Irvine v. Elliott

• Decision Date: 24 February 1913
• Citation: 203 F. 82
• Parties: IRVINE v. ELLIOTT.
• Court: U.S. District Court — District of Delaware

203 F. 82

IRVINE v. ELLIOTT.

United States District Court, D. Delaware.

February 24, 1913

[Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted]

Willard Saulsbury and Hugh M. Morris, both of Wilmington, Del., for plaintiff.

Herbert H. Ward, of Wilmington, Del., for defendant.

BRADFORD District Judge.

This is an action of debt brought for the recovery from Alfred S Elliott of $8,125, being the amount assessed against him by the court of common pleas of Franklin County, Ohio, hereinafter called the court of common pleas, under his alleged statutory double liability as a stockholder of The Columbus, Sandusky and Hocking Railroad Company, hereinafter referred to as the railroad company, an insolvent Ohio corporation, with interest thereon. The case is before the court on a demurrer to the declaration. By stipulation of counsel a paper marked 'A' containing a copy of certain decrees in the proceedings in Ohio has been filed, to to have the same force and effect as if set forth in the declaration as originally filed. The declaration in connection with paper 'A' so far as material to the consideration of the demurrer alleges in substance that the railroad company was duly incorporated in Ohio in 1895; that on and prior to January 14, 1899, it was indebted to F. M. Marriott in the sum of $1,000 with interest, and to The E. A. Kinsey Company in the sum of $12,860.53, with interest; that the railroad company was on the last named day, and for some time theretofore had been, and now is wholly insolvent and without any property which could be applied to the satisfaction of the above mentioned two debts, other than the liability of its stockholders as hereinafter set forth; that on or about January 14, 1899, Marriott filed in the court of common pleas, a court of competent jurisdiction, a petition in his own behalf as well as in behalf of all the creditors of the railroad company, setting forth that he had on or about October 3, 1898, obtained in that court judgment against the railroad company on his above mentioned claim, which was in full force and unsatisfied, stating the authorized amount of the capital stock of the railroad company, the number and par value of the shares, all of which had been subscribed for and taken, further setting forth that the railroad company October 3, 1898, was and for two years prior thereto had been wholly insolvent, its property and all property rights 'then being in the hands of receiver,' and the railroad company 'at said time did not have, and since the recovery of said judgment had not had, any property from which said judgment could be satisfied'; that Marriott in his petition prayed that the railroad company be compelled to disclose the names of the persons who were then or had been its stockholders, and to set forth the amounts due from them, if any, on their stock, and that they when discovered be made defendants in that cause, and further that the names of the creditors of the railroad company be ascertained 'together with the amounts due each, in such manner as the court might direct, and that all stockholders in arrears for subscription for said stock be required to pay the balance due from them, and that each stockholder be required to pay his ratable proportion of any deficit remaining after the application of the said assets to said debts'; that on the filing of the above petition process issued and was served on the railroad company which duly appeared by its authorized attorney; that thereafter, December 22, 1899, The E. A. Kinsey Company filed in the same court against the railroad company and its stockholders a petition, hereinafter called the Kinsey petition, in behalf of itself and all other creditors of the railroad company, (the Marriott and the Kinsey petitions having the same general purpose), alleging, among other things, that on or about June 2, 1897, in a suit in the circuit court of the United States for the southern district of Ohio between The Mercantile Trust Company of New York, as trustee, and the railroad company, a receiver was appointed of all the assets and property of the latter company, and further alleging that the railroad company 'had ceased to do business and had no property of any kind with which to do business,' and 'it was necessary for the payment of the creditors of said company that the stockholders thereof should be assessed under the laws of the State of Ohio the full amount of their statutory liability,' and praying for an ascertainment of the total debts and liabilities of the railroad company, the amount of each and when contracted, and of the 'number of shares of stock held by each of said stockholders and the time during which each of said stockholders respectively owned and held said stock,' and of the 'amount of the assessment necessary and proper to be made to satisfy the said debts of said railroad company,' and praying further that 'after such ascertainment of said debts and liabilities, stockholders and assessments a receiver should be appointed to collect the said assessments and to distribute the same among the creditors of said company as the same should be entitled thereto,' and that the petitioner should have 'all other and further relief as the circumstances of the case might require,' etc.; that the railroad company was served with process and duly appeared by its authorized attorney; that the court of common pleas March 31, 1902, found and determined that the two proceedings instituted by the Marriott and Kinsey petitions had the same object, and ordered and adjudged that the same be consolidated and thereafter conducted under the name of 'Case No. 39,457, F. M. Marriott, Consolidated, Plaintiff, vs. The Columbus, Sandusky & Hocking Railroad Company, et al., Defendants'; that the above order and judgment was not appealed from and remains in full force; that in the consolidated cause the defendant herein and all the other stockholders of the railroad company were made parties defendant, and all the defendants residing in Ohio were duly served with summons and all defendants not residing in Ohio, including Elliott, were duly served by publication in accordance with the statute of Ohio in such case made and provided; that on or about June 14, 1902, the court of common pleas referred the consolidated cause to one of the master commissioners of that court and ordered him 'to proceed according to law to determine what persons, firms and corporations, (other than those already parties thereto) should be made parties therein, to ascertain the address and residence of each of such stockholders in the defendant corporation, The Columbus, Sandusky & Hocking Railroad Company, to determine what transfers of stock had been made, and the dates of each, to determine the solvency or insolvency of the various stockholders, the amount of stock held by each, the indebtedness of said corporation, the names and addresses of its creditors, in such manner as is provided by law, and to do all other things necessary, proper and lawful to enforce the liabilities of the stockholders of said defendant corporation, and to report to said court his findings of fact and his conclusions of law thereon'; that in obedience to the said order and judgment of the court of common pleas the said master commissioner proceeded to carry out all the directions of said court, and thereafter, March 17, 1905, duly filed his report containing his conclusions of law and findings of fact in accordance with the said order and decree; that thereafter the consolidated cause came on to be heard by the court of common pleas upon the report of the master commissioner and the exceptions thereto and a motion to confirm the same, and thereafter, July 17, 1905, that court by a proper and final order, judgment and decree confirmed the said report and decreed, among other things, that the shares of stock of the railroad company were of the par value of $100 each, and further, that it at the time of filing the Marriott and Kinsey petitions in the court of common pleas and on July 17, 1905, was insolvent and had no assets of any kind with which to pay its debts, and further, that the unpaid valid and subsisting debts of the railroad company as found in the report of the master commissioner amounted with interest until March 1, 1905, to $706,251.55, and by reason of the amount of that indebtedness, the costs of the consolidated cause and the insolvency of the railroad company, it was necessary to make an assessment against each of its stockholders amounting to 25% of the par value of the shares held and owned by each such stockholder; that the court of common pleas did in and by the order and decree of July 17, 1905, find and adjudge that Elliott was then the owner of 325 shares of the said stock and there was then due from him as such stockholder to the creditors $8,125; that at the time of filing the Marriott and Kinsey petitions Elliott was a stockholder in the railroad company and was the owner and holder of the number of shares above mentioned; that the court of common pleas by its said decree appointed Ellsworth C. Irvine, plaintiff herein, receiver in the consolidated cause under the statute of Ohio in such case made and provided, and authorized, directed and empowered him to collect and enforce by suit or by such action brought in his own name as receiver as might be necessary or otherwise 'in any jurisdiction and before any court of competent jurisdiction' all assessments ordered and made or amounts due or found due by the said decree from such stockholders, including the amount found due from Elliott, and make proper distribution of the amount so recovered under the further orders of the court; that the said decree of July 17, 1905, is in...