Toll v. Cobbey

124 P. 357, 22 Colo. App. 244, 1912 Colo. App. LEXIS 24
CourtColorado Court of Appeals
DecidedMay 13, 1912
DocketNo. 3426
StatusPublished
Cited by1 cases

This text of 124 P. 357 (Toll v. Cobbey) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Toll v. Cobbey, 124 P. 357, 22 Colo. App. 244, 1912 Colo. App. LEXIS 24 (Colo. Ct. App. 1912).

Opinion

Walling, Judge.

Appellee, a creditor of The Western Bank, an insolvent banking corporation, brought suit, on behalf of all of the creditors of the'bank, against the corporation and many persons, as alleged owners of its capital stock, to enforce the liability imposed by [246]*246statute upon the .stockholders of the bank for its unsatisfied indebtedness. Appellant was not made a party to the original complaint, or to the first amended complaint. Upon a motion filed by a defendant to the amended complaint having been sustained, the plaintiff was given leave to amend his complaint; and thereupon a second amended complaint was filed, wherein appellant was for the first time named as a defendant. The second amended complaint, among other things, alleged, in effect, that appellant’s deceased husband was, at*the time of his death, the owner of ten shares of the capital stock of the defendant bank, which stood on its books in the name of The Wallace Investment Company, and that appellant became the owner of the same shares, under the provisions of her husband’s will, and, by reason of her ownership of those shares, was individually liable for the debts of the bank, under the statute, to the amount of two thousand dollars. Thereafter a decree was entered in the suit, wherein judgment was given against a number of the defendants, as stockholders of the defendant bank, for the full amount of the liability of each, in accordance with the terms of the statute fixing such liability. It.was stated in that decree that appellant, and others named, “are non-residents of the state of Colorado, were not served, and made no appearance in said action; ’ ’ and it was ‘ ‘ ordered that this cause is continued upon the docket of this court * * * for such other and further proceedings as may be proper to bring any other of the said defendants, not now before this court, in this cause; and to adjudicate said claims of the said creditor plaintiffs against them, or against any property of such defendants, [247]*247which may be found within the jurisdiction of this court. ’ ’

A few months after the entry of the decree, the plaintiff caused a writ of attachment to be issued, in the action, to the sheriff of the City and County of Denver, against the property of appellant, for the amount of her liability as alleged in the second amended complaint; and the writ was levied on property belonging to appellant. Soon after the attachment was levied, an alias summons was issued in the cause, in which appellant was named as a defendant, and an effort was made to obtain service by publication of the summons. It appeared from the affidavit and order for publication that appellant was a party to the action, and a non-resident of the state. Upon motion of attorneys for appellant, specially appearing for that purpose, the attempted ser.vice by publication was ordered to be set aside, for the reason, as stated in the order, that appellant had not properly been made a defendant in the cause. The motion to quash the service of the summons stated that appellant resided in the state of Massachusetts. A few days later, on motion of plaintiff’s attorneys, an order was entered permitting the plaintiff to make appellant a defendant, and to refile his second amended complaint, “in which the said Katharine W. Toll appears as a party defendant,” and authorizing summons to be issued as provided by law.” The second amended complaint was thereupon marked “refiled,” and another summons was issued, and placed in the hands of the sheriff of the City and County of Denver, for service. Upon due return of that summons by the officer, certifying that, after diligent search, he was unable to find ap[248]*248pell ant, and tlie filing of a proper affidavit of lier non-residence, a new order was made for the publication of tlie summons; and it was published accordingly, and a copy thereof duly mailed to appellant. Appellant again appeared specially, by her attorneys, and moved to quash the service of the summons by publication, which motion was overruled by the court. No further appearance having been made by appellant, judgment by default was given against her, in what was styled a “supplemental decree,” for the amount found to be due on account of her stockholder’s liability, and the attachment against her property was sustained. From that judgment this appeal was taken.

The assignments of errors alleged on the record here challenge the jurisdiction of the court to render the judgment or decree against appellant. The argument in support of the assignments proceeds generally upon the propositions that appellant never became a party to the action, so as to authorize the attachment of her property, and the issuing of summons against her therein, that the order made by the court, after quashing the first attempted publication of the alias summons, and when several terms of the court had elapsed since the first judgment was rendered in the cause, permitting the second amended complaint to be “re-filed,” and summons to be issued, was in excess of the jurisdiction of the court, and that all of the proceedings shown by the record, so far as they undertook or purport to affect appellant, or her property, including the judgment against her were coram non judice and void.

[249]*2491. It was established by the decisions of our supreme court, prior to the enactment of the banking act of 1907 (see R. S. 1908, sec. 324), that the individual liability imposed by statute upon the stockholders of an insolvent banking corporation was to be enforced in equity, and in a suit brought by or on behalf of all the creditors against all the stockholders, who could be subjected to the processes of the court, whether by personal service of summons upon them, or by attachment of their property, within the state.

“It is settled in this jurisdiction, by Zang v. Wyant, 25 Colo., 551, that the proper procedure to enforce the liability of stockholders in an insolvent bank for debts of the corporation, under the statute here under consideration, is by a suit in equity by a creditor or creditors, for the benefit of all creditors, and against all the stockholders.” Adams v. Clark, 36 Colo., 65. See also Buenz v. Cook, 15 Colo., 34; Richardson v. Boot, 18 Colo. App., 140.

The suit was administrative in character, the main purpose being to enforce contribution by as many of the stockholders as practicable, within the limit of liability fixed by the statute, to the satisfaction of the whole indebtedness of the insolvent bank in excess of its assets. The judgment was rendered for the benefit of all the creditors, but against the stockholders severally. For reasons not necessary to discuss, it was frequently impossible, or at least impracticable, to acquire jurisdiction of the persons or property of all of the stockholders, within a reasonable time after the institution of the action. The proceeding being for the benefit of creditors, they were entitled to as speedy relief against defendants [250]*250actually brought into court, as the nature and circumstances of the case permitted; and to delay the entering of judgment against the stockholders served, until all could be brought in, would, in conceivable cases, have resulted in defeating the object of the statute creating the stockholders’ liability. It is plain that, in such a case, the court might lawfully proceed to judgment against the stockholders served or appearing, and retain the cause for the purpose of proceeding against other stockholders, as to whom, by reason of non-residence or otherwise, no jurisdiction had been acquired.

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Cite This Page — Counsel Stack

Bluebook (online)
124 P. 357, 22 Colo. App. 244, 1912 Colo. App. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/toll-v-cobbey-coloctapp-1912.