16 S.D. 633 | S.D. | 1903
On its own behalf as well as that of all other creditors choosing to participate, plaintiff, a corporation and judgment creditor, after exhausting its remedy at law, instituted this action against Michael D. Rossiter and his codefendant, an insolvent corporation, for the purpose of obtaining a decree in equity subjecting the property of such corporation to the payment of its debts. On the ground that the facts stated were not sufficient to constitute a cause of action, the trial court sustained a demurrer to the complaint in the nature of a creditors’ bill, and plaintiff appeals.
Omitting reference to the usual averments of corporate capacity, the amount due on appellant’s judgment, the insolvency of both respondents, and issuance of an execution, which was returned unsatisfied, counsel for appellant fairly state the substance of the material facts alleged in the complaint as follows:
“(5) On February 14, 1898, the said defendant Rossiter obtained by default a judgment in the circuit court of Lawrence County, S. D., against the defendant corporation upon six causes of action for the aggregate sum of seventeen thousand nine hundred twelve dollars and fifty-three cents.
“(6) That each of the causes of action mentioned in the foregoing paragraph were assigned by the owners thereof to the defendant Rossiter solely for the purpose of placing the same in judgment, and that defendant Rossiter took said assignments as trustee of an express trust; that the owners of the said causes of action remain the real and equitable owners thereof, the defendant Rossiter simply representing them for the purpose of obtaining judgment thereon.
“(7) That one of the said causes of action was and is in fav- or of Bryan E, Rossiter for an indebtedness incurred prior to the*635 commencement of said suit, to the amount, as alleged in said suit, of nine thousand one hundred forty-six dollars and ninety-seven cents; that another of said cause of action was and is in favor of J. Stuart Stevenson on an indebtedness incurred prior to the commencement of said suit of an amount, as alleged therein, of two thousand eighty-two dollars and ninety cents; upon information and belief that said Bryan E. Rossiter and J. Stuart Stevenson were at the time of the commencement of said action, and are now, directors and officers of the defendant corporation.
“(8) That the summons in the action of Michael D. Rossiter against the defendant corporation was served upon the said Byran E. Rossiter as vice president of the defendant corporation, and upon the said J. Stuart Stevenson as secretary thereof, on January 12, 1898, and that no other parties were served with process in said action; that the said Bryan E. Rossiter is the brother of the defendant Michael D. Rossiter; and that by said suit of Michael D. Rossiter it was attempted to give a preference to directors and creditors of an insolvent corporation over other creditors thereof.
■ “(9) That immediately upon the entry of said judgment in favor of said Michael D. Rossiter execution was issued thereon, and levied upon the cyanide mill premises, machinery etc:, of the defendant corporation, situated in the First Ward of Deadwood, S. D.; that such proceedings were thereupon had that the said property so levied upon was on March 28, 1898, sold to the defendant Michael D. Rossiter by the sheriff of Lawrence county for the full amount of said judgment, interest, andcosts,and that the said Michael D. Rossiter now claims tobe the owner thereof.
*636 “(10) That the value of said cyanide mill, machinery, and appurtenances so sold to said Michael D. Rossiter is forty-five thousand dollars; that the defendant corporation has no other property than that so sold to the said Michael D. Rossiter.
“(11.) That the said execution sale to the said Michael D. Rossiter was made with intent to hinder, delay, and defraud this plaintiff and the creditors of the defendant corporation; and thatthesame does, hinder, delay, and defraud this plaintiff and the other creditors of the defendant corporation.
“(12) That the cyanide mill and appurtenances was at the date of said sale, and has been ever since, leased, and that the defendant Michael D. Rossiter has since said sale, and is now, collecting the rentals and income therefrom; that the defendant Rossiter claims that the interest of the corporation in the land upon which said mill and machinery are situated was at the date of said sale leased upon a two-years unexpired leasehold term, and defendants claim that said execution sale was, therefore, absolute, and not subject to redemption, but that said cyanide mill and maohinery were prior to said sale the property of the defendant corporation, which had the right to remove the same after the expiration of its said lease. The plaintiff prayed judgment for a receiver of the rents and incomes; for an injunction restraining defendant Rossiter from incumbering or disposing of the property attempted to be purchased at execution sale; that the judgment referred to in favor of defendant Rossiter against the defendant corporation and the execution sale thereon be declared void, and be set aside, and that the property so attempted to be sold be applied in satisfaction of plaintiff’s judgment and of the claims of other creditors who should come in under this proceeding and contribute to the expenses thereof. ”
The order sustaining the demurrer is reversed, and the case remanded for further proceedings.