64 Minn. 326 | Minn. | 1896
The complaint herein attempts to state two causes of action. The first one is to reach and apply upon the debt of the defendant corporation to the plaintiff certain unpaid subscriptions by the individual defendants to the capital stock of the corporation. The second one is to enforce against the stockholders a further liability created by the laws of the state of Ohio to an amount equal to the stock owned by each of them. The defendant Hubbard demurred to the entire complaint, and from an order overruling his demurrer he appealed. If the complaint states any cause of action, the order must be affirmed.
As to the second alleged cause of action, the allegations of the
As to the first cause of action the allegations of the complaint are substantially as follows: The defendant company is a corporation for profit, organized under the laws of the state of Ohio, with a capital stock of $150,000, divided into shares of the par value of $100 each. On December 22, 1891, in the court of common pleas of the county of Cuyahoga, in the state of Ohio, the plaintiff duly recovered a judgment against the defendant corporation upon a promissory note made by it in the sum of $1,969, which court then had jurisdiction of the parties to the action and of the subject-matter thereof. On January 21, 1892, an execution on such judgment was duly returned wholly unsatisfied, and no part of the judgment has ever been paid. The corporation has ceased doing business, disposed of all its assets, and has now no property. The individual defendants constitute all of the stockholders of the corporation, and they were each such stockholders at the time the plaintiff’s debt was incurred, and at all times thereafter. Each of them duly subscribed for the capital stock of the corporation in the number of shares set opposite the name of each in the complaint. The defendant Hubbard subscribed for 15 shares, and neither he nor any other defendant has ever paid any part of his subscription for his stock. The fair inference from these allegations is that the defendant corporation is absolutely insolvent, and without any assets other than the stock subscriptions, and is a foreign corporation beyond the reach of the process of the court; hence the plaintiff cannot obtain a money judgment against it in this state in an action at law, and have execution returned unsatisfied. The complaint states that this action is brought on behalf of the plaintiff and all of the creditors of the corporation. The relief demanded is in these words: “Wherefore
Unpaid stock subscriptions to the capital stock of a corporation may be reached by creditors of the corporation, and applied in payment of their claims, wherever and whenever the court can obtain jurisdiction of the stockholders, or any of them, whose subscriptions are unpaid, although the corporation is a foreign one. But the remedy adopted must be that of the forum. First Nat. Bank v. Gustin Minerva Con. Min. Co., 42 Minn. 327, 44 N. W. 198. In the case cited it is incidentally stated that the procedure adopted in Merchants’ Nat. Bank v. Bailey Mnfg. Co., 34 Minn. 323, 25 N. W. 639, which was that provided by G. S. 1894, c. 34, §§ 2600-2602, was the proper one in cases against foreign corporations. But the case cited cannot be regarded as so holding, for what was said in the opinion as to the proper remedy was not necessary to the conclusion reached. A reading of the sections referred to indicates that «they refer to domestic corporations organized under chapter 34, and do not include foreign corporations not within the jurisdiction of the court.
We infer from the brief of plaintiff’s counsel that the complaint was framed with reference to these sections of the statute, but, if the complaint states facts entitling the plaintiff to equitable relief, it states a cause of action, without reference to the intentions of the pleader, for it is hot the latter, but the complaint, which is demurred to. Where it is sought to impound the unpaid stock subscriptions of the stockholders of a foreign corporation in one action, and have the amount thereof applied equitably in payment of all of the debts of the corporation, an action in the nature of a creditors’ bill is a proper remedy, if not the only one, unless otherwise provided by statute. 1 Cook, Stock. & Stockh. § 205. The facts alleged in the complaint state a cause of action in the nature of such a creditors’ bill to reach unpaid subscriptions for the benefit of all of the creditors of the corporation.
In the case of National Tube-Works Co. v. Ballou, 146 U. S. 517, 13 Sup. Ct. 165, it was held that the fact that the creditor had obtained a judgment, and had execution returned unsatisfied, against a foreign corporation in the state where it was organized, and that it had no assets wherewith to pay the claim of plaintiff, was not sufficient to show that it was impossible to obtain judgment against it in the state where the creditors’ bill was brought to reach unpaid stock subscriptions. This case seems opposed to the decision of our own court in the case of Overmire v. Haworth. However this may be, it appears from the complaint in the case at bar that not only is the defendant a foreign corporation, but that it has ceased to do business, disposed of all of its assets, and
Order affirmed.