Rohr v. Stanton

*498 MR. JUSTICE STARK delivered the opinion of the" court. Plaintiffs brought this action for the purpose of enforcing as against the individual defendants named their liability as stockholders of the defendant Stanton Trust & Savings Bank of Great Falls, Montana (hereafter inferred to as the bank), under the provisions of section 6036 of the Revised Codes of 1921, which, as amended by Chapter 9, page 24, of the Session Laws of 1923, reads: “The stockholders of every bank shall be severally and individually liable, equally and ratably, and not one for the other, for all contracts, debts, and engagements of such corporation, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares. * * * ” The defendants jointly demurred to the plaintiffs’ amended complaint (hereafter referred to as the complaint), on the ground that the same did not state facts sufficient to constitute a cause of action. The demurrer was sustained. Plaintiffs having declined to further plead, judgment of dismissal was rendered and entered against them, from which they have appealed. The complaint consists of separate statements of twelve separate causes of action. The allegations of each cause are identical with the exception of the name of the claimant and amount of indebtedness. Therefore we shall consider the allegations of the first cause of action alone, as they will sufficiently serve the purposes of this opinion. The only question presented for consideration is whether the complaint states a cause of action. We are therefore called upon to determine whether the complaint would warrant a recovery by plaintiffs upon any admissible theory, for, if it would, it is sufficient to withstand an attack by general demurrer. (Anderson v. Border, 75 Mont. 516, 244 Pac. 494.) The order sustaining the demurrer was general and did not indicate the theory of the court’s ruling. *499 In their brief filed in this court, defendants assail the sufficiency of the complaint upon three grounds: (a) That it does not sufficiently allege the insolvency of the defendant bank; (b) that it does not state facts sufficient to show that the action is prosecuted by plaintiffs for the benefit of all the creditors of the bank under the provisions of section 9083, Revised Codes of 1921; (c) that it does not state facts sufficient to bring the plaintiffs within the provisions of section 6036, supra. We shall consider these objections in the order named. 1. The complaint alleges, upon information and belief, that on or about the ninth day of July, 1923, the bank “was insolvent,” and on said day closed its doors, notified the banking department of the state of Montana of the fact of such insolvency and thereupon ceased to further engage in the banking business; that the total amount of its indebtedness to creditors is the sum of $600,000, which includes the claims of the plaintiffs; and that the assets of the bank at the present time, if converted into cash, would not bring in excess of $100,000. It is contended by the defendants that the allegation that the bank “was insolvent” is the pleading of a conclusion of law, rather than the pleading of an ultimate fact. No authorities are cited to sustain this contention. The words “insolvent” and “insolvency” are of general use and obvious meaning. It appears to be generally held that insolvency may be alleged in terms without stating the probative facts. In Coal City etc. Co. v. Hazard Powder Co., 108 Ala. 218, 19 South. 302, there was a general allegation that the defendant was “insolvent.” In holding that to be a sufficient allegation of the fact of insolvency, the court said: “The fact of insolvency may, we think, be averred as it is in this bill. That is a well understood and recognized pecuniary condition of the party in reference. It may be a sort of conclusion from other facts, but if so it is also that kind of collective fact which may be averred and deposed to, and its statement involves and presents all the minor facts which make up the condition; and *500 the condition itself — the result of the facts which enter into it — is the fact in issue.” (See, also, 3 Bancroft’s Code Pleading, p. 2406; Gray v. Brunold, 140 Cal. 615, 74 Pac. 303; Grunsfeld Bros. v. Brownell, 12 N. M. 192, 70 Pac. 310; Lammert v. Stockings, 27 Ind. App. 619, 61 N. E. 945; 27 C. J., p. 771, sec. 676.) Under these authorities, we hold the allegation of the complaint that the bank was “insolvent” sufficient to entitle plaintiffs to make proof of “the minor facts which make up the condition” of insolvency, as declared by section 6014a, subdivision 10, Chapter 90, Session Laws of 1923, page 240. 2. Does the complaint show that plaintiffs are entitled to maintain this action for themselves and on behalf of other creditors of the bank under the provisions of section 9083, Bevised Codes of 1921, which provides that when the question is one of common or general interest of many persons, or when the parties are numerous and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all? Where a suit is brought by or against a few persons in a representative capacity, that fact must be alleged in the pleading so as to present to the court the question whether sufficient parties are before the court properly to represent the rights of all. And the usual averment in a case of that kind is to the effect that the action is brought, not only for the benefit of the plaintiffs, but also for the benefit of all others similarly interested who may elect to come in and contribute to the costs and expenses of the suit. (15 Ency. Pl. & Pr. 631; Carey v. Brown, 58 Cal. 180.) In the introductory paragraph of the complaint in this action, it is stated that the plaintiffs, creditors, respectively, of the bank, and as such having a common interest in enforcing the liability of the defendants for and on behalf of themselves and all other creditors of said bank, filed this complaint. And in paragraph 8 it is alleged that the creditors of the bank number more than 1,000; that their names are unknown to the plain *501 tiffs; and that it is impracticable to join them as parties to the action and bring them before the court within a reasonable time. And in the prayer of the complaint the' plaintiffs ask that they be permitted to maintain the action for and on behalf of all the creditors of the bank who will unite with them in the suit, and that an order of the court to that effect and for such purpose be forthwith made. We think the complaint is sufficient on its face to entitle the plaintiffs to prosecute the action for themselves and on behalf of the other creditors of the bank. 3. It is finally urged that the facts stated in the complaint do not bring the plaintiffs within the provisions of section 6036, supra. The complaint sets out the incorporation of the bank; that the individual defendants named are stockholders, giving the number of shares of stock owned by each, with the par value thereof; the insolvency of the bank as above set forth; that the plaintiffs are creditors of the bank and that certificates showing the amount due to them have been issued; that they are the owners of such certificates; and that no part of the amount due to them has been paid. There is also an allegation which purports to set out the pro rata liability of each of the defendant stockholders to the plaintiffs, and in the prayer, amongst other things, judgment is asked in favor of the plaintiffs against each of the individual defendants for the amount of this pro rata. The plaintiffs also ask in the prayer that the liability of the stockholders be ascertained and adjudicated, and that each defendant stockholder be assessed for the benefit of the creditors an amount equal to the par value of his shares of stock, that all sums be ordered paid into court, and that, if necessary, a receiver be appointed to collect and enforce the judgment and distribute the funds under the order of the court. There is also a prayer for general relief. Except as pointed out in paragraphs 1 and 2, above, the defendants have not definitely indicated in what respect they claim the complaint fails to state a cause of action against the individual defendants as stockholders in the bank, although there *502 seems to have been a contention that the plaintiffs had failed to state facts sufficient to bring themselves within the provisions of section 6036, supra, because the complaint failed to show that all the assets of the bank had been exhausted and applied in payment of the claims of its creditors. This contention cannot be sustained. According to the weight of authority, the rule requiring the exhaustion of the corporate assets before resort can be had to the stockholders’ liability has no application where the corporation is otherwise shown to be insolvent. (7 Fletcher’s Cyc. of Corporations, sec. 4332.) The rule stated in the above text was expressly adopted and approved by this court in Skarie v. Marron, ante, p. 295, 253 Pac. 859, and was recognized in Springhorn v. Dirks, 72 Mont. 121, 231 Pac. 912, Barth v. Pock, 51 Mont. 418, 155 Pac. 282, and King v. Pony Gold Min. Co., 28 Mont. 74, 72 Pac. 309. If any of the matters pleaded are surplusage, they will be disregarded in determining the sufficiency of the complaint. (Anderson v. Border, supra.) So with the prayer. It forms no part of the statement of the cause of action. (Donovan v. McDevitt, 36 Mont. 61, 92 Pac. 49.) If it. is broader than the complaint, it will be disregarded. (Arnold v. Sinclair, 11 Mont. 556, 28 Am. St. Rep. 489, 29 Pac. 340.) The court will look to the entire complaint to determine the relief to which a party is entitled. (Leopold v. Silverman, 7 Mont. 266, 16 Pac. 580.) “The facts alleged and not the relief demanded are of chief importance, and they determine the relief to be granted.” (31 Cyc. 111.) We think the allegations of the complaint are sufficient to invoke the aid of the court to enforce the statutory liability of the individual defendants as stockholders of the defendant bank within the rule announced in Barth v. Pock, supra, and Springhorn v. Dirks, supra. Whether the bank was properly joined as a party defendant in this action is not considered, as that question is not *503 now before the court. (Rand v. Butte Elec. R. Co., 40 Mont. 398, 107 Pac. 87.) It is our conclusion that the complaint states a cause of action and that the court was in error in sustaining the demurrer thereto. The judgment is reversed and the cause remanded to the district court, with direction to overrule the demurrer. Beversed and remanded. Mr. Chief Justice Callaway and Associate Justices Myers,’ Matthews and Galen concur.