Albitzue v. Guadalupe Y. Caloo Min. Co.

• Decision Date: 20 May 1893
• Citation: 22 S.W. 739,92 Tenn. 598
• Parties: ALBITZUE et al. v. GUADELUPE Y CALOO MIN. CO. et al.
• Court: Tennessee Supreme Court

22 S.W. 739

92 Tenn. 598

ALBITZUE et al. v. GUADELUPE Y CALOO MIN. CO. et al.

Supreme Court of Tennessee.

May 20, 1893

Appeal from chancery court, Shelby county; Pierson, Special Chancellor.

Action by Jose M. Albitzue and others against the Guadelupe y Caloo Mining Company, a corporation, and others, as directors and stockholders, (1) to recover against the company for various debts, and wind up its affairs, and (2) to hold the directors and stockholders personally liable for the debts of the company. From a judgment dismissing the bill as to the defendant directors and stockholders, complainants appeal. Affirmed.

Wm Randolph & Sons and J. H. Watkins, for appellants.

John R Flippin, F. P. Paston, Myers & Sneed, Morgan & McFarland Malone & Malone, H. C. Warriner, Lee Thornton, T. W. & R. G. Brown, and Thos. M. Scruggs, for appellees.

WILKES J.

This bill was filed in the chancery court at Memphis against the defendant mining company, its shareholders and directors, seeking-First, decrees against the company for debts claimed to be due to complainants from it, and to wind up the company as insolvent; second, to hold the stockholders liable for the company's debts, because the stock held by them has never been paid up; third, to hold the directors liable, because they have knowingly permitted the company to contract debts in excess of the capital stock paid in; fourth, to hold the stockholders liable for debts due laborers, servants, and clerks. The individual defendants contest their liability on the following grounds: First, they claim that the capital stock has been paid for in two mines situate in the state of Chihuahua, republic of Mexico, valued at $10,000,000; second, that the debts of the company have never at any time exceeded the stock paid in, and hence the directors are not liable on that account; third, that the assets of the corporation have not been exhausted, and until that is done the stockholders and directors cannot be held liable; fourth, that complainants have in their hands and under their control property of the company in value exceeding the debts owing by the company, for which they have not accounted or offered to account, either before or after suit brought. Only one of the original incorporators or subscribers is made a party to the suit, all of the defendants having bought from the original stockholders or their transferees. Upon the hearing the chancellor decreed that the mining company was liable for some amounts, and directed a reference to ascertain and report the amount due each claimant. The bill as to the stockholders and directors was dismissed. Complainants appealed, and have assigned errors.

It appears from the proof and exhibits in the record that the unpaid debts of the company are about $50,000, the exact amount to be ascertained under the reference ordered. It appears that Flippin and other stockholders associated with him have paid into the company, and for its benefit, about $165,000 in actual cash, and the company has received from operating the mines about $260,000. It also appears that the company had a certain hacienda property contiguous to the mines, upon which were situated mills, machinery, implements, tools, etc., of the value of about $65,000. A transfer of this property has been made to complainants, in trust for themselves and all other creditors of the company, and, while the transfer and assignment was not regularly made by the company itself, still it is recognized and approved by the company. This property, according to the testimony of the complainants themselves, is in excellent condition. Independent of this transfer, under the mining laws of Mexico this property is subject to the payment of complainants' debts. Whether we consider the entire capital stock of $10,000,000 paid up in the two mines in Chihuahua, as contended by defendants, or whether we consider the $165,000 actually paid by a part of the stockholders in cash into the company, as its only capital, or whether we consider the property now in complainants' hands as the actual capital stock paid in, we find that the debts incurred and now outstanding are not in excess of either amounts, and hence there is no liability, under the statutes, as against the directors, and we find we need not consider the question whether the debts sued on were or were not incurred with the knowledge and assent of the directors.

Certain debts are claimed to be due to servants, clerks, and operatives of the company, for which it is sought to hold the stockholders liable under the provisions of the statute (Mill. & V. Code, § 1858.) ^[1] It appears that the amounts thus claimed are due to three persons, to wit, Thompson, clerk, bookkeeper, and manager of the company; George Cann, a blacksmith and machinist; and Gee Lac, a Chinese cook. Each of these parties claims an amount due upon wages and salary, and also for money advanced either directly to the company or in payment of debts against the company. The exact amount due to each cannot be ascertained until a reference is had, nor can the amounts due as wages be ascertained until that time. It is also claimed by way of defense that the claims thus presented are not of that class protected and provided for by the statute. However this may be, the claims do not exceed in the aggregate $7,500. ...