Willius v. Albrecht

ELLIOTT, J. This action was brought by Gustav Willius, as receiver of the Germania Bank, to ’ recover from’. Frn-st Albrecht the sum of $5,000 alleged to be due from him as a stockholder on account of statutory liability upon his stock. The defendant demurred to the complaint, and to each of the two causes of action attempted to be pleaded therein, on the ground that the facts -stated do not constitute a cause of action. The appeal is from an order overruling the demurrers. The arguments have taken a wide--range, and the briefs are very elaborate; but much of the labor.-.of counsel must go for naught, as we are. satisfied that the trial court .was wrong in holding that the cause of action was not barred by the statute of limitations. In ordef to determine this question it is only necessary to consider the history of the proceedings'from July-17, 1899, when it is admitted that the bank was insolvent. ' On July 26,. 1899, Gustav Willius [442] was appointed receiver of the bank on the application of the state superintendent of banks, under Laws 1895, c. 145, as amended by Laws 1897, c. 228. The receiver at once qualified, and has ever since been acting under the appointment, which required him “to enforce all the individual liability of the stockholders of the said bank.” Prior to April 18, 1899, the only method for the enforcement of the individual liability of the stockholders of corporations in this state was by an equitable action brought under chapter 76, G. S. 1894, against all the stockholders. The right to commence this action accrued immediately upon the insolvency of the corporation and before it was known- or determined what amount, if any, the stockholders should be required to pay. Willis v. Mabon, 48 Minn. 140, 50 N. W. 1110, 16 L. R. A. 281, 31 Am. St. 626; Hanson v. Davison, 73 Minn. 462, 76 N. W. 254; Hunt v. Doran, 92 Minn. 426, 100 N. W. 222. On April 18, 1899, and before the appointment of this receiver, Laws 1899, c. 272, was enacted, under which the right of action to enforce the individual liability of the stockholders does not arise until the court has made an order determining the necessity for resorting to such liability, the amount to be paid by each share of stock, and assessing the stock therefor. Chapter 272, Laws 1899, did not repeal sections 16 and 17, c. 76, G. S. 1878. The Revised Laws of 1905 repealed sections 16 and 17 of chapter 76, G. S. 1878; but from the time of the enactment of chapter 272, Laws 1899, until the Revised Laws of 1905 went into effect, the two concurrent remedies for the enforcement of this liability were available to a receiver. The receiver instituted no proceedings to enforce the liability of the stockholders until more than six years after his appointment. He finally applied to the court for an order under the act of 1899, and on September 17, 1903, the court made an order assessing all persons owning stock in the bank. It is conceded that the right of the receiver to maintain the equitable action under chapter 76 was barred after the expiration of six years from the date of his appointment. But the respondent claims that the receiver elected immediately upon his appointment to proceed under chapter 272, Laws 1899, and bring an action at law upon the assessment, should it be found necessary, and that thereafter he was unaffected by chapter 76, and that the statute of limitations did not commence to run against the cause of action until the assessment was [443] made. There is no allegation in the complaint that the receiver, immediately after his appointment, elected to proceed under the act of 1899, nor do we think such an allegation would be material unless the •election was made effective by the 'institution of proceedings. The respondent’s entire argument is destroyed by the failure to distinguish between the cause of action and the remedies provided by the statutes for the enforcement of the cause of action. It may be conceded that the remedies entered, into, and formed a part of the contract; but this applied to the .equitable remedy then existing, as well as to the subsequent remedy. provided for by the act of 1899. These remedies were not inconsistent, and the doctrine of election of remedies has no application. Neither the provisions of chapter 76 in question nor of chapter 273 of the act of Í899 created this cause of action. The latter act merely provided a cumulative remedy for the enforcement of a cause of action.;..It constituted no part of the cause of action. Straw & Ellsworth Mfg. Co. v. L. D. Kilbourne Boot & Shoe Co., 80 Minn. 125, 83 N. W. 36. See Bennett v. Thorne, 36 Wash. 253, 78 Pac. 936, 68 L. R. A. 113; Hunt v. Whewell, 122 Wis. 33, 99 N. W. 599. When this distinction is appreciated, the difficulties of this case disappear. The right to proceed against the-stockholders accrued immediately upon the appointment of the receiver, and the statute of limitations commenced to run against the • cause of action from that date. As said in Ganser v. Ganser, 83 Minn. 199, 86 N. W. 18, 85 Am. St. 461: “It is elementary that the statute of limitations commences to run against a cause of action from the time it accrues and becomes due and payable, or, as ' Otherwise expressed, the cause of action or suit arises according to the universal rule, in courts of both law and equity, Svhen and as soon as the party has a right to apply to the proper tribrmals for relief.’ ” Or, as s.aid in Everett v. O’Leary, 90 Minn. 154, 95 N. W. 901: “A cause of action accrues when the holder of the right to bring the action can apply to the court for relief and is enabled to commence proceedings'to enforce his rights and from this time the statute of limitations' is running.” During six years from the date of the appointment of this receiver he had the unquestionable right to apply to the proper tribunal for relief through the procedure provided by chapter 76, G. S. 1878. The fact that [444] during the same time he had the right to proceed under chapter 272,. Laws 1899, did not prevent the statute from running against the cause óf action. The cause of action had accrued, and the statute of limitations could not be prevented from running by the failure of the receiver to take the steps which were necessary under chapter 272 before an action.of law could be commenced to recover the amount of the assessments. When that time arrived, the cause of action had been barred and was no longer enforceable. Order reversed. On June 4, 1907, the following opinion was filed. PER CURIAM. The respondent filed a petition for á rehearing, and therein availed' himself of the opportunity to reargue the questions which were determined by the court, as well as new questions which were not raised in the original briefs. Recognizing the importance of the case we have given the brief careful consideration, and as we are convinced that the respondent cannot prevail upon the merits there is no necessity for reargument on the part of the appellant. The respondent confuses the distinction which exists between a liability which is imposed by the constitution and a liability which arises out of a contract of subscription to stock. The one is in favor of creditors, the other of the corporation. Cases which have arisen but of attempts to enforce the liability of members of mutual insurance companies are not applicable. The liability there arises when the assessments are made, and the cause of action then accrues. The suggestion that the act of 1899 must be construed to extend the statute of limitations as to assessments made under the acts, is now raised for the first time. It seems to us that it would be a forced construction to hold that the statute 'intended to ingraft an exception upon the statute of limitations. We see no reason for departing from the opinion already filed and the application for a rehearing is therefore denied.