5 N.Y.S. 925 | N.Y. Sup. Ct. | 1889
The plaintiff is a judgment creditor of the Illinois & St. Louis Bridge Company, upon whose judgment an execution has been returned unsatisfied. He seeks by this action to enforce an alleged liability of the defendant Eno, who, as a stockholder of that company, received @1,000 of its stock, without consideration, and also @10,000 of its second mortgage bonds, likewise without consideration, which stock and bonds the defendant Eno has disposed of. This action has been previously tried, and judgment rendered in favor of the plaintiff against the defendant Eno, which judgment was affirmed, upon appeal, at the general term; but, upon further appeal to the court of appeals, the judgment was reversed, and a new trial ordered. 12 N. E. Rep. 648. The court held that the plaintiff had failed to make out
By this procedure it is difficult to see how the second mortgage bondholders •of the old company have withdrawn anything from the funds of the old company on account of the bonds. The foreclosure did not realize enough to pay the first mortgage bonds. The purchase price upon such sale was paid by the ■turning in of such first mortgage bonds. The holders of the second mortgage bonds received no dividend upon their bonds from the price realized upon the foreclosure sale. All that they realized was what was given to them of the securities issued by the new company to whom the property of the old company was conveyed. At the. time of this conveyance, the old company had no interest in. the property, and no claims upon it. All the rights of the old company had been foreclosed, and none but the first mortgage bondholders had received any benefit whatever from the securities of the old company which they held. If the parties holding securities of the old company entered into an agreement by which the results of the foreclosure were disposed of in a certain way, the creditors of the old company had nothing to do with this. If they desired to obtain possession of the property of the old company under this foreclosure, they should have bid at the sale; and certainly, as long as there were no proceeds of the property of the old company arising from the foreclosure which could be applied towards the payment of any of these second mortgage bonds, their existence has not operated as any disadvantage to ■the creditors of the old company; and the holders of such bonds cannot be said to have withdrawn anything from the funds of such company on account of the bonds. We are, therefore, of opinion that there is no change made by the evidence, in the legal aspects of the case, from that which existed at the time it was previously decided by the court of appeals, and that the learned ■court below was right in dismissing the complaint. The judgment appealed from should be affirmed, with costs. All concur.