First National Bank v. Winona Plow Co.
| Decision Date | 11 July 1894 |
| Docket Number | Nos. 8876, 8878.,s. 8876, 8878. |
| Citation | 58 Minn. 167 |
| Parties | FIRST NATIONAL BANK OF WINONA <I>et al.</I> <I>vs.</I> WINONA PLOW CO. <I>et al.</I> |
| Court | Minnesota Supreme Court |
of $50 each, and was all taken and paid for. Defendant Gould subscribed and paid for eighty shares, and received and thereafter held that number. The plaintiff, the First National Bank of Winona, loaned money to the Plow Company, and on July 23, 1892, when this action was commenced, held its notes for $18,058.49 and interest. The Plow Company was also then indebted to Verazeno Simpson in the sum of $11,401.85, and to other creditors $2,226.03. The company was then insolvent. The value of its property did not exceed $10,000, and it had ceased to carry on business.
This action was commenced under 1878 G. S. ch. 76, § 17 et seq., against the Plow Company and all its stockholders and against all who had held stock within six years and since plaintiff's claim or any part thereof was first contracted. The complaint alleged the facts stated above and set forth the dates on which the existing debts of the Plow Company to the Bank were contracted, the names of the stockholders, the amount of stock held by each, the date when each acquired his stock and from whom, and, if transferred, then to whom and the date thereof. The insolvency of some and the nonresidence of others of the stockholders were also stated. It asked judgment for the amount of its claim, that an account be taken of the assets and liabilities of the Plow Company, that a receiver be appointed and the property converted into money, that the liability of its several stockholders and of those who had held stock be ascertained and enforced, that a just distribution be made of the proceeds realized, and for such further relief as should seem equitable. Many of the defendants demurred, but were overruled, and they answered. Verazeno Simpson and six other creditors intervened under 1878 G. S. ch. 76, § 23. Each intervenor, by his complaint, severally stated his claim against the Plow Company, the date when it was contracted, and that he held no security. Each alleged that all the allegations in the complaint of the Bank were true, and asked that they be deemed repeated by him and made a part of his intervening complaint, except those as to the amount of the Bank's claim. Each demanded the benefit of any judgment obtained in the action and his proper share of whatever might be recovered under such judgment, and asked that judgment be given as prayed in the complaint of the Bank, and that he might be given such other and further relief as to the court should seem proper. Answers were filed and the issues were tried December 19, 1892. The trial court made findings and ordered judgment as follows: That the plaintiff, the First National Bank, recover from the defendant, the Winona Plow Company, $18,148.49 with interest from June 12, 1891. That the intervenor, Verazeno Simpson, recover from the said company $11,401.85 with interest from February 18, 1892. That the six other intervenors, naming them, each recover a specific sum named. That O. B. Gould be appointed receiver of all the property of the Plow Company. That he give bond, and that the Plow Company turn over to him all its property of every kind, and on his request execute to him all proper transfers, deeds and conveyances. That the entry of judgment herein vest in said receiver the title to all the said property without any other act or ceremony. That said Plow Company be enjoined from in any manner selling or disposing of its property or interfering therewith except to preserve it for such receiver. That such receiver proceed with all reasonable speed to sell and convert all its property into money, and out of the proceeds thereof pay the necessary expenses of such receivership, including his own fees, and pay and distribute the net balance thereof pro rata to the plaintiff and intervenors herein, to be applied by them respectively to the payment of their several judgments to be entered herein against said Plow Company. That after making said payments such receiver make and file with the court a full detailed report of his doings, receipts, disbursements and payments as such receiver, with a statement of the amount then due on the said several judgments if anything. That the stockholders of said defendant corporation, the Winona Plow Company, are severally and individually liable to its creditors for its debts and liabilities to an amount not exceeding the par value of the stock held by each of them respectively at the time said debts were contracted. That this liability cannot be discharged as against existing creditors by a transfer of the stock, but the successive holders or transferees by accepting the stock impliedly undertake to indemnify their vendors and discharge for them all liabilities attaching to the stock; therefore to avoid circuity of action the stockholders of said Plow Company who were such at the commencement of this action, are to be primarily charged with the debts of said corporation; and their transferors who were stockholders when said debts were contracted are to be charged with such liability also, but only upon condition that the amount thereof cannot be collected from their transferees. That if, upon the coming in of the report of said receiver, it shall appear to the court that the judgments in favor of plaintiff and intervenors herein are unpaid, in whole or in part, judgments be severally entered herein against all of the then solvent stockholders of said Plow Company of whom or of whose property the court then has jurisdiction named in a schedule annexed, for the...
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