Jacobson v. Allen

• Decision Date: 20 June 1882
• Citation: 12 F. 454
• Parties: JACOBSON, Receiver, etc., v. ALLEN, Exr., etc., and others.
• Court: U.S. District Court — Southern District of New York

12 F. 454

JACOBSON, Receiver, etc., v. ALLEN, Exr., etc., and others.

United States Circuit Court, S.D. New York.

June 20, 1882

Howard Mansfield, for defendant.

Johnson Cantine & Dening, E. Patterson, Martin & Smith, and Reynolds & Lowrey, for defendants.

WALLACE C.J.

Without passing upon subordinate questions raised by the demurrer the bill must be held bad because the right of action sought to be enforced does not exist in favor of the complainant. The defendants are sued as stockholders of the bank of Chicago, an insolvent corporation of the state of Illinois and the bill seeks to charge them with a liability imposed by one of the sections of the incorporating act, which provides that 'each stockholder shall be liable to double the amount of stock held or owned by him, and for three months after giving notice of transfer. ' The bill alleges that in a suit brought by a creditor of the bank in superior court of Cook county, Illinois, the complainant was duly appointed by that court 'receiver of all the estate, property, and equitable interests of said bank,' and duly qualified and has ever since acted as such receiver. Unless the right of action to recover the statutory liability of stockholders was part of the 'estate property or equitable interests' of the bank, it did not pass to the receiver under his appointment. Not only because of the allegation of the bill but also from the inherent nature of a receiver's title, the complainant did not acquire the right to enforce the statutory liability, if it existed, only in favor of creditors of the bank and not in favor of the corporation. It is not contended that the corporation could have enforced this liability against the stockholders, but the position is taken that upon the insolvency of the corporation a fund arises by force of the statutory provision for the benefit of the creditors of the corporation, which is to be deemed part of the equitable assets of the corporation. Undoubtedly such provisions are intended to create a fund for the benefit of creditors in case of the insolvency of the corporation; but whether the creditors can resort to the fund jointly or only severally, and whether the right of the creditor is one at law or one to be enforced in equity and in subordination to the rights of the whole body of creditors, depends in each case upon the terms of the particular statute. Obviously the fund resembles an asset of the corporation more nearly when by the terms of its creation it constitutes an equitable fund for the common benefit of all the creditors, than it does when it is secured to the creditors severally and at law.

Under this particular statute it has been determined by the courts of Illinois that a creditor of the corporation may sue individually and at law, (McCarthy v. Lavasche, 89 Ill. 270;) and under a similar statute it was held by the same court that the creditor's right of action was not divested by the appointment of a receiver of the corporation. Arenz v. Weir, 89 Ill. 25. Undoubtedly, if the liability were merely a several one in favor of the creditors, no one creditor could be divested of his right of action by any proceeding or judicial decree to which he was not a party, and therefore a receiver appointed in a suit brought by one creditor against the corporation could not acquire the rights of the other creditors. Wincock v Turpin, 96 Ill. 135. It has not been definitely determined by the courts of Illinois that a suit might not be maintained in equity by all the creditors, or one in behalf of all, to recover to the stockholders when the liability is imposed in the terms employed in the present statute. If the question were to be determined irrespective of the adjudication of that state, it would hardly be deemed doubtful that the act creates a...