Jones v. Wiltberger

McCay, J. 1. We do not doubt but that the defendant in this action, Mr. Wiltberger, may defend by showing that he has discharged himself from the liability cast upon him, as a stockholder, for the ultimate redemption of the deposits; nor do we think it at all material to the plaintiff in the suit how that liability was discharged. If he has taken up, cancelled, destroyed, an amount of the deposits due, equal to his proportionate share of the whole amount, he has performed his undertaking, complied with the obligation the charter imposes. What is it to the plaintiff whether he has paid the full amount, or less than that, to each depositor? That is with him and them. The case of Belcher vs. Wilcox, 40th Georgia Reports, 391, was a bill for the distribution of assets, too, of an insolvent corporation which had been assigned in trust, and we held that they were to be distributed among the holders of the bills, on principles of equity. But this is suit upon a statutory liability. The parties stand upon their legal rights, and it is none of the plaintiff’s business to inquire how the stockholder has settled with other depositors. All he can demand is, that he shall have discharged his proportionate share. 2. As to the other question made in the record, to-wit: that the Court below did not restrict Mr. Wiltberger, is his proof of claims discharged, to a period before the commencement of this suit, I am free to say that I have had some trouble in arriving at a conclusion satisfactory to myself. The language of the charter is as follows: “ The persons composing the company shall be held and bound in their private capacity, in proportion to the number of shares held by each and every one of them, for the ultimate redemption of all deposits made with said company, and which may remain unpaid by said company during the time that any such persons shall remain stockholders.” Upon clauses very similar to this, in banks of issue, this [579] Court has held that the stockholder may discharge himself by paying his proportionate share of any of the outstanding bills. He is not bound to each bill-holder for his proportionate share of that bill, but any suing bill-holder may recover of any stockholder until that stockholder has paid up his proportionate share, and that stockholder so paying to the full amount of his proportion, is discharged. Lane vs. Harris, 16 Georgia Reports 231; Robison vs. Bank of Larien, 18 Georgia Reports, 109; Belcher vs. Wilcox, 40 Georgia Reports, 396. I see no reason why this same rule should not apply here. It is indeed the only rule that enables a Court of law to settle the matter at. ail, and the only way even the parties can settle, without a resort to a general suit in equity. I think, therefore, our Courts have acted wisely, both for the creditors and. the stockholders, in giving these liability clauses this interpretation. But how far is this right to sue separately and to settle separately to go ? It is at best but a construction of the law. Literally, it would require all the creditors and debtors to come together, and each to pay his share and get his money. Doubtless, too, it is in the power of any person at interest, to call all the parties at interest into a Court of Equity for a settlement. But whilst for convenience and for justice we give this construction to the statute, which permits any one of the holders to sue, and the stockholder to pay any one, we must take care that we do not fritter away the law altogether, that we do not put a weapon in the hands of the stockholder with which he may treat at his pleasure with the depositor, and force him to his own terms. Let it be understood that it is in the power of a stockholder after a suit is brought to discharge himself by paying his full share to others than the plaintiff in the suit, and who will dare to sue? The stockholder may say to the depositor, “I offer you ten cents in the dollar. If you sue I will pay my proportion to others, and you will fail in your suit.” [580] Take the case of this very plaintiff. He was not paid; he brought suit. Mr. Wiltberger has paid his proportion, much of it since the suit was brought, to others, and the plaintiff has failed. To-morrow he sues Mr. Smith; he does the same thing, and the depositor fails again, and so on and on, until he is made the tug which pulls everybody into port, but himself, and when, at last, all are in and his share must be paid, the costs and trouble have exhausted twice the demand. What sort of a liability is this ? What sort of protection is this ? Could this have been contemplated by the Legislature, or by the Courts in the construction they have given these clauses? Were this the plain letter of the Act, as a matter of course, it would have to be followed. But, both the right of one to sue, and of the stockholder to pay up his proportion to such of the depositors as he pleases, are constructions put upon the law so that it may be effective for the creditor and not oppressive for the stockholder. I am aware that the logic of this construction, if carried out, leads to the position occupied by the Chief Justice, in his dissenting opinion. If it be the technical measure of his statutory liability that he may pay whom he pleases, only so that he discharges his proportionate share, then, I see nothing in the mere bringing of a suit by one that shall make it necessary to pay him, rather than others. But, as I understand the law, this is not, technically and accurately, the measure of his liability. The rule, that one may sue and recover, and that the stockholder may discharge whose claim he pleases, is not in the clause. It is an equitable interpretation put upon it by the Courts, in order that it may work more conveniently for both parties. And my judgment is, that the Courts, in making this interpretation, must guard it so that it will not give an unconscientious advantage to the stockholders. This construction of the rule, or rather the construction without this limitation, does give that advantage, and I cannot assent to it. My judgment is, that after any depositor or bill-holder has commenced his [581] suit, the defendant must see to it that the plaintiff is satisfied before he can discharge himself by paying up his proportionate shai’e. I see plainly enough the force of the argument; that, as the day before the suit was commenced, the stockholder might discharge himself by paying others than this particular depositor, it is giving an unusual effect to the mere bringing of the suit to make it work so as to prevent the stockholder taking the same course after suit as before. I see, too, that this, apparently, introduces a rule of preference between the depositors, dependent upon their bringing suit, which is not in the statute. But as I have said, the right of one depositor to recover all of his deposit, or the right of the stockholder to do otherwise than to pay to each depositor his proportionate share of that deposit, is not in the statute either. It is a construction by the Courts in furtherance of the policy and intent of the statute. And my judgment is that this construction ought to be limited by the same public policy as I have suggested. As to the preference which the rule we lay down gives to the depositor who sues, I can only say that it is a preference all admit to him after his judgment, and is perhaps a proper reward of his superior diligence. Should a question arise between the depositors, I am not prepared to say that any depositor or stockholder may not, in equity, call in the whole fund, and the whole indebtedness for an equitable and equal distribution. 3. As to the other points, we think, in the main, the Court below was right. The assignee is the agent of the creditors of the bank. His statement of the debts and his transactions in their liquidation, are evidence against the creditors, prima fade, at least. He was the proper person to take up from Mr. Wiltberger these cancelled certificates, and to judge of their cancellation. There is no charge of fraud or collusion. Indeed, these certificates are not discharged until they are delivered to the bank or its representative. [582] The judgment is, however, reversed by the majority of the Court, on the ground that the Court erred in holding that Wiltberger could discharge himself from the plaintiff’s claim by paying, after notice of the suit, to other depositors than the plaintiff, an amount equal to his full proportionate share of all the indebtedness by the bank to depositors. Judgment reversed.