Hablitzel v. Latham, 35 Iowa 550

Hablitzel v. Latham

35 Iowa 550 | Iowa | 1872

Beck, Ch. J.

The only question presented for our consideration in this case involves the correctness of the judgment of the court in ordering the action of plaintiff against the defendants as stockholders of the insurance company to be stayed upon the showing made by the cross-bill. The case, as presented to us, does not demand an inquiry into defendants’ liability under the facts set out in plaintiff’s petition. Admitting their liability thereon, we are of the opinion that the court correctly ordered plaintiff’ s action to be stayed. The cross-bill alleges the legality of the organization of the corporation and shows facts which demand the appointment of a receiver, so far as the corporation and its acts are involved. The charge of fraudulent collusion against the interest of defendants, entered into by plaintiff and certain stockholders of the *554incorporation, certainly presents grounds entitling defendants to relief. If defendants are admitted to be liable in an action to plaintiff, tbe other stockholders are also liable. Equity will not permit plaintiff to recover from such, money as a consideration for their discharge unless the sums so received be considered as payment pro tanto upon his claim. He should be required to account therefor. As a claim against the corporation, plaintiff’s judgment, in a proceeding of the kind instituted by defendants’ cross-bill, should be credited with such payments, proper account of which ought to be made in settling the rights and liabilities of the different stockholders. It was therefore proper for the court, considering the right of defendants and the other stockholders and the corporation, to determine the amount of such paj^ments. This can only be done before final judgment upon plaintiff’s claim, and that this may he done and the rights of all parties protected it is necessary to stay proceeding in plaintiff’s action. The power of the court in this proceeding to restrain plaintiff from the prosecution of his action or delay judgment therein, cannot be doubted. The showing made demands such relief. No objection is made as to the form of granting the relief, whether security should have been required of defendants or the like ; the objection is based upon the alleged want of authority to make it at all. Wre determine no other points than the power of the court to grant the relief and the sufficiency of the allegations of defendants’ cross-bill to demand its exercise.

The abstract before us does not show that plaintiff’s motion to vacate the order staying his proceedings was ruled upon, and the appeal is taken alone from the order staying the proceedings. We have, therefore, nothing to do with the merits of that motion and do not consider it

Affirmed.