creditor who had become a party to the action by proving his claim, and even after judgment against the corporation. Stats. 1898, secs. 3221, 3222. Thus, the action of Ma/rsden against the bank was at the time of the commencement of the Hartzhevm actionpotentiality an action to enforce all the obligations of the officers and stockholders to the creditors which may be enforced by a creditors’ action in equity, and it was undoubtedly the proper course for a,creditor to come into that action to obtain his relief. Eurthermore, a receiver had already been appointed to the Ma/rsden action, and was in possession of the property of the bank, and was administering it. To hold that Havizheim might begin and maintain another action to reach the same results which might be readily reached in the action already pending would be to add confusion to that which was already sufficiently confused. One action to enforce the various liabilities of officers a,nd stockholders will present difficulties amply sufficient to test the learning and business ability of the court and its *598officers. The remarks made by Chief Justice Cole in the case of In re Oshkosh Mut. F. Ins. Co. 77 Wis. 366, are quite to the point here. He says on pages 369 and 370: “ Different suits brought to secure the same ends are always considered objectionable. It would be especially so in this litigation, to have different receivers appointed to take charge of the same estate, dispute and wrangle over its control, disposition, and management, and increase the expense and cost of settling it, for no useful purpose whatever. Confusion and conflict would inevitably arise between the receivers in the transaction and adjustment of the affairs of the corporation, and this is to be avoided, if possible.” The order appealed from provides that Hcurtzheim be permitted to come into the Cager action as a party, with all the rights and privileges of a party. So his rights are fully preserved. The order of the circuit court, enjoining the prosecution of the Hcw'tzheim action, and requiring all the creditors to come into the Gager action to seek their remedies, was plainly right.
By the Court.— Order affirmed.
Bardeen, J., took no part.