Palmer v. Wood

Opinion of the Court, the Hon. George W. Wall, Judge. This case was before us at the November term, 1890, reported in 40 111. App. 182, under the style of Wood v. Wood, and was reversed and remanded for a reason there stated. The Circuit Court proceeded to another decree and the record is before us again, on the appeal of defendants Wood, Palmer, Ilelmle and Eeisch. The point principally argued is that the court below refused to set down for argument the pleas which had been adjudged bad by the court prior to the former decree. The position is assumed that the reversal of that decree opened the case throughout to be heard de novo. The action of the court in refusing to again consider the pleas amounted in substance to holding them bad, and the question arises whether they should be so regarded. These pleas were on behalf of Helmle, Palmer and Eeisch only. Wood filed neither plea nor answer, and suffered a default to be taken as to him. The first plea set up the decree in the Queenan case as a bar. The second set up as a bar the statute of limitations, five years. The third set up the Queenan decree as a bar as to certain of the present complainants. The complainants referred to in this plea had come into the Queenan case, not as original complainants, but under a notice and order of the court, requiring all creditors having claims similar to those of the complainants filing the bill to appear and manifest their demands. Subsequentty, the court held that this order, under which they came in, was entered without due consideration, and therefore set the same aside and dismissed the parties so brought in, from the case. It is now suggested that this amounts to an adverse adjudication upon their claims, and therefore they are barred. We can not accede to this vieiv. There was no adjudication whatever as to the claims held by these parties. They came in under an order of the court, and they retired under another order of the court, holding the first order to have been inadvertent. Thus, these parties were left in statu quo, and they were in the same position as to the other complainants in the present case, whose names nowhere appeared in the Queenan case. The fourth plea set up the non-joinder of Kblte, Bateman and Johnson, who were also stockholders, as defendants to the bill. Eo error is assigned'as to this plea, specifically, but the subject-matter of it is presented under another assignment of error, which will be noticed further on. The first and third pleas may be considered together, and they are disposed of by our holding, when the case was formerly here, that the Queenan case constituted no bar,to the depositors who'were not parties thereto. Kb argument is presented in support of the second plea, setting up the statute of limitations five years, and we may perhaps assume counsel to concede the plea is not good. A pure plea, as known in chancery practice, must set up some matter not appearing on the face of the bill. Story’s Eq. PL Sec. 660. Anomalous pleas, or pleas not pure, rely upon matters stated in the'record, and upon denials and negations of matters of fact contained therein, which denials and negations, if true, constitute a sufficient defense against further proceedings in the suit. Ib. 667. When the objection, that the statutory period has elapsed, appears on the face of the bill, a demurrer will lie. If it does not so appear, a plea will be proper. Ib. 751. Assuming that the relief here sought would be barred by the statute of limitations five years, the objection appears on the face of the bill. Hence, the plea was unnecessary, and according to strict rules of equity pleading, improper. The ¡dea here filed was not a “ pure ” plea, for it was not founded on new matter not apparent on the face of the bill; nor did it answer the description of an “ anomalous ” plea. It appears from the evidence, and the report of the master, that in proof of each claim, the depositor produced a pass-book, or a certificate of deposit. In Fleisher v. Rentchler, 17 Brad. 402, which was a proceeding at law upon a liability similar to that here involved, it was held that the written evidence contained in a certificate of deposit, issued by the bank, was as binding upon the stockholder as upon the corporation, and that the action ivas not barred until after the lapse of ten years; and in Schalucky v. Field, 124 Ill. 617, it was so held as to the written evidence contained in a depositor’s pass-book. , In the present case the lapse of five years would not bar the remedy. If the proceeding were at law the limitation would be ten years. In equity, where there is concurrent jurisdiction with courts of law, the statute of limitations would be equally binding. But there are many cases where it is said that equity acts not so much in obedience to the law of limitations, as in analogy to it. Aside from the cases where the statute maybe applied, lapse of time will, in many cases, constitute a bar to equitable relief. Where resort is had to chancery to enforce a statutory liability, it is quite clear the statute of ten years should be applied, and that no delay short of that time should hinder the proceeding. This view will also dispose of the argument in behalf of appellants, that the remedy is barred by lachas, the bill being filed some eight years after the bank suspended. It is objected that appellants are credited with the amounts paid by them in the Queenan case without anything in the pleadings upon which to base such credits; that this action is purely voluntary, a mere matter of grace and favor, and without evidence in the record on which to ascertain the proper amounts. As it is not objected that the proper amounts were not really credited, we see nothing here of which appellants may complain; but it appears that the master’s report upon which the court acted contains among other matters a copy of the decree in the Queenan case from which the amounts adjudged against each of the defendants in that casé can be ascertained. The objection is also made that Tracy and Salter were dismissed. This is met by the finding of the decree that they took no appeal from the former decree, and that they paid the amounts adjudged against them. These two were small stockholders, each having ten shares. Tracy was a party to the Queena-n ca'se, and presumably might have been credited in this case with what he paid in that; but he preferred to pay rather than to join in the former appeal. Salter was not a party to the Queenan case. The amounts paid by these two stockholders, aggregating §383, were deducted from the total of the amounts due complainants. It is not suggested that the total for which these two were liable would exceed the amount they paid; nor that the appellants have suffered any substantial increase of their burden by reason of this action of the court. If any such there be, it is quite unimportant in amount, and in the absence of a specific objection at the time when the order of dismissal was made, should not be regarded as a ground for reversing the decree. It is objected that John S. Bradford was dropped from the case. The decree finds that after the cause was submitted, and while under advisement, John S. Bradford died, and that his administrator had not been appointed; therefore it was ordered that as to said Bradford, the bill be dismissed. This was necessary unless the court entered its decree nunc pro fame, which it might have done, and perhaps would have done, if moved so to do by the complainants, or possibly by the surviving defendants. The effect is the same as though Bradford had never been made a party defendant, and in this connection we may notice the objection that Nolte, Bateman, Johnson and other stockholders were not made defendants. The question is, whether a number of depositors may jointly file a bill in chancery against a part only of the stockholders, or whether a decree against such stockholders will be fatally defective because of the non-joinder of the others. We held in this case, when it was formerly in this court, that the administrator of a deceased stockholder might successfully plead the statute of limitations two years, as to the estate in his hands to be administered, and it is apparent there may be various circumstances, which would work great hardship to the depositor, if all the stockholders must be joined. It has been held that a creditor of a corporation may, after judgment against it, and return of execution nulla bona, file a creditor’s bill against one or more stockholder’s, delinquent for non-payment of stock subscriptions. It is not indispensable that all should be joined. Yet, in such case the delinquent stockholder may, by cross-bill, bring in other delinquent stockholders and enforce contribution. Clapp v. Peterson, 104 Ill. 26; Young v. Farwell, 139 Ill. 326; Hatch v. Dana, 101 U. S. 205; Cook on Stock & Stockholders, Sec. 206, and cases cited in note 3. The authorities are, however, not uniform. We are inclined to hold that where, as in this case, the proceeding is merely to reach the statutory liability of stockholders, and where the complainants do not seek, and are not required to seek, relief by winding up the corporation, it is not necessary that all the stockholders should be made parties to the bill. Those who are brought in may, perhaps, by cross-bill, and certainly by independent suit, reach their fellow-stockholders and enforce contribution, but the depositors should not bo required to await the result of that controversy. Various questions might arise between the stockholders, the adjustment whereof would bring delay, to which the depositors should not be subjected. The litigation might be prolonged, necessarily or collusively, by disputes, not concerning the creditors, until they, despairing of the end, would accept whatever they could get by compromise. The ben'efit of the statutory liability would thus be greatly impaired. As was said in Marsh v. Burroughs, cited in Hatch v. Dana, supra, referring to liability for unpaid subscriptions: “ If a creditor were to be stayed until all such parties could be made to contribute their proportionate share of the liability, he might never get his money.” E-ules of practice that might well apply to ordinary cases, requiring all persons interested to be brought in, should not apply in cases like this. All such rules are for the furtherance of justice, and as new cases and new conditions arise, should be so moulded or modified as to attain that end. Cook on Stock & Stockholders, Secs. 223 and 224. It is also urged that the decree took no account of the assets of the corporation, assuming it had something valuable in that respect. As was settled by the ruling of the Supreme Court in Queenan v. Palmer, 117 Ill. 619, the “ losses,” for which these stockholders are liable, are not to be ascertained by deducting the assets of the corporation from the claims of depositors, but the latter may seek from the stockholders full payment of whatever is due from the corporation. The liability of the stockholder is regarded as primary, and he must make good the unpaid balance due the depositor, regardless of what might be realized from the corporate assets. We find no substantial error in the record, and the decree will be affirmed.