58 Mich. 351 | Mich. | 1885
The bill in this case is filed for discovery and relief. The defendants interposed a general demurrer. A hearing was had in the Saginaw circuit before Judge Gage, and the demurrer was overruled with costs, and defendants appeal to this Court.
The defendant was a corporation duly organized under the laws of this State. The association was formed for “ the manufacture of and dealing in salt, and to engage in the transportation of its products to market.” In 1878 the com. plainant let the defendant have a large quantity of salt, for a portion of which it refused to make payment, and on the 30th day of September, 1881, complainant recovered a judgment therefor against the' association to the amount of $1561.67 damages and $43 costs. This judgment was affirmed on appeal to this Court on the 25th day of January, 1882. Brewer v. Michigan Salt Ass'n 47 Mich. 526.
The bill of complaint, in addition to the above facts, alleges that execution was issued upon the judgment, February 7, 1882, and returned nulla bona, May 3, 1882, and that the judgment remains unpaid ; that the capital stock of the company was $20,000, divided into 800 shares of $25 each, and that there was actually paid in at the time of the organization two dollars per share ; that the company was organized in 1876, and that the articles of association provided for the existence of the corporation for the period of five years; that the association continued in business until March, 1881, and then dissolved by limitation, and it was then the owner of property, including the capital stock paid in, of the value of $20,000; that the offices of the company were located in Bay City and East Saginaw; that the offices of the associ
We do not think the demurrer in this case can be sustained, neither do we think it ought to be. The bill is not properly a creditor’s bill, but more in the nature of a bill for con-' tribution. The suit hereinbefore referred to determined the liability of the defendant to the plaintiff and the extent of the same. The allegations in the bill show that by the articles of association any manufacturer of salt in this State was entitled to become a member of the association by signing its articles of association on its books, and designating the number of shares taken, which might not exceed two shares of the capital stock for every barrel of the average daily capacity of his manufactory, on a fair estimate. Said articles of association and the by-laws provided that there should be paid an annual dividend of twelve per cent, to each stockholder on the amount paid in, payable on the 15th days of July and January of each year, which, together with all losses sustained, and all costs and expenses incurred in handling and selling, together with the inspector’s fees, should be charged up as expenses to the salt handled before a dividend of the proceeds of sale was made.
In 1878 the complainant was not only a manufacturer of salt, but a member of the salt association, and one of its stockholders, owning one share of its stock ; and it was while ho was such member that he sold to the defendant company the salt for the value of which the said judgment was rendered, and which became destroyed and lost to the company. Complainant, however, ceased to be a member of the-
It is insisted by the defendant that the bill should have been filed against those stockholders only who were such during the six months ending December 31, 1878 ; that they only received the proceeds of the 'sales during the six months that the loss occurred, and that they onty should pay the judgment. The judgment not only fixes the liability and its extent, but also the party or parties who' are liable for its payment. The corporation was found to be such party, and not any particular member or members thereof. The property of the corporation was the fund from which the complainant was entitled to have his judgment paid, and so long as it can be traced it is liable for the debts, in the hands of the members of the association, in such manner as is provided by the statute and by-laws of the company. No stockholder is entitled to any of the property of the company until its debts are paid, and he is estopped from denying his liability to the amount of the interest which he has received from the company until such indebtedness is paid, and defendant’s theory to the contrary is untenable. This point is fully discussed in 47 Mich. 526, hereinbefore referred to, and it is unnecessary to repeat the reasons therein given for the conclusions reached, which are conclusive upon the point.
It is further claimed that the bill should have been filed in behalf of all the creditors. There is no force in this, because the bill avers there are no other creditors, and that is taken as admitted by the demurrer.
It is also claimed that the bill does not show that all the stockholders are brought before the court. The bill does show that the defendants were members of the association in 1878, at the time the indebtedness of the complainant arose, and also when the judgment in favor of complainant was rendered, and down to the time of the dissolution of the corporation. It also appears by the bill that they received a portion of the assets, and that the books of the corporation have been fraudulently concealed by the officers for the purpose of avoiding liability of the stockholders, and discovery
In this case the bill states the complainant is the only creditor of this corporation ; that the same was solvent at the time of its dissolution; and its stockholders have in their possession all the funds and assets, and they refuse to apply any portion thereof to the payment of complainant’s debt, and that execution has been returned unsatisfied. This shows the complainant entitled to the relief he prays, and the bill is not subject to the demurrer interposed by defendant.
The decree of the circuit court must be affirmed with costs. Defendant will be allowed to make answer, and the record will be remanded for further proceedings in the. case.