People's Home Savings Bank v. Rauer

This is an action to recover the unpaid portion of the subscription price of stock in the plaintiff corporation. Plaintiff recovered judgment, in the trial court, and this appeal is from the order denying defendant's motion for a new trial, and comes here upon a statement of the case and the judgment-roll.

It appears by the statement that plaintiff was a savings and loan corporation from the year 1888 to the twentieth day of January, 1895, when it went into liquidation, in accordance with the provisions of the act entitled: "An Act creating a Board of Bank Commissioners, and prescribing their duties and powers." (Stats. 1895, p. 172, c. 167.) On the third day of January, 1895, two certificates aggregating twenty-four shares of the capital stock of the corporation were surrendered, and twenty-four shares were issued to defendant in his name and receipted for by him, and his name was entered in the stock transfer book, stock journal, and stock ledger. The receipt signed by Rauer was on the stub from which the certificate was detached, which showed that the stock was one-third paid up, and the receipt recited that the certificate was received subject to the articles of incorporation and by-laws of the company. As a matter of fact, however, Rauer took the stock as collateral security for money loaned to one of the former owners thereof, but this does not in any way appear upon the books of the corporation. The plaintiff was insolvent, and the entire amount of the unpaid portion of the subscription price of its stock was not sufficient to pay *Page 447 its liabilities. On August 28, 1895, the bank commissioners, by resolution, ordered the board of directors to levy an assessment for the full amount of the unpaid capital stock, but, instead of levying such assessment, the board of directors issued a call for the unpaid portion of capital stock. This call was duly published, and notice given by mail to each stockholder.

Appellant discusses the case in his brief as though it were an action to enforce a stockholder's statutory liability under section 322 of the Civil Code, which it is not, and the cases cited under this head have no application to the case at bar. This is a suit by the corporation to recover, under a call, the unpaid portion of the subscription price of its stock. Such a suit may be maintained by the corporation against either the original shareholder or his transferee. (People's Home Sav.Bank v. Sadler, 1 Cal.App. 189, [81 P. 1029].) It is urged, however, that this suit will not lie because defendant in fact held the stock as collateral security only, and again, defendant relies on section 322 of the Civil Code, quoting that portion of the section which says: "Stock held as collateral security or by a trustee, or in any other representative capacity, does not make the holder thereof a stockholder," but omitting the words which immediately follow in the same sentence, to wit, "within the meaning of this section." An examination of this section discloses that it deals entirely with the statutory liability of stockholders for their proportion of the corporate debts, and has nothing to do with their liability for the unpaid portion of the capital stock. The true rule as to the liability of stockholders for the unpaid portion of its capital stock is laid down in Baines v.Babcock, 95 Cal. 581, [29 Am. St. Rep. 158, 27 P. 674, 30 P. 776], where it is said: "It seems to be well settled that one to whom stock is issued by the corporation, and who has the same placed in his name on the corporation books as the owner, is liable to the creditors of the corporation as though he were the absolute owner, and this whether he was in fact a pledgee, agent, or trustee for the real owner." To the same effect seeBank v. Case, 99 U.S. 631; Cook on Stockholders, secs. 247-253; Thompson on Stockholders, sec. 223; Thompson v. Bank,19 Nev. 103, [7 P. 68], and note to same case in 3 Am. St. Rep. 865; Herrick v. Wardwell, 58 Ohio St. 294 50 N.E. 903; *Page 448 Cutting v. Damerel, 23 Hun, 339; and Pauly v. State Loan etc.Co., 165 U.S. 606, [17 Sup. Ct. 465], although in this latter case it was held that, where the certificate on its face showed that the holder was a pledgee, he could not be held under a provision of the United States Revised Statutes in relation to national banks. This last case, however, completely sustains the rule that one who appears on the books to be the owner of the stock is liable, though he may in fact be a pledgee or trustee only as between himself and the real owner.