198 F. 444 | U.S. Circuit Court for the District of Southern New York | 1911
There are two material questions in this case: First, did the decree of the Minnesota court purport to assess the defendant in respect of his stock? Second, did that court have jurisdiction over him? If both these questions are answered in the affirmative, none of the other objections of the dlefendant are good, because in such case he may not raise collaterally any irregularities in the Minnesota proceedings. For example, it is of no consequence, even if his assessment ought to have been limited to a sum sufficient to pay the debts incurred while he was a stockholder, or if he was only secondarily liable in any case, because all such questions are necessarily before the court which makes the assessment, and, if that court once acquired jurisdiction, its decision of them is final, whether it is right or wrong. The defendant’s only relief in such a case was to appear in that proceeding, or, if he was already in default, to apply for a reopening of the decree of assessment. Section 5 of the act of 1899 (Laws 1899, c. 272) provides that the assessment shall be conclusive “as to all matters relating to the amount of and propriety of and necessity for the said assessment.” All that is open to dispute is that the defendant is not a stockholder at all, or that he does not hold as many shares as is alleged, or that he has discharged his liability, or that he has a counterclaim or personal defense. Straw, etc., Co. v. L. D. Kilbourne, etc., Co., 80 Minn. 125, 83 N. W. 36. This is also the effect of Bernheimer v. Converse, 206 U. S. 516, 27 Sup. Ct. 755, 51 L. Ed. 1163.
However, he insists that, as he held the stock only as collateral, he is not liable. Had that fact been noted upon the stock book, it would apparently have freed him from liability. Marshall Field & Co. v. Evans, Johnson, Sloane & Co., 106 Minn. 85, 118 N. W. 55, 19 L. R. A. (N. S.) 249. At least it would have required me to consider the truth of the testimony regarding his subscription to the stock. But it was not so entered, and it is settled in Minnesota that a pledgee whose name is unconditionally entered as a stockholder is liable under the statute. State v. Bank of New England, 70 Minn. 398, 73 N. W. 153, 68 Am. St. Rep. 538. It is not pertinent to inquire into the principle of the distinction because the decisions of the Supreme Court of Minnesota are authoritative upon the question.
Therefore the defendant was liable from the time when he actually accepted the stock, and wdien, as a natural result of that acceptance, his name was entered unconditionally as a stockholder. He could only escape such liability by seeing to it that the character of his holding appeared upon the books of the corporation. Moreover, he remained liable until at the earliest his name was struck off, if it can be said to have been struck off by the entry made after he delivered up the stock. The intermediate liability between these two dates did not expire at the end of oñe year, as in the case of the liability of bank stockholders, in Minnesota, but it endured and was open to assessment when the corporation became insolvent. It could form the basis of a jurisdiction, not personal, quite as much as though he remained a stockholder at the time of the insolvency. The amount, propriety, and necessity of the assessment are all concluded by the decree under section 5 above mentioned. The plaintiff has shown that there was an existing liability on 30 shares and that is all that he need do.
I direct a verdict for the plaintiff for $3,000, with interest.