Walterscheid v. Bowdish

.The opinion of the court was delivered by Smith, J.:

It is first contended that, as sections 1302 and 1315 of the General Statutes of 1901 were repealed ,by chapter 152 of the Laws of 1903, no law existed imposing an obligation upon the plaintiffs in error, and no law existed providing any remedy for the enforcement of the obligation, if an obligation existed. Condensing the facts related, it will be observed that Burnham, Hanna, Munger & Co. commenced an action in July, 1894, against one Dixon to recover on an account, and that the Wichita Plumbing and Pump Company interpleaded in the action, having purchased the business and assumed the indebtedness of Dixon, and judgment was rendered against the Wichita Plumbing and Pump Company in October, 1900. In July, 1901, the B. & C. Pump Manufacturing Company having succeeded to all the property and rights of the Wichita Plumbing and Pump Company and having assumed and agreed to pay all its indebtedness, Burn-ham, Hanna, Munger & Co. commenced an action against the B. & C. Pump Manufacturing Company on their judgment, and recovered judgment therein against the last-named company in April, 1904. Prior to the commencement of the action against the B. & C. Pump Manufacturing Company, Charles and William Walterscheid became the owners of all the capital stock of the company, bought all its property and assets, and assumed all its liabilities. The action, however, of Burnham, Hanna, Munger & Co. against the B. & C. Pump Manufacturing Company continued pending until the 4th day of April, 1904, when they recovered judgment and soon thereafter had execution issued thereon, which was returned unsatisfied; and In September, 1904, the defendant in error was appointed *671 receiver of the B. & C. company, and in November, 1904, was ordered to bring this action under section 1302 of the General Statutes of 1901.

The .controversy then depends upon whether the liability of the plaintiffs in error was an obligation imposed by the statute and expiring with' the statute or whether it was founded in contract and was beyond the power of the legislature to affect. The question was answered in Stocker v. Davidson, 74 Kan. 214 , 86 Pac. 136 , a portion of the syllabus of which reads:

“In this state the statutory liability of a stockholder to pay upon the debts of the corporation an amount in addition to his subscription equal to the par value of his stock becomes an asset of the corporation in the event of its insolvency; the liability is one arising upon contract; the right of action to enforce it is.one arising upon contract.”

The Stocker case proceeds to decide that the liability may be enforced by a trustee in bankruptcy under the bankruptcy act of the United States, and holds that a receiver is not necessary under the laws of the state. It does not, however, hold that a receiver.may not have the same rights as the trustee in bankruptcy, and as each is an arm of the court in collecting and converting the assets of the corporation into funds to pay its indebtedness it seems apparent that a receiver appointed under the laws of the state has the same rights and powers, so. far as is material to this case, as a trustee in bankruptcy. It is said in volume 26 of the American and English Encyclopaedia of Law, at page 746:

“The repeal of a statute has no effect on those rights and interests which have accrued under it, and which are past and closed; nor are any liabilities incurred under the repealed statute affected by the repeal, unless either they are released by the repealing statute, or the repeal includes the remedy of enforcing the liability.”

(See, also, Memphis v. United States, 97 U. S. 293 , 24 L. Ed. 920 .)

*672 This court said, in Watkins v. Glenn, 55 Kan. 417 , 40 Pac. 316 :

“Any subsequent law of the state which so affects the remedy as substantially to impair and lessen the value of the contract is forbidden by article 1, section 10, of the constitution of the United States, which ordains that ‘no state shall . . . pass any . . . law impairing the obligation of contracts.’ ” (Syllabus.)

We therefore hold,' following the cases of Stocker v. Davidson and Watkins v. Glenn, supra, that, although the act of 1903 purported to repeal both the obligation and the remedy, that act was not operative as to this case. Not only did the obligation arise out of contract, but the remedy had been invoked under the statute before the repealing act was passed, and without the remedy the contract itself would be so far impaired as to be valueless. Neither the obligation nor the remedy is therefore affected by the repealing statute. A general saving clause, found in section 7342 of the General Statutes of 1901, seems also sufficient to sustain this construction. It reads:

“The repeal of a statute does not revive a statute previously repealed, nor does such repeal affect any right which accrued, any duty imposed, any penalty incurred, nor any proceeding commenced, under or by virtue of the statute repealed.”

Another contention of the plaintiffs in error is that this action at the commencement thereof was barred by the three-year statute of limitation. It will be observed that the liability of the Wichita Plumbing and Pump Company to Burnham, Hanna, Munger & Co. rested upon, and could only be ascertained by establishing, the liability of Dixon, and the liability of the B. & C. Pump Manufacturing Company depended upon the liability of the Wichita Plumbing and Pump Company, and the liability of the plaintiffs in error depended upon the liability of the B. & C. Pump Manufacturing Company. And, although it took years to *673 establish these successive liabilities, it is not suggested that the proceedings were not carried on regularly, and only a short time intervened between the taking of the several steps necessary thereto. The judgment against .the Wichita Plumbing and Pump Company was obtained October 23, 1900, and the action against the B. & C. Pump Manufacturing Company was commenced about nine months thereafter and judgment was obtained on the 4th day of April, 1904. This action against the plaintiffs in error was commenced about seven months thereafter. So it seems that the successive steps to establish the liability of the plaintiffs in error were taken without unnecessary delay, it being conceded that the only remedy, if any remedy existed, was under section 1302 of the General Statutes of 1901. (Waller v. Hamer, 65 Kan. 168 , 69 Pac. 185 ; Henley v. Stevenson, 67 Kan. 4 , 72 Pac. 518 . See, also, Weaver v. Haviland, 142 N. Y. 534 , 37 N. E. 641 , 40 Am. St. Rep. 631 .)

Again, it is urged that the judgment rendered is not supported by facts, is not such a judgment as the law authorizes, and is contrary to law. It is conceded that the action should have been brought jointly against the plaintiffs in error, but it is urged that the judgment should have been rendered against each separately, in proportion to the amount of his stock; in other words, that under his double liability judgment should have been rendered against Charles Walterscheid for $12,600, and against William Walterscheid for $4850, whereas judgment was rendered against them jointly for about $400. There is no suggestion that there were any other creditors of the B. & C. Pump Manufacturing Company, or that it required any more than the amount of the judgment in favor of Burnham, Hanna, Munger & Co. entirely to close up the affairs of the B. & C. company. The plaintiffs in error do not seem to have been prejudiced because a much smaller judgment was rendered against the two jointly than might *674 have been rendered, if the circumstances required it, against each severally.

The plaintiffs in error also complain against including in the judgment the amount of the receiver’s fees. These fees were proper costs of the action and there is no cause of complaint.

Finding no. error in the judgment or proceedings to the prejudice of the plaintiffs in error, the judgment is affirmed.