Whitman v. Atkinson

Citations

• 130 F. 759
• 65 C.C.A. 185
• 1904 U.S. App. LEXIS 4217

Syllabus

<p>1. Federal Courts — Statutory Liability — Rules or Decision.</p> <p>Where a cause of action is created by a state statute, the question when the right of action accrues, and what conditions authorize its enforcement, is one of judicial construction, as to which the decisions of the highest court of the state are controlling on the federal courts.</p> <p>2. Corporations — Insolvency — Stockholders’ Liability — Statutes — Construction — Limitations.</p> <p>Kan. Gen. St. 1889, e. 23, § 32, provides that, after an execution has been issued against a corporation and returned nulla bona, an execution may be issued on an order of court against stockholders to an extent equal in amount to the amount of his stock, or plaintiff in the execution may proceed by action to charge the stockholder with the amount of his judgment. Section 44 provides that if such corporation be dissolved, leaving debts unpaid, suits may be brought against stockholders at the time of the dissolution, and by another section the corporation is declared dissolved for such purposes when it has suspended business for more than a year. Under the decisions of the state courts, a creditor of a moneyed corporation may proceed by action to enforce the stockholder’s liability under section 44 immediately after the expiration of a year from the date of suspension of business without recovering judgment against the corporation, the right being complete on the corporation’s dissolution. Beld, that a creditor was not entitled to delay suit against a stockholder under section 44 while he was maintaining a suit against the corporation under section 32, and obtaining the return of executions unsatisfied, and hence the maintenance of such proceedings did not suspend the statute of limitations against an action against stockholders under section 44.</p> <p>j[ 1. State laws as rules of decision in federal courts, see notes to Griffin v. Overman Wheel Co., 9 C. C. A. 548; Wilson v. Perrin, 11 C. C. A. 71; Hill v. Hite,