United States Supreme Court Cases & Opinions

U.S. Supreme Court

Hancock National Bank v. Farnum, 176 U.S. 640 (1900)

Hancock National Bank v. Farnum

No. 89

Argued December 21, 1899

Decided March 12, 1900

176 U.S. 640

Syllabus

A plaintiff, after the recovery of a judgment against a Kansas corporation in the courts of Kansas and the return of an execution unsatisfied, can maintain an action in any court of competent jurisdiction against a stockholder of the corporation to recover in satisfaction of his judgment an amount not exceeding the par value of the defendant's stock. Whitman v. Oxford National Bank, ante, 176 U. S. 563, followed to this point.

The action of the Supreme Court of Rhode Island in failing to recognize such right in the plaintiff in error can be revised by proceeding in error in this Court.

The judgment rendered in the Kansas court is in that state conclusive against the corporation, as well as binding upon the stockholder, and, under the Constitution and laws of the United States, it should have the like force and effect in other states when attempted to be enforced in their courts.

The facts of this case are these: the plaintiff in error, plaintiff below, a creditor of the Commonwealth Loan & Trust Company, a corporation duly organized under the laws of the State of Kansas, recovered a judgment on December 8, 1893, in the Circuit Court of the United States for the District of Kansas against the corporation for the sum of $16,136.76 debt, and $28.45 costs of suit. Thereafter, on April 27, 1894, an execution was issued on the judgment, and after due search and diligence, no property of the corporation could be found to be taken in satisfaction thereof, and it was returned wholly unsatisfied. The corporation was not a railway, religious, or charitable corporation. The defendant is a stockholder in that corporation, holding ten shares of the capital stock of the par value of $100 each, and appearing as such stockholder on the books of the corporation. Setting forth these facts with further detail of the provisions of the Kansas Constitution and statutes, the plaintiff filed its declaration in the Common Pleas Division of the Supreme Court of Rhode Island to recover a judgment for a sum equal to the amount of defendant's stock. To this declaration a demurrer was filed

Page 176 U. S. 641

and sustained and judgment entered for the defendant, 20 R.I. 466, to reverse which judgment the plaintiff sued out this writ of error.