Clark v. Ogilvie

63 S.W. 429, 111 Ky. 181, 1901 Ky. LEXIS 182

• Court: Court of Appeals of Kentucky
• Decided: June 6, 1901
• Status: Published

Opinion

Opinion of the court by

JUDGE O’REAR

Affirming.

The father of Woods and Susie Ogilvie, while they were jet infants, owned 35 shares of the capital stock of the Second National Bank of Columbia, Tenn. He died, while owning the stock, intestate, and W. W. Ogilvie was appointed as his administrator, and subsequently as the guardian of the two infants named. In addition to the bank stock, the two infants inherited from their father certain lots of land in Nashville, Tenn., which seems to have been practically all of their estate so derived. 'After the qualification 'of the guardian, who took and held the title to the shares of the bank stock for his 'wards, he having taken it as such in -specie upon the settlement of the estate of their father, the bank failed, and the comptroller of currency took charge of its affairs, and appointed a; receiver for it. Thereafter the comptroller determined and adjudged that an assessment of 100 per cent, be made against all the stockholders of the bank to cover its contract liabilities, and directed suit to be brought by the receiver where necessary. .Thereupon the receiver brought an action in the chancery court of Maury county, Tenn., against W. W. Ogilvie, guardian of Woods and Susie Ogilvie, and Woods Ogilvie and Susie Ogilvie. In his bill of complaint, after reciting the incorporation of the bank, its failure, and his appointment, the assessment, and the comptroller’s directions, he pleaded: “Complainant states' and shows unto your honor that defendant, W. W. Ogilvie, as guardian of Woods and Susie Ogilvie, was a share-holder of the capital stock of said bank, owning and holding thirty-five shares of said stock, of the par value- of $100.00 per share, amounting to the sum of $3,500.00. . . . Defendant has wholly failed and refused to pay to complainant any part of said -assessment, and all of the same is past due, owing and unpaid to complainant as such receiver, together with interest thereon at the rate of six per cent, per annum from July 28 1893. . . . Complainant states and shows unto your honor that defendants, Woods Ogilvie and Susie Ogilvie, are minors, and defendant, W. W. Ogilv'ie, is their regular guardian. The said Woods and Susie Ogilvie own an estate, both real and personal, which is under the control and guardianship of defendant W. W. Ogilvie, as their regular guardian. Complainant charges he has the right to have and recover of the estate of Woods and Susie Ogilvie in the hands of said guardian, said assessment, and to this end to have the estate in the hands [of the] guardian applied to the payment thereof; . . . that upon the hearing your honor will render judgment against defendants, and in favor of complainant, for the full amount of said assessment, and interest thereon, and award execution thereof,” etc. The guardian filed answer, admitting the averments of fhe complaint, and asked the judgment of the court as to whether he and the wards’ estate were liable on the facts admitted.

The record shows by the return of the' sheriff, that summons had been served upon the infants; and on the 7th of November, 1894, the court rendered a judgment as follows: “This day this cause come on further to be heard before ■Chancellor Abernathy upon the bill of complaint and the answer of defendants, upon consideration of which it appears to the court that defendant, W. W. Ogilvie, as guardian of defendants, Woods and Susie Ogilvie, held thirty-five shares of the capital stock of the Second National Bank of Columbia, Tennessee, at the par value of $100.00 per share, amounting in all to the sum of $3,500.00. It further appears that said bank became insolvent, and that complainant was legally appointed receiver of said bank by the comptroller of the currency at Washington, D. C., and that the comptroller, pursuant to law, made an assessment upon the shareholders of said bank of one hundred per cent, of the par value of said stock, to be paid July 28, 1893; and it appears that defendants have not paid any part of said assessment, and that the same, with interest since July 28, 1893, is past due, owing, and unpaid. The court is of opinion that complainant, as such receiver, is entitled to recover of defendant, W. W. Ogilvie, as guardian of defendants, Woods and Susie Ogilvie, said sum of $3,500.00, and the further sum of $267.00 interest thereon, making in all the sum of $3,767.00 to be paid out of the estate of the said Woods Ogilvie and Susie Ogilvie, and doth so adjudge and decree. It is therefore considered by the court that the complainant have and recover of defendants said sum of $3,767.00, and the costs of this cause, for which let execution issue, to be levied of the goods and chattels , lands and tenements, of said Woods Ogilvie and Susie Ogilvie; all of which the court adjudges and decrees.”

Execution issued upon this judgment, directed to be made of the estate of Woods and Susie Ogilvie, and was levied upon the lots of land in Nashville which they had inherited from their father. These lots were sold, and brought about $2,-500, leaving a balance due, as claimed by the receiver, of $2,338.90. Thereafter it appears that the maternal grandfather of Woods and Susie Ogilvie died intestate in Garrard county, Ky., by reason of which an inheritance was cast upon them of certain real estate situated there. Since the proceedings above mentioned in Tennessee, they have both arrived at full age, and this action was brought in the Garrard circuit court by the receiver against them to have enforced the judgment above quoted, that it may be levied on the estate in Kentucky. •Defendants filed answer, denying that the judgment rendered in chancery court in Tennessee was in fact, or intended to be, against them personally; that the court had not jurisdiction of their persons; that the matter submitted by the pleadings and in issue in said action was not the question of their pérsonal liability; that in fact they were never served with process, and that the return of the officer reciting' that fact was either his mistake, or was íalse, and therefore fraudulent; that the answer filed by their guardian, in so far as it purported to be for them, was without authority from them, and was in fraud of their rights, because, he being personally liable to them under certain statutes of Tennessee for failing to sell this stock as administrator, and having taken it over to himself as guardian and held it until the bank became insolvent, such action was a violation of his trust, and, in so far as he sought to have their rights adjudicated by his action in the Tennessee court, it was an effort to shield himself from his own wrong by subjecting them and their property to the satisfaction of the loss. Defendants also pleaded the statute» of limitations, boll of Tennessee and Kentucky, in bar of the right of recovery, relying on the seven years’ statute of Tennessee, and five years’ statute of Kentucky. A demurrer was filed to this answer, and overruled. The plaintiff declining to reply, the court dismissed his petition, and he has appealed.

The liability of appellees was fixed' by section 5152, Ü. :S. Rev. St., which is as follows: “Persons holding stock as executors, administrators, guardian® or trustees shall not be personally subject to any liability as stockholders; but the estate and funds in their hands shall be liable in like manner, and to the same1 extent, as the testator, intestate, ward or person interested in said trust fund would be if living and competent to act and hold the stock in his own name.” It will be observed that in fixing the liability of stockholders in national banks; so far as the persons beneficially owning stock may be under the legal disability of infancy are concerned, as well as instances where the stock is held by executors, administrators or other trustees, it is¡ the estate, and not the person, that is made liable for assessment. It will be noticed that neither the executor, guardian, nor trustee is personally liable, although the legal title to the stock may be held by them. This is an exception to the general provision contained in the preceding sections of the statute. Then, in fixing what is liable, the Congress has provided that, instead of these trustees personally, it is “the estate and funds in their hands.” Whether the guardian in this instance held the title to the real estate in Tennessee is not made clear, nor do we deem it necessary to determine. It may be fairly assumed, however, that the custody and control of all the Tennessee estate owned by the infants was in their guardian, and that all of that estate, from whatever source derived, was liable to the assessment made against this stockholder by the comptroller of currency for the •debts of this bank. Such, indeed, seems to have been the extent of the claim of the receiver in his suit in the Tennessee chancery court, and such is the fairly-expressed view of the chancellor, as shown by the language of the judgment. It is not shown, nor is it contended, that the Tennessee guardian ever had either the control or custody or title to any of the property in Kentucky now sought to be subjected.

We conclude, therefore, that the judgment sued on in this case (the one above quoted) was not a personal judgment against Woods and Susie Ogilvie, but was a judgment against their guardian and their estate in his hands. Such was the only judgment that the court was authorized to render, either under the pleadings and issue joined, or under the statute relied on.

The infants could not bind themselves, by contract or otherwise, as stockholders of the bank, nor could their father have bound them, had he intended to do so, by having this stock conveyed to them directly. Foster v. Chase (C. C.), 75 Fed. Rep., 797; Witters v. Sowles (C. C.), 32 Fed. Rep., 130-137. If the judgment declared on in this case was a personal judgment against appellees, and was fraudulently obtained, or was rendered without the service of process upon them, or if it was not a personal judgment .against them, and this action may be considered as an effort upon the part of the receiver to now enforce their personal liability, assuming that they-might be personally liable under the statute quoted, yet the plea of limitation interposed by appellees would be good; for if it was not a •personal judgment, and this is an original action to make them personally liable, more than seven years has elapsed, since the accruing of the action, on July 28, 1893, until the institution of this suit. On the other hand, if it could be construed as a personal judgment, and the court had not jurisdiction to render it, or it was procured by’fraud, or without service of process, it is equivalent to no judgment, and the statute would apply.

It is argued for appellant that, if this could be construed as a personal judgment, appellees and this court are alike bound by it, because we are required-, under the Federal statute and -Constitution, to give full faith and credit to the judgments of the tribunals of other States of the Union. In Wood v. Wood, 78 Ky., 625, we had under consideration this section of the Constitution, and we there said of a judgment by one of the Tenhessee courts: “But whether it be treated as a foreign judgment, or as the judgment of a court of general jurisdiction rendered in a sister State, and therefore coming within the' constitutional provision and the act of Congress in regard to the faith and credit to be given such judgments, is immaterial, as it is now held, both by the State and Federal courts, that judgments of either character may be collaterally attacked for want of jurisdiction of the subject-matter or of the person, regardless of the recitals in the judgment or record,” citing authorities.

Adhering to that rule, the averments of the answer negativing the service, and alleging the fraud in procuring, by having false return made on the summons-, if true, are good as defenses against it. In this record they stand as admitted to be true.

For the reasons indicated, the judgment appealed from is affirmed.