Sidebilder
PDF
ePub

BANKRUPTCY. STUCKIOLDERS. was claimed she was the owner of $10,000 U. S. SUPREME COURT.

of the stock, upon which it was alleged Mary Sanger, reff. in error is. Chas. W. there was due sixty per cent. The originUpton, Assignee, &c., def’t in error.

al charter required the payment of five Decided October Term, 1875.

per cent. of the capital stock, and that

the balance should be secured in the manThe U. S. District Court upon adjudica- ner prescribed. The amended charter is

ting a corporation bankrupt, and ap. silent upon the subject. The stuck cerpointing an assignee, may make an order requiring stoekholders to pay to the tificates issued by the company set forth assignee an unpaid balance upon the that twenty per cent. was to be paid in stock severally held by them; and such lour quarterly installments of five per order may be made without notice to the cent. each ; "the balance being subject to stockholders, and cannot be attached

the call of the directors, as they may be collaterally The assignee, upon non-compliance with instructed by the majority of the stock

such order, may sue any stockholder, in holders represented at any regular meet an action at law, to enforce his liabili- ing." This was á 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. The capital stock of an incorporated com- appear that any call was ever made by the pany is a fund set apart for the pay

directors or authorized by the stockholdment of its debts, upon which creditors have a lien in equity. As regards creditors, unpaid stock is as much a part of

The plaintiff in error having failed to the assets as any other property of the pay pursuant to the order of court this company, and they have the same rights, suit was instituted by the assignee. co insist upon its payment as upon the Held, 1. The order was conclusive as payment of any other debt dlue the com- to the right of the assignee to bring the pany.

suit. Jurisdiction was given to the disAlthough there was no evidence that defondant subsribed for the stock or made trict court, by the bankrupt act to make any express contract with the company it; it was not necessary that the stockin regard to it, having bought, paid for holders should be before the court when it, (20 per cent.) and received a divi- it was made, any more than that they dend on it, she was liable.

should have been there when the decree In error in the U. S. Circuit Court for in bankruptcy was pronounced. The the orthern district of Illinois.

plaintiff in error cannot in this action The original charter of the Great West question the validity of the order; her only ern Insurance Company, of which de remedy would be a direct application to fendant in error is assignee, fixed its capi- the court for its revocation or modificatal at $100,000, which by an amendment tion. It was competent for the court to 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 shall be made after he shall have debts; it is a substitute for the personal given a certificate that all claims liability which subsists in private copart- for work are included in the pay

ment demanded when he delivers his nerships; when debts are incurred, a contract arises with the creditors that it shall

certificate, is estopped from claim

ing for extra work after receipt of not be withdrawn or applied otherwise than upon their demand. The creditors The clerk of a board of school trustees

the payment so demanded. have a lien upon it in equity; and if di

has no authority to change the effect verted, they may follow it as far as it can

of such a certificate. be traced, except in the hands of bona fide holders, without notice. The creditors

This action was brought on a contract the to

between the school trustees of the Eighth thing else, and the same right to insist Ward, in New York City, and plaintiff

, upon its payment as upon the payment of

to recover for extra work, furnished at any other debt.

the request and with the consent of the 3. By the deed of assignment all prop- the last payment should not be made until

defendants. The contract provided that erty of the company passed to the assignee; he had, by the statute (Sec. 5, 047) the (among other things), a certificate made same right to sue, and in the same form by plaintiff had been filed, “that all as the company. The liability of plain- der, or in connection with, the contract

, tiff in error, and the right of the company 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 4. That although there was no evidence demand in the premises, except the amount that plaintiff in error subscribed for the so agreed upon for extra work.” Plaintiff stock or had made any express contract gave a certificate as provided by the conwith the company in regard thereto, it ap- tract, and the last payment made. pearing that she had bought it, made the

Held, That by giving the certificate, required payment, had received a dividend plaintiff induced the defendant to make and treated it as her own, she was estop- the payment, and is precluded from afterped from denying her ownership.

wards setting up other claims; that the Judgment affirmed.

certificate under the contract amounted Opinion by Swayne, J.

to a waiver of other demands, and as there was no evidence of fraud or mistake, the contract must be carried out accord

ing to its terms. CONTRACT.-ESTOPPEL.

There was evidence given by plaintiff

that the clerk of defendant told him, N. Y. COURT OF APPEALS.

when he signed the certificate, in subCoulter, applt. v. Board of Education stance, that it applied to extra work. No

for the City and County of New such fact was found by the referee before York, respts.

whom the case was tried. Decided December 7, 1875.

Held, That this was not material, be

cause the clerk had no power to change Where a party, under a contract, the effect of the certificate, and because

agrees that no charge for extra work 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." CORPORATIONS-DIVIDENDS.

On July 13, 1872, the directors ordered CONNECTICUT SUPREME COURT OF the 115 per cent. of earnings previous to ERRORS.

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 A corporation having declared a dividend,

stockholder, pro rata, and carried to an payable at such time as the board may account to be known as a surplus fund direct," and credited it to the stock account.” holders on the books, will be compellei, At a subsequent meeting they “ Reby a Court of Equity, at the suit of a solved, that all dividends hereafter made, stockholder, to pay within a reasonable time.

shall be declared from the account known In so far as the dividends are concerned, as the surplus fund account, till the full

the right of the individual stockholders amount of 115 per cent. on the capital is adverse to the corporation and to every stock be paid.” other stockholder ; they become his seve The action of the directors transferring ral and distinct property, which cannot be disposed of or dealt with by the cor- the 115 per cent to the surplus fund acporation without his authority or con- count, was taken without the knowledge sent.

of complainants. Their application to the enhancement of

The dividends were all earned in money the corporate business and property is which came into the treasury from time unauthorized and constitutes no reason to time and were invested, and have confor the corporation's refusing to pay.

tinued to be, as they were earned, in real That the directors have ordered the divi- estate, machinery, tools, &c.; proper and

dends already declared to be transferred necessary to the business, and have been from the individual account of the stockholilers to an account to be known as

in no wise lost or impaired, but exist in a Surplus Fund account, from which the form of the investment stated; the all dividends were to be paid, does not directors acted in good faith in making affect the rights of any stockholder not the investments. assenting thereto.

If the defendant is compelled to pay, The directors of a corporation unreason- within a comparatively short time, the ably refusing, may be compelled to de- whole of the 115 per cent to the stockclare a dividend by a Court of Equity, which may also protect the rights of the holders, the corporation will be required minority of the stockholders, where they to contract its business and encumber its are disregarded.

property to such an extent as to seriously Bill in equity to compel the defendant, impair, if not actually to destroy, its a corporation, to pay over certain divi- credit and business. dends claimed to have been declared by Prior to bringing the action complainthe directors.

ants demanded payment of the dividends. Several dividends had been declared Held, 1. That when defendant declared and paid in cash, and from time to time, the dividends in question, and ordered between July 1867 and July 1870, divi- the amount to be placed, pro rata, to the dends had been declared, amounting in credit of the stockholders, the share of

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., y 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

2. That the proviso that the dividend claiming the right to retain them so should be paid “at such time as the long as they can profitably use borrowed board may direct,” was, in legal effect, money for which they pay no interest, 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 position. of money, and having set the same apart 6. The findings in this case not prefrom its own funds for his sole and senting the details of the investments of separate use, could not thereafter nullify the company with sufficient particularity its votes or repudiate its obligations, by to enable this court safely to name a day for declining to pay the dividend or to name the payment of the declared dividends, the any time when it would pay.

court below is advised to ascertain, upon 3. That in so far forth as the share of further hearing, at what time or times the the profits set to him as a dividend is con- same can be paid without serious injury to cerned, the interests of each stockholder the company, and to decree accordingly. became not only several and distinct Opinion by Pardee., J. from, but positively adverse to, those of every other stockholder and of the corporation itself; that the directors cease to

DEMURRER. represent him in relation thereto, and cannot dispose of or deal with the same MARINE Court, City of New YORK. in any manner without his authority or John Arrell, v. Henry Ossusky and consent, and that the vote of July 13,

Morris Levy. 1872, could in no wise affect his rights to Decided January 15th, 1876. dividends before declared, he not assent. A complaint uniting in one statement ing thereto.

two causes of action, growing out of 4. That the fact that the corporation same act, but against different parmight be seriously injured or perhaps de ties, not demurrable. stroyed if compelled to pay within a short Complaint shows that one Philip Daly time, was not of sufficient force to justify leased to defendant, Ossusky, for two years a denial of the relief demanded, but re- and six months premises in Forty-sixth quires the court to be cautious as to the Street at $28 per month, from February, manner in which the relief shall be 1875, at which time defendant, Levy, begranted.

came surety to P. D. for said rent; that 5. That there can be such a condition on July 31, 1875, plaintiff bought all of things as will justify a court in com- right and title of P. D. in said lease and pelling directors to declare a dividend same was transferred and Ossusky acqui

V.

to

esced, that there is unpaid $58, and de- united in one count the blows struck and mands judgment against both 0. and L. the slanderous words spoken by the de

Defendants demurred to complaint. fendant in one and the same affray. “To

1. That several causes of action have allow,” says the court in Sheldon v. Lake, been improperly united; one being for 9 Abb. N. S., 309, “ the uniting in one rent against tenant, and the other a de- statement of a cause of action consisting mand against surety for such rent. of different trespasses (where they all sub

2. That complaint does not state facts stantially arose out of the same act), such suulicient to constitute a joint cause of ac

as the statement of an assault, an assault tion against defendants.

and battery and false imprisonment, does

not prejudice the defendant, since he may Spencer L. Hillier, atty. for plaintiff.

in his answer confess, deny, or justify Simon M. Roeder, atty. for defendant.

each separate act; while to regard them Held, The defendants contend that as separate causes of action and subjects Henderson Jackson. 9 Abb. N. of different suits, would be allowing an S., 293, is opposed the whole unwarrantable splitting up of controvercurrent of authority. This is besies." lieved to be a mistake. "The weight In Henderson v. Jackson the two causof decision is in its favor, notwithstanding es of action were against one and the same the very pointed case of Anderson v. Hill, defendant, and here they are against dif53 Barb., 238, of which, however, it may ferent defendants. But the reason for not be said that the question of the appropri- allowing a demurrer where they are blendateness of the remedy is not discussed or ed in one count applies with equal force. alluded to in the opinion, although the And until the complaint is made to conobjection was distinctly taken on the form to the requirements of the code and argument of the case. The cases in op- rules of court, the court will not take upposition are Blanchard v. Strait, 8 How. on themselves the labor of ascertaining Pr., 83; Wood v. Anthony, 9 Id., 78; whether two causes of action are in fact Lord v. Vreeland, 13 Abb. Pr., 195; and stated.” 9 Abb. N. S., 296. Cheney v. Fiske 22 How. Pr., 236. This

The assignment of the lease carried with last case, very singularly, is a general it the assignment of the guarantee; and term decision, made in 1860, of the su- the complaint states a sufficient cause of preme court of the same district that action against Levy. made the decision in Anderson v. Hill,

Demurrer overruled, with costs of one supra, but is not referred to in the opinion

demurrer. in the latter case. In Cheney v. Fiske the court says," If a single count or statement

Defendants, upon payment of costs, to of a cause of action, or one that professes

have six days to answer.

Goepp, J. to be that, is found upon examination to contain more than one cause of action, it is not demurrable, although the two caus.

ARREST es, if stated separately, might not be united DISORDERLY HOUSES.

OF JUDGMENT. in one action, but in such case the remedy is by motion. This case decides the SUPREME COURT, GEN. TERM, FIRST precise question raised in Anderson v.

DEPT. Hill, but not passed upon directly,at least Jacobowsky, plff. in error v. The Peoin that case.” 9 Abb. Pr. N. S., 298.

ple, defts. in error. If necessary, Anderson v. Hill may be

Decided January 28th, 1876. distinguished from the present case. It' Motion in arrest of judgment should be

« ForrigeFortsett »