197 Mass. 443 | Mass. | 1908
This is an action of contract to recover the amount of an assessment levied upon the defendant as a stockholder in the Minnesota Thresher Manufacturing Company, a foreign corporation, by the laws of whose domicil his liability must be determined. New Haven Horse Nail Co. v. Linden Spring Co. 142 Mass. 349, 355. Article 10, § 3, of the constitution of Minnesota, provides: “ Each shareholder, in any corporation, except those organized for the purpose of carrying on any kind of manufacturing or mechanical business, shall be liable to the amount of stock held or owned by him.” If the company comes within the exception, this provision is inapplicable. But, while there is much weight in the defendant’s argument that, the mercantile purpose of reorganization having been to take over the assets and to continue the manufacturing business of the old concern, whose creditors were to be paid in preferred stock of the new company, its stockholders are exempt, this question must be- considered as no longer open under the adverse decisions of the Supreme Court of Minnesota, in State v. Minnesota Thresher Manuf. Co. 40 Minn. 213, and Merchants' National Bank v. Minnesota Thresher Manuf. Co. 90 Minn.
But it was decided in the cases of Minneapolis Base Ball Co. v. City Bank, 66 Minn. 441, and Hale v. Allinson, 188 U. S. 56, that, under the equitable remedy provided by this chapter, as the action must be brought in behalf of all creditors against the corporation-and delinquent stockholders over whom the court had jurisdiction, the receiver appointed to collect the assessments had no authority by virtue of his office to proceed against non
By the provisions of the supplemental act, where a receiver had been appointed, the court was authorized to ascertain the probable indebtedness and tbe value of corporate assets which could be applied in payment. If found inadequate, authority was conferred to levy upon stockholders for the deficit, including the estimated expenses of the receivership and costs of collection. Gen. Sts. of Minn. c. 76, § 5897. Gen. Laws of Minn. 1899, c. 272, §§ 1, 2. It accordingly follows that the plaintiff’s right to maintain this suit depends upon the regularity of the proceedings in which decrees were entered appointing him receiver and levying tbe assessment. If sustained as valid, then the plaintiff, who had become the representative of the creditors, was empowered to enforce in the courts of the defendant’s domicil his obligation as a debtor, which attached to and followed his person. Minnesota Thresher Manuf. Co. v. Langdon, 44 Minn. 37. St. Louis Car Co. v. Stillwater Street Railway, 53 Minn. 129. Howarth v. Lombard, ubi supra; Howarth v. Angle,
We proceed to consider the requirements, a full compliance with which must be shown before the defendant can be concluded by the decrees. A judgment having been obtained, upon which an execution had issued and been returned wholly unsatisfied, the petitioning creditor then became entitled to have a receiver appointed, who not only should sequestrate and marshal any corporate property applicable to the payment of debts, but thereafter, if such action became requisite, could institute further proceedings to reach and apply as assets the secondary liability of stockholders. Gen. Sts. of Minn. c. 76, §§ 5905, 5906, 5911. Gen. Laws of Minn. 1899, c. 272. Minnesota Thresher Manuf. Co. v. Langdon, ubi supra. The judgment against the company and the subsequent decree appointing a receiver cannot be collaterally attacked, as the court had jurisdiction, and there is no suggestion that either was fraudulently procured. Hinckley v. Kettle River Railroad, 80 Minn. 32. Thayer v. New England Lithographic Steam Printing Co. 108 Mass. 523. Old Colony Boot & Shoe Co. v. Parker-Sampson-Adams Co. 183 Mass. 557, 566-568. But this decree would have been fruitless, unless the next step could have been taken, as the company appears to have been hopelessly insolvent. By the interlocutory decree which followed upon the receiver’s petition, the court granted this further relief, and, being a part of the principal suit, this decree is conclusive, even if entered without affording the defendant an opportunity to be heard personally. He still remained a member, and, in the proceedings to marshal its property and to reach and apply the further security of his liability, the corporation was so far his agent that he must be considered as present by representation for the purposes of the suit. Howarth v. Lombard, ubi supra. Glenn v. Williams, 60 Md. 93. Hawkins v. Glenn, 131 U. S. 319. Hancock National Bank v. Farnum, ubi supra. Bernheimer v. Converse, ubi supra. Hanson v. Davison, 73 Minn. 454, 462. Merchants’ National Bank v. Minnesota Thresher Manuf. Co., ubi supra.
The further argument that the enabling statute was in violation of art. 1, § 10, of the Constitution of the United States,
But, the decree having included an estimated sum for the probable expenses of the receivership and of collection by suit of the assessment, the defendant argues that this increase forms no part of the amount for which he is answerable. The suit, to which in all its stages he must be considered a party, was set on foot for the sole purpose of liquidating the indebtedness of the company. In order to make the remedy effective, the instrumentality of a receiver was indispensable, and the word “ expenses ” as used in this statute, besides including his compensation, also comprised the entire disbursements required to maintain the principal suit by which the necessity of a resort to the liability of stockholders had been established, and the suits' «by which, if necessary, the right could be enforced against delinquents. Gen. Laws of Minn. 1899, c. 272, § 3. If, by the addition of expenses, the maximum liability of the defendant had been exceeded, a more difficult question would be presented, but as yet this limit has not been reached, and the measure of recovery in the present suit is the assessment levied, including interest from the date when it became due and payable by the terms of the decree. Harper v. Carroll, 66 Minn. 487. Wheeler v. Millar, 90 N. Y. 353, 362. Palmer v. Bank of Zumbrota, 72 Minn. 266. Bernheimer v. Converse, ubi supra.
The judgment for the defendant must be reversed, and judgment in favor of the plaintiff as receiver is to be entered in the sum demanded in the declaration, with interest from the date of the writ.
So ordered.