85 Md. 52 | Md. | 1897
delivered the opinion of the Court.
The appellees were severally creditors of the Wooldridge Fertilizer Company, a body politic and corporate. They filed a bill in equity containing allegations which impeached the validity of certain transactions between said corporation,
The facts as they appear to us are as follows : In the year eighteen hundred and ninety-one the Wooldridge Fertilizer Company was incorporated in the State of West Virginia. The incorporators were Edmund J. Folsom, Robert A. Woolridge, Edwin G. Mclnnes, William H. Edmunds and James Thurston; Folsom and Mclnnes being residents of Boston, and the others residents of Baltimore. The article of incorporation stated that the company should keep its principal office or place of business in the city of Baltimore, and that the corporators had subscribed the sum of five hundred dollars to the capital stock, and had paid in on said subscription fifty dollars, and that they desired to increase the capital to one hundred thousand dollars. As stated in the instrument of incorporation the corporate body was formed “ for the purpose of importing, buying, manufacturing and selling fertilizers, dealing in mining and working all kinds of fertilizing materials, and doing any and everything pertaining to the fertilizer business.” It appears to have done no business until January the ninth, eighteen hundred and ninety-three, when, according to the minutes of a meeting held on that day, it purchased from Robert A. Wooldridge, for the sum of two hundred and two thousand six hundred and nine dollars and four cents, all of his assets (with an exception of no consequence), together with the good will of his business, formulas, trademarks, &c., &c. This price was payable as follows: One hundred thousand dollars in stock of the company (which was the entire amount of its stock), seventy-eight thousand dollars in notes of the company bearing interest at six per cent, per annum, payable semi-annually, and the remainder by
It is very apparent that this corporation was chartered in pursuance of a scheme to relieve Wooldridge of an indebtedness which he was unable to pay, and to procure the payment to Folsom and Company of a debt which they were unable to collect from the person who owed it. All the proceedings from the inception of its existence were designed to accomplish this result. In August, eighteen hundred and ninety-one, it came into existence as a legal body with the capacities conferred on it by its charter. But it had no property whatever, and therefore no means of exercising its franchises. On the ninth day of January, eighteen hundred and ninety-three, the directors heretofore mentioned were elected, and on the same day the contract was made with Wooldridge for the purchase of his assets. The corporation had nothing with which to make payment except its unissued stock. The contract required it to pay more than two hundred thousand dollars for property, a considerable portion of which was of no use whatever in the prosecution of its business, and which in the aggregate was far less in value than the price stipulated to be paid for it. There may be and there probably is some inaccuracy in the estimate of values made in the testimony, and also in Wooldridge’s statement that he was unable to pay more than fifty per cent, of his indebtedness. But making due allowance for mistake in these particulars, it is still evident to us that there was great excess in the valuation of the property, and that Wooldridge was insolvent. We metion the exaggerated price and the insolvency because they illustrate the working of the scheme, which the incorporators of this company were endeavoring to carry out. The excessive price furnished the occasion and opportunity for the assumption of
The Court had the same jurisdiction over the corporation which it would have had over a natural person under the circumstances. It did not deal in any way with its charter, or impair any of its rights thereunder, but pursued the ordinary course by issuing an injunction and appointing receivers, which is adopted when the rights of bona fide creditors are to be secured against fraudulent deeds or contracts. Wooldridge answers the bill of complaint in his official character as president of the Wooldridge Fertilizer Company. This could not be taken for anything else than the answer of the corporation. No exception was taken to it in the Court below; but it was treated .as the answer of the corporation, and the proceedings were conducted to a final de
One of the partners of the firm of B. F. Folsom & Co. was dead when the bill was filed in this case, and the affairs of the partnership were conducted by the surviving partner. It has been urged that the heirs of the deceased partner ought to have been made parties to the suit, on the ground that they were interested in the real estate on Smith’s wharf. But it was acquired and held as partnership property and it must be treated as personalty in the view of a Court of Equity, as between the partners and parties prosecuting claims against the partnership. This was the opinion of Judge Story in Hoxie v. Carr, 1 Sumner, 183, and it was adopted by this Court in Goodburn v. Stevens, 5 Gill, 26. Edmund J. Folsom, the surviving partner, is administering the affairs of the partnership, and is the proper party against whom claims and demands adverse to it should be prosecuted. But even if the other partner were still alive a judgment or decree against one partner would bind the partnership property. Rhodes v. Amsink, 38 Maryland, 355; Johnston v. Mathews, 32 Maryland, 363. When the partnership is wound up and the assets are to be divided according to the rights of the partners and their representatives a different question will arise. We perceive no error in the decree of the Court below except in that portion of it which is made against Jelke, who was not a party to the suit. This is an error of which the appellant has no right to complain; but as the counsel for the appellees stated in open Court that it was inadvertently made, and consented that it should be corrected, we shall make the correction by striking out of the decree all reference to Jelke and affirm it as modified.
Decree modijied and affirmed with costs.