Finch, Van Slyck & McConville v. Vanasek
| Decision Date | 07 January 1916 |
| Docket Number | 19,494 - (162) |
| Citation | 155 N.W. 754,132 Minn. 9 |
| Parties | FINCH, VAN SLYCK & McCONVILLE v. JOHN F. VANASEK AND OTHERS |
| Court | Minnesota Supreme Court |
Application to the district court for Le Sueur county by John H. Lebens, as receiver of defendant corporation, for an order assessing stockholders therein preliminary to the enforcement of their constitutional liability. The application was heard before Morrison, J., who ordered an assessment upon each share of capital stock equal to the par value thereof. From the order of assessment, John F. Vanasek and Albert Sladek appealed. Affirmed.
Constitutional liability of stockholders -- enforcement -- right to jury trial.
1. Proceedings under section 6646, G.S. 1913, for an assessment against stockholders of an insolvent corporation, are summary and informal, not controlled by all the forms of ordinary judicial procedure, and the stockholders are not entitled to a jury trial of the questions involving the authority of the court to order an assessment.
Constitutional liability of stockholders -- evidence admissible.
2. The court may, under the statute, receive such evidence, by affidavit or otherwise, as will aid in the determination of the essential questions.
Constitutional liability of stockholders -- schedules in bankruptcy.
3. Certain schedules in bankruptcy proceedings and certain affidavits, though the affidavits contained some matters of hearsay, held properly received in evidence.
Constitution -- due process of law.
4. The statute authorizing such evidence does not deprive the stockholders of their property without due process of law and is therefore not unconstitutional.
Order levying assessment -- defenses.
5. The assessment is preliminary to subsequent proceedings for the collection thereof, is conclusive only as to the insolvency of the corporation and the amount of the assessment, and does not preclude the stockholders from interposing in such subsequent proceeding any other matter which may be available in defense.
Trial in adjoining county by consent.
6. The proceeding was pending in Le Sueur county, but the final hearing upon the petition for the assessment was had in the adjoining county of Scott. Held, not error, since the adjournment to Scott county was by the consent of both parties.
Moonan & Moonan, for appellants.
James E. Trask, for respondent.
The Le Sueur County Co-operative Company, a corporation organized under the laws of this state, was engaged, among other things, in a general mercantile business. The stockholders thereof, as respects the debts of the corporation, are subject to the liability imposed by section 3 of article 10 of the Constitution. The corporation became insolvent and bankruptcy proceedings against it were had in the Federal court, wherein its effects and property were taken and the proceeds applied as the law requires. It appears, however, that the stockholders' liability was not enforced in that proceeding. Subsequently plaintiff herein brought an action against the corporation to recover upon an indebtedness due it, and therein recovered a judgment for the sum of $967.80, upon which an execution was issued and returned unsatisfied. Thereafter a receiver was appointed under and pursuant to the provisions of sections 6634 and 6641, et seq., and the receiver duly applied for an order assessing all stockholders of the corporation, preliminary to the enforcement of the liability imposed by the Constitution. Notice of the application was duly given and the matter was brought on for hearing before the court at Le Sueur Center, in the county of Le Sueur, the county wherein the proceedings were pending, on April 27, 1915. Appellants herein, stockholders of the corporation, appeared and interposed by way of answer certain objections to the proceedings, and to the making of an order of assessment against them. The matter was, by the consent of counsel, adjourned for further hearing before the court on May 4, 1915, at Shakopee, in Scott county, a county adjoining Le Sueur county, and within the same judicial district. At the time and place so appointed the parties appeared, and appellants then objected to further proceedings before the court in Scott county, on the ground that the matter was triable in the county of Le Sueur, and that there was no warrant in law for the hearing in Scott county. The objection was overruled, and the court proceeded to hear evidence upon the question of insolvency of the corporation, the probable indebtedness thereof and its assets, the greater part of which was objected to by appellants, and upon such evidence made an order assessing the stockholders 100 per cent of their holdings. From that order the stockholders appealed.
1. It is contended that the trial court was without authority or jurisdiction to hear and determine the matter in Scott county; that, since the proceeding was brought and was pending in Le Sueur county, the stockholders had the right to a trial in that county. It was further contended that the allegations of the answer filed by the stockholders in opposition to the proposed assessment presented issues of fact for a jury to determine, and for this further reason that the stockholders were entitled to a trial thereof before a jury in Le Sueur county.
Neither contention can be sustained. The stockholders are not entitled to a jury trial in a proceeding of this kind. It was intended by the statute that the proceeding should be summary and without formal pleadings, and it is not controlled by all the forms usually incident to judicial procedure. The court under the statute deals in the main with probabilities, and is not authorized to determine any fact other than that of insolvency and the amount of the assessment to be made, which in any way precludes the stockholders in a subsequent action brought to enforce the assessment. The assessment is but preliminary to such...
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