BANKRUPTCY. U. S. SUPREME COURT. 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 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 adjudica- ner prescribed. The amended charter is ting a corporation bankrupt, and ap- silent upon the subject. The stock cerpointing an assignee, may make an order requiring stockholders 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 four 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 collaterally. the call of the directors, as they may be 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. 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 ers. 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 payment of any other debt due the company. 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. Held, 1. The order was conclusive as 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 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 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 stockholders should be paid to the assignee on or before August 15, 1872; the assignee gave notice pursuant to the order, and demanded payment of each stockholder, the plaintiff in error being away then. It and manner of payment, or that it shall never be paid, is fraudulent and void as to creditors, the court was not bound to regard it, and was fully justified in calling in the entire balance. 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. shall be made after he shall have given a certificate that all claims payfor work are included in the ment 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. This action was brought on a contract between the school trustees of the Eighth Ward, in New York City, and plaintiff, Ward, in New York City, and plaintiff, to recover for extra work, furnished at the request and with the consent of the defendants. The contract provided that 3. By the deed of assignment all prop- the last payment should not be made until 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- claims and demands for extra work, under, 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). 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. CONTRACT.-ESTOPPEL. N. Y. COURT OF APPEALS. Decided December 7, 1875. Where a party, under a contract, agrees that no charge for extra work 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. 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. Opinion by Church, C. J. CORPORATIONS-DIVIDENDS. them, "were to be placed, pro rata, to 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." 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." 66 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 time. In so far as the dividends are concerned, 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. solved, that all dividends hereafter made, At a subsequent meeting they "Re 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. The dividends were all earned in money which came into the treasury from time to time and were invested, and have continued to be, as they were earned, in real estate, machinery, tools, &c., proper and 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 stock-necessary to the business, and have been holders 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. The directors of a corporation unreason ably 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. If the defendant is compelled to pay, within a comparatively short time, the whole of the 115 per cent. to the stockholders, the corporation will be required to contract its business and encumber its property to such an extent as to seriously impair, if not actually to destroy, its credit and business. Prior to bringing the action complainants 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 funds of the corporation, and became his individual property; that thenceforth the company owed him a debt, payment of which, at a proper time, he might demand, and upon refusal enforce by the aid of a Court of Equity. (King v. P. & H. R. R. Co., 29 N. J., 504; Redfield on Railways, 1st ed., 240, 597; Le Roy v. Globe Ins. Co., 2 Edwds. Chey., 657.) fore, of course, circumstances may justify a court in compelling them to pay dividends already voluntarily declared (Scott v. Eagle Ins. Co., 7 Paige, 203; Pratt v. Pratt, 33 Conn., 456); that one of these dividends having been declared more than seven years, another more than six, &c.; the rust of interest meanwhile consuming them; the majority still refusing to indicate 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 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. 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. 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 DEMURRER. MARINE COURT, CITY OF NEW YORK. Decided January 15th, 1876. complaint uniting in one statement two causes of action, growing out of same act, but against different parties, not demurrable. 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 esced, that there is unpaid $58, and demands judgment against both O. and L. Defendants demurred to complaint. 1. That several causes of action have been improperly united; one being for rent against tenant, and the other a demand against surety for such rent. 2. That complaint does not state facts suflicient to constitute a joint cause of action against defendants. 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 sies." Spencer L. Hillier, atty. for plaintiff. Simon M. Roeder, atty. for defendant. Held, The defendants contend that Henderson V. Jackson. 9 Abb. N. of different suits, would be allowing an S., 293, is opposed to the whole unwarrantable splitting up of controvercurrent 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 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. Demurrer overruled, with costs of one demurrer. 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, 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 caus Defendants, upon payment of costs, to have six days to answer. Goepp, J. es, if stated separately, might not be united DISORDERLY HOUSES. in one action, but in such case the reme OF JUDGMENT. ARREST dy is by motion. This case decides the SUPREME COURT, GENL. TERM, FIRST "" 9 Abb. Pr. N. S., 298. If necessary, Anderson v. Hill may be DEPT. Jacobowsky, plff. in error v. The People, defts. in error. Decided January 28th, 1876. distinguished from the present case. It' Motion in arrest of judgment should be |