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STOCKHOLDERS. was claimed she was the owner of $10,000 of the stock, upon which it was alleged there was due sixty per cent. The original charter required the payment of five per cent. of the capital stock, and that the balance should be secured in the man
ner prescribed. The amended charter is silent upon the subject. The stock certificates issued by the company set forth. that twenty per cent. was to be paid in four quarterly installments of five per cent. each; "the balance being subject to the call of the directors, as they may be
U. S. SUPREME COURT.
Mary Sanger, reff. in error vs. Chas. W. Upton, Assignee, &c., def't in error. Decided October Term, 1875. The U. S. District Court upon adjudicating a and pointing an assignee, may make an order requiring stockholders to pay to the assignee an unpaid balance upon the stock severally held by them; and such order may be made without notice to the stockholders, and cannot be attached collaterally. The assignee, upon non-compliance with instructed by the majority of the stocksuch order, may sue any stockholder, in holders represented at any regular meetan action at law, to enforce his liabili-ing." This was a regulation of the comty, or he may maintain a bill in equity pany, and not a requirement of either the against all the delinquent stockholders original or amended charters. It did not jointly. appear that any call was ever made by the directors or authorized by the stockholders.
The capital stock of an incorporated company is a fund set apart for the payment of its debts, upon which creditors have a lien in equity. As regards creditors, unpaid stock is as much a part of the assets as any other property of the company, and they have the same rights to insist upon its payment as upon the
Held, 1. The order was conclusive as
payment of any other debt due the com- to the right of the assignee to bring the
suit. Jurisdiction was given to the district court, by the bankrupt act to make it; it was not necessary that the stockholders should be before the court when it was made, any more than that they
should have been there when the decree
Although there was no evidence that defendant subsribed for the stock or made any express contract with the company in regard to it, having bought, paid for it, (20 per cent.) and received a dividend on it, she was liable.
The plaintiff in error having failed to pay pursuant to the order of court this suit was instituted by the assignee.
In error in the U. S. Circuit Court for in bankruptcy was pronounced. The the northern district of Illinois.
plaintiff in error cannot in this action. question the validity of the order; her only remedy would be a direct application to the court for its revocation or modification. It was competent for the court to
The original charter of the Great West ern Insurance Company, of which defendant in error is assignee, fixed its capital at $100,000, which by an amendment was increased to $5,000,000. It became order the payment, as the director, under insolvent and was thrown into bank-direction of the stockholders, might have ruptcy February 6, 1872; the assignee done before decree in bankruptcy, but inapplied to the district court for and pro- asmuch as any regulation or agreement cured an order that the balance unpaid between the stockholders as to the time upon the stock held by the several stock- and manner of payment, or that it shall holders should be paid to the assignee on never be paid, is fraudulent and void as or before August 15, 1872; the assignee to creditors, the court was not bound to gave notice pursuant to the order, and de- regard it, and was fully justified in callmanded payment of each stockholder, ing in the entire balance. the plaintiff in error being away then. It
2. The capital stock of a corporation is
a fund set apart for the payment of its debts; it is a substitute for the personal liability which subsists in private copartnerships; when debts are incurred, a contract arises with the creditors that it shall not be withdrawn or applied otherwise than upon their demand. The creditors have a lien upon it in equity; and if diverted, they may follow it as far as it can be traced, except in the hands of bona fide holders, without notice. The creditors have the same right to look to it as to any thing else, and the same right to insist upon its payment as upon the payment of any other debt.
This action was brought on a contract between the school trustees of the Eighth Ward, in New York City, and plaintiff,
to recover for extra work, furnished at the request and with the consent of the the last payment should not be made until defendants. The contract provided that (among other things), a certificate made
3. By the deed of assignment all property of the company passed to the assignee; he had, by the statute (Sec. 5, 047) the same right to sue, and in the same form by plaintiff had been filed, "that all claims and demands for extra work, unas the company. The liability of plaintiff in error, and the right of the company der, or in connection with, the contract, were legal in their character; the assignee have been presented to the party of the therefore, had a right to sue in an action firs part (defendant). and the amount at law. He might also have filed a bill to be paid therefor agreed upon, by and in equity against all the delinquent share-between them, or a majority of them, and holders jointly (Oglevie & Knox Ins. Co., the party of the second part, and that 22 How., 380). such payment is in full of every claim or demand in the premises, except the amount so agreed upon for extra work." Plaintiff gave a certificate as provided by the contract, and the last payment made.
Held, That by giving the certificate, plaintiff induced the defendant to make the payment, and is precluded from afterwards setting up other claims; that the certificate under the contract amounted to a waiver of other demands, and as there was no evidence of fraud or mistake, the contract must be carried out according to its terms.
There was evidence given by plaintiff that the clerk of defendant told him, when he signed the certificate, in substance, that it applied to extra work. No such fact was found by the referee before whom the case was tried.
4. That although there was no evidence that plaintiff in error subscribed for the stock or had made any express contract with the company in regard thereto, it appearing that she had bought it, made the required payment, had received a dividend and treated it as her own, she was estopped from denying her ownership. Judgment affirmed. Opinion by Swayne, J.
shall be made after he shall have given a certificate that all claims for work are included in the payment demanded when he delivers his certificate, is estopped from claiming for extra work after receipt of the payment so demanded. The clerk of a board of school trustees has no authority to change the effect of such a certificate.
N. Y. COURT OF APPEALS.
Decided December 7, 1875. Where a party, under a contract, agrees that no charge for extra work
Held, That this was not material, because the clerk had no power to change the effect of the certificate, and because the fact was not found.
Judgment of General Term, affirming the aggregate to 115 per cent., which, by judgment entered on report of referee the terms of the resolutions declaring for defendant, affirmed. them, were to be placed, pro rata, to Opinion by Church, C. J. the credit, on the books of the company, of each stockholder, and made payable, without interest, at such time as may be directed by the board."
CONNECTICUT SUPREME COURT OF
On July 13, 1872, the directors ordered the 115 per cent. of earnings previous to July, 1870, "and now standing credited,
Beers et al, vs. Bridgeport Spring Co. pro rata, to each stockholder*** shall Decided January Term, 1875. be taken from the account of each stockholder, pro rata, and carried to an account to be known as a surplus fund account."
A corporation having declared a dividend, payable at such time as the board may direct," and credited it to the stock holders on the books, will be compelled, by a Court of Equity, at the suit of a stockholder, to pay within a reasonable
In so far as the dividends are concern erned, the right of the individual stockholders is adverse to the corporation and to every other stockholder; they become his several and distinct property, which cannot be disposed of or dealt with by the corporation without his authority or consent.
Their application to the enhancement of the corporate business and property is unauthorized and constitutes no reason for the corporation's refusing to pay. That the directors have ordered the dividends already declared to be transferred from the individual account of the stockholders to an account to be known as a Surplus Fund account, from which all dividends were to be paid, does not affect the rights of any stockholder not assenting thereto.
The directors of a corporation unreasonably refusing, may be compelled to declare a dividend by a Court of Equity, which may also protect the rights of the minority of the stockholders, where they are disregarded.
Bill in equity to compel the defendant, a corporation, to pay over certain dividends claimed to have been declared by the directors.
Several dividends had been declared and paid in cash, and from time to time, between July 1867 and July 1870, dividends had been declared, amounting in
At a subsequent meeting they solved, that all dividends hereafter made,
shall be declared from the account known as the surplus fund account, till the full amount of 115 per cent. on the capital stock be paid."
The action of the directors transferring the 115 per cent. to the surplus fund account, was taken without the knowledge of complainants.
each stockholder in the several amounts contrary to their judgment, and therewas thereby severed from the common fore, of course, circumstances may justify funds of the corporation, and became his a court in compelling them to pay diviindividual property; that thenceforth the dends already voluntarily declared (Scott company owed him a debt, payment of v. Eagle Ins. Co., 7 Paige, 203; Pratt v. which, at a proper time, he might de- Pratt, 33 Conn., 456); that one of these mand, and upon refusal enforce by the dividends having been declared more than aid of a Court of Equity. (King v. P. & seven years, another more than six, &c.; H. R. R. Co., 29 N. J., 504; Redfield on the rust of interest meanwhile consuming Railways, 1st ed., 240, 597; Le Roy v. them; the majority still refusing to indiGlobe Ins. Co., 2 Edwds. Chcy., 657.) cate any time of payment; and practically claiming the right to retain them so long as they can profitably use borrowed money for which they pay no interest,
2. That the proviso that the dividend should be paid "at such time as the board may direct," was, in legal effect, that the debt was to be paid within a shows a state of affairs which amount to reasonable time; that the corporation an inequitable infringement of the having declared it, had received for and minority's rights, calling for our interowed to each stockholder a certain sum of money, and having set the same apart from its own funds for his sole and separate use, could not thereafter nullify its votes or repudiate its obligations, by declining to pay the dividend or to name any time when it would pay.
3. That in so far forth as the share of the profits set to him as a dividend is concerned, the interests of each stockholder became not only several and distinct from, but positively adverse to, those of every other stockholder and of the corporation itself; that the directors cease to represent him in relation thereto, and cannot dispose of or deal with the same in any manner without his authority or consent, and that the vote of July 13, 1872, could in no wise affect his rights to dividends before declared, he not assent-A ing thereto.
4. That the fact that the corporation might be seriously injured or perhaps destroyed if compelled to pay within a short time, was not of sufficient force to justify a denial of the relief demanded, but requires the court to be cautious as to the manner in which the relief shall be granted.
5. That there can be such a condition of things as will justify a court in compelling directors to declare a dividend
6. The findings in this case not presenting the details of the investments of the company with sufficient particularity to enable this court safely to name a day for the payment of the declared dividends, the court below is advised to ascertain, upon further hearing, at what time or times the same can be paid without serious injury to the company, and to decree accordingly. Opinion by Pardee., J.
MARINE COURT, CITY OF NEW YORK.
Decided January 15th, 1876.
Complaint shows that one Philip Daly leased to defendant, Ossusky, for two years and six months premises in Forty-sixth Street at $28 per month, from February, 1875, at which time defendant, Levy, became surety to P. D. for said rent; that on July 31, 1875, plaintiff bought all right and title of P. D. in said lease and same was transferred and Ossusky acqui
united in one count the blows struck and the slanderous words spoken by the defendant in one and the same affray. "To allow," says the court in Sheldon v. Lake, 9 Abb. N. S., 309, "the uniting in one statement of a cause of action consisting of different trespasses (where they all substantially arose out of the same act), such as the statement of an assault, an assault and battery and false imprisonment, does not prejudice the defendant, since he may in his answer confess, deny, or justify each separate act; while to regard them
as separate causes of action and subjects Abb. N. of different suits, would be allowing an the whole unwarrantable splitting up of controversics."
In Henderson v. Jackson the two causes of action were against one and the same defendant, and here they are against different defendants. But the reason for not allowing a demurrer where they are blended in one count applies with equal force. And until the complaint is made to conform to the requirements of the code and rules of court, the court will not take upon themselves the labor of ascertaining whether two causes of action are in fact stated." 9 Abb. N. S., 296.
esced, that there is unpaid $58, and de-
2. That complaint does not state facts sufficient to constitute a joint cause of action against defendants.
Spencer L. Hillier, atty. for plaintiff. Simon M. Roeder, atty. for defendant. Held, The defendants contend that Henderson V. Jackson.
S., 293, is opposed to current of authority. This is believed to be a mistake. "The weight of decision is in its favor, notwithstanding the very pointed case of Anderson v. Hill, 53 Barb., 238, of which, however, it may be said that the question of the appropriateness of the remedy is not discussed or alluded to in the opinion, although the objection was distinctly taken on the argument of the case. The cases in opposition are Blanchard v. Strait, 8 How. Pr., 83; Wood v. Anthony, 9 Id., 78; Lord v. Vreeland, 13 Abb. Pr., 195; and Cheney v. Fiske 22 How. Pr., 236. This last case, very singularly, is a general term decision, made in 1860, of the supreme court of the same district that made the decision in Anderson v. Hill, supra, but is not referred to in the opinion in the latter case. In Cheney v. Fiske the court says,' If a single count or statement of a cause of action, or one that professes to be that, is found upon examination to contain more than one cause of action, it is not demurrable, although the two causes, if stated separately, might not be united in one action, but in such case the remedy is by motion. This case decides the precise question raised in Anderson v. Hill, but not passed upon directly,at least in that case." 9 Abb. Pr. N. S., 298.
If necessary, Anderson v. Hill may be distinguished from the present case. It'