Glenn v. Liggett Same v. Taussig

• Decision Date: 19 May 1890
• Citation: 34 L.Ed. 262,135 U.S. 533,10 S.Ct. 867
• Parties: GLENN v. LIGGETT. SAME v. TAUSSIG et al
• Court: U.S. Supreme Court

135 U.S. 533

10 S.Ct. 867

34 L.Ed. 262

GLENN v. LIGGETT.

SAME

v. TAUSSIG et al.

May 19, 1890.

These are two actions at law brought in the circuit court of the United States for the eastern district of Missouri, on the 12th of July, 1886, by John Glenn, trustee of the National Express & Transportation Company,—one against John E. Liggett, and the other against Charles Taussig and Morris Taussig. The cases were disposed of in the circuit court on a demurrer in each case to an amended petition. The demurrer was sustained in each case, and judgment entered for the defendants, with costs, to review which the plaintiff has in each case brought a writ of error. In the suit against Liggett the plaintiff claims to recover $1,890, with interest from December 14, 1880, and $3,150, with interest from March 26, 1886; and in the suit against the Taussigs, $3,000, with interest from December 14, 1880, and $5,000, with interest from March 26, 1886.

The first cause of action, as set out in the amended petition against Liggett, is as follows: Liggett subscribed for 63 shares of the capital stock of the National Express & Transportation Company, a Virginia corporation, created by an act of the general assembly of that state, approved December 12, 1865, and thereby promised to pay to that company for each share $100, in such installments and at such times as he might be lawfully required to pay the same, according to the legal tenor and effect of the laws under which the company was so incorporated and his subscription to said stock, whereby, and by force of such subscription, he became a stockholder in the company, and agreed to sue and be sued, plead and be impleaded, contract and be contracted with, in said corporate name, as to all matters touching the property, rights, and obligations of the corporation. On the 20th of September, 1866, the corporation, having become insolvent, by its deed of that date, duly executed, acknowledged, and recorded, assigned to John Blair Hoge and C. Oliver O'Donnell, both citizens of Mary land, and John J. Kelly, a citizen of New York, in trust for the benefit of the creditors of the company, all its property, in trust to collect all the debts, claims, and moneys payable, to reduce the same to money, and to apply the proceeds to the trusts declared by the deed, including the trust therein declared for the payment of the debts of the company, in the order of priority therein provided, and shortly thereafter ceased to do business. The defendant assented to said deed, and thereby promised to pay to said trustees for each share of stock so subscribed for by him the balance of the $100 due on each share of stock, uncalled for at the time of the making of the deed, whenever he might be lawfully called upon to pay the same, according to the legal tenor and effect of the laws under which the company was incorporated and the subscription made. At the time of the execution and delivery of the deed the company had called for 20 per cent. of the par value of the stock. The trustees appointed by the deed neglected to perform the trusts thereby created, and the validity and effect of the deed were drawn in question in the courts of various states, in which the stockholders resided, and the enforcement thereof was hindered. In November, 1871, William W. Glenn, of Baltimore, being a judgment creditor of the company, filed a bill in the chancery court of the city of Richmond, it being a court of competent jurisdiction in such cases, in his own behalf and in behalf of all other creditors of the corporation, against it and certain of its officers and the trustees named in the deed of trust as defendants; by which bill it was sought to obtain from that court a judicial determination of the validity of the deed, and a judicial construction of it, and the establishment of the legal effect and obligation of it upon all property, rights, and persons affected thereby, and also to enforce the trusts thereby declared in favor of the creditors of the corporation. Pending that bill, William W. Glenn died, and in the year 17 9 the suit was revived in the name of John W. Wright, sheriff of the city of Richmond, and as such duly constituted official administrator of said Glenn. After such revivor, an amended bill was filed, to which bill the corporation, certain of its officers, and Hoge and Kelly were made defendants, O'Donnell having died. By that bill it was sought to obtain, in addition to the relief prayed for in the original bill, an account and establishment of the debts due by the company and secured by the deed of trust, and an account of the property and estate subject to the terms of the deed, including the amount of capital stock yet remaining unpaid and uncalled by the company, and subject to be applied to the payment of its debts, the removal of the surviving trustees, the appointment of a new trustee or trustees in their room, an assessment or call to be made by the court on the uncalled and unpaid capital stock, and the persons liable to pay the same, for the purpose of providing means to pay the debts of the corporation, and other appropriate relief. The company was duly served with process in the cause, in accordance with the laws and practice of the state of Virginia, certain of its officers were summoned, and the surviving trustees appeared voluntarily to the suit and answered the original and amended bills, whereby the court acquired full jurisdiction to decree as to all the matters and things involved in the suit. Such proceedings were had in the cause that, on the 14th of December, 1880, the court decreed as follows: (1) That the deed of trust of September 20, 1886, was valid under the laws of Virginia and binding upon the corporation; (2) that at the time of the execution of the deed the corporation had called for 20 per cent. of the amount payable by the subscribers to its capital stock, and that 80 per cent. of that amount, being $80 on each share, remained unpaid and uncalled for at the date of the decree, and subject to be applied to the payment of the debts of the corporation secured by the deed of trust; (3) that the right to receive such 80 per cent. from the persons liable to pay it, as and when it should become payable by the terms of the contract between the company and the subscribers to the stock, was vested by the deed in the trustees and their survivors, to be applied, when so collected, to the payment of the debts secured by the deed; (4) that the unpaid $80 per share was, by the terms of the contract between the company and the persons liable to pay the same, payable only in such amounts and at such times as the same might be required to be paid by the company through its president and board of directors; that no power or authority to sue for any part thereof was vested in the company or in the trustees under the deed, unless and until such call should first be made by the corporation, and that the trustees acquired no power to make such call by force of the deed of trust or otherwise; (5) that there was no property of the company wherewith to pay its debts, except the amount so remaining uncalled of its capital stock, and it was the duty of the proper officers of the corporation to call upon the persons liable therefor to pay a sufficient amount of the unpaid $80 per share to carry out the trusts of the deed, and pay the creditors secured thereby, but that the corporation and its proper officers had for many years wrongfully neglected to make such call; (6) that the unpaid and uncalled $80 per share remaining in the hands of the holders of the capital stock constituted a trust fund for the payment of the creditors of the company under the deed of trust; and that, by reason of the neglect and failure of the corporation to call for the payment of a sufficient amount thereof to satisfy its debts under the deed of trust, and thereby enable the trustees to sue for and recover the amount so called, the court possessed and would exercise such power, and would call for so much of the said uncalled amount as would be necessary to perform thet rusts declared by the deed and pay the debts secured thereby; (7) the surviving trustees were removed by the decree, and the plaintiff was appointed by it in their stead to execute the trusts of the deed; (8) there were debts owing by the company, entitled to be paid under the deed of trust, amounting to $509,392.41, each of which debts was particularly ascertained and ordered by the decree to be paid. The decree further adjudged that it was necessary and proper that 30 per cent. of the par value of each share of the stock should be called for and required to be paid by the subscribers therefor and their assigns, for the purpose of paying the debts of the company under the provisions of the deed of trust; and that a call and assessment be, and the same was thereby, made upon the stock and stockholders of the company and their assigns, of 30 per cent. of the par value of the stock, being $30 on each share thereof; the same, when paid, to be paid to and received by the plaintiff as trustee under the deed, in the stead of the original trustees therein named. The plaintiff accepted the appointment so made, and complied with its terms and conditions, and was and is duly qualified to act as such substituted trustee, and to have the rights, and perform the duties, conferred upon and required of him by the decree. By force thereof, and of the statute of Virginia in such case made and provided, he, upon accepting such appointment, and qualifying as such trustee, as required by the decree, became and still is substituted to all the rights, powers, duties, and responsibilities of the trustees named in the deed of trust, and became and is lawfully entitled to receive and collect the assessment or call of $30 per share on each share of stock of the company, from the persons liable to pay the same. By virtue of the premises the defendant became indebted to him...