Howard v. Glenn

• Decision Date: 21 April 1890
• Parties: HOWARD v. GLENN.
• Court: Georgia Supreme Court

11 S.E. 610

85 Ga. 238

HOWARD v. GLENN.

Supreme Court of Georgia

April 21, 1890

Error from superior court, Richmond county; RONEY, Judge.

F. H Miller, for plaintiff in error.

Calhoun King & Spalding, and C. H. Cohen, for defendant in error.

BLANDFORD J.

At the appearance term the defendant filed a motion to dismiss the plaintiff's declaration on the ground that he failed to annex a copy of the written terms of subscription, and copies of the proceedings referred to in his declaration, with a copy of the call for the enforcement of which this action was brought. Subject to this motion, defendant pleaded: (1) That the National Express & Transportation Company was not on the 14th day of December, 1880, a body politic and corporate, as alleged in the plaintiff's declaration; (2) that the plaintiff is not a legally appointed trustee, and authorized to institute this action by virtue of his appointment; (3) that, if the defendant ever subscribed to stock, it was to the National Express Company, whose charter was amended without the knowledge or sanction of this defendant, (4, 5 6) the statute of limitations. When this case came on to be tried, the court ordered these pleas stricken, and overruled the motion to dismiss the plaintiff's declaration.

1. In our opinion, the plaintiff's declaration set forth a cause of action against the defendant. The declaration substantially alleged that Howard was a subscriber to the National Express & Transportation Company for 15 shares of its capital stock, amounting to the sum of $1,500; that this company, having become insolvent, made an assignment to certain persons as trustees; that certain creditors of this company filed a bill in the city court of Richmond, upon which there was a decree rendered, praying that the defendant in error, Glenn, should be appointed a trustee with authority to sue and collect from the corporators of the National Express & Transportation Company a certain assessment and call made upon them by the decree of that court. The officers or persons representing the National Express & Transportation Company were made parties defendant to that bill. We think, so far as Howard had any interest in this company, that he was represented by the corporation in that case, and that he was bound by the decree rendered in the same, (it being rendered by a court of competent jurisdiction,) not withstanding that Howard may at the time have been a citizen of Georgia, and may not have been served with any process in that case. So we think the court did right to overrule the demurrer of defendant to the plaintiff's declaration. We think, also, that the pleas first, second, and third and fourth, fifth, and sixth were properly dismissed on demurrer by the court. We think, that Glenn was duly appointed a trustee, and as such had a right to bring this suit; and that if the defendant subscribed to stock in the National Express Company, although the charter may have been amended without his knowledge or sanction, so as to make it the National Express & Transportation Company, this did not relieve the defendant from any liability to pay up his unpaid stock, this not being such a material alteration of the charter as would relieve the defendant, Howard; and this court held in 81 Ga. 383, 8 S.E. 636, in this same case, that the statute of limitations did not apply to the same.

2. We think there was no error of the court in holding that the first plea of the defendant in this case was insufficient, in that it alleged that the action brought by the plaintiff did not set forth the outstanding creditors for whose benefit the same was instituted, the decree of the court in Virginia having set forth such creditors; and we hold that that decree was binding on the defendant, Howard, as to all matters therein contained, if he was a corporator in the National Express & Transportation Company.

3. It is alleged as error that the court erred in striking the second plea of defendant; that the decree of the chancery court of the city of Richmond of December 14, 1880, set forth in the petition, was not such a contract of record as was binding upon him personally for any purpose, in that the court was without jurisdiction over him as a resident citizen of the estate of Georgia, who was never served with process therein, who never appeared, or had notice thereof, until the institution of this suit. We think that when the corporation was sued at the instance of creditors, and was duly served, Howard was bound as a corporator by any proceedings in that case, and there was no error in striking the second plea.

4. We think the third plea was also properly stricken by the court, inasmuch as we think that whatever fraud may have been committed by the corporation would not operate to defeat an action by the creditors of the corporation, however it might be as between the corporation and a corporator. Persons who gave credit to this corporation would not be bound by any fraud between the corporation and the corporators. As between the corporation and a corporator, such defense may or may not have been good; but, as between a trustee appointed by a court to bring suit and collect the unpaid subscriptions of a corporator, no such defense could be made.

5. We think the fourth plea was properly stricken on demurrer, in this: that while it alleged the decree of the court in this case in Virginia, to the effect that if the stockholders should pay a certain per cent. upon their subscriptions within a certain time, this would be sufficient to pay off the indebtedness of the company, the plea did not allege that there was any tender or offer on the part of defendant to pay under that decree within the time therein prescribed, the amount prescribed to be paid. To avail himself of that decree, the defendant should have paid, or have offered to pay, the amount specified in the decree. No such allegation appears in this plea, and therefore it was properly stricken.

6. It is complained that the court erred in striking the fifth plea, or so much thereof as alleged that the subscription was induced by fraud, and is void for false and fraudulent representations made, and for the fraudulent suppression of material facts concerning said company, the court allowing the words to stand in said...