Markell v. Ray
| Decision Date | 27 December 1898 |
| Citation | 75 Minn. 138,77 N.W. 788 |
| Parties | MARKELL v. RAY et al. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from district court, St. Louis county; S. H. Moer, Judge.
Action by Clinton Markell, as assignee of Henry H. Bell, insolvent, against Robert C. Ray and others. From a judgment for plaintiff, certain defendants appeal. Modified.
1. If it was error to amend the complaint by an ex parte order, held, it became error without prejudice, because the same amendment was subsequently allowed on a motion made on due notice.
2. It cannot be held that by section 5927, Gen. St. 1894, an action to charge the distributees of the estate of a deceased stockholder with his stockholder's liability, to the extent of the estate received by them, is barred in one year after the corporation goes into insolvency.
3. Held, a minor, as well as a person sui juris, may be brought into an action, as an additional party defendant, by the service on him of an order reciting the summons, as provided by section 5178, Gen. St. 1894.
4. It appeared by the books of the corporation that a certain number of shares of its stock were held by two certain persons. It did not appear by the books or otherwise that they were partners, or held the stock as such. Held, they were tenants in common, each of an undivided one-half interest in the stock, and neither can be held for more than one-half of the stockholder's superseded liability.
5. The executor, pursuant to the provisions of the will, procured stock, which stood in his own name on the books of the corporation, to be transferred to him as executor. Thereafter the corporation went into insolvency. Held, the estate thereby became primarily liable, and he became secondarily liable, on such stock. Held, under section 3419, Gen. St. 1894, whether the stock stood in the name of the testator or not, the executor does not make himself personally liable thereon by having the same transferred to himself as executor, when the will authorizes such transfer.
6. Five years before this action was commenced, or the corporation went into insolvency, one of its stockholders, who was also one of its creditors, made an assignment under the insolvency law; and his stock, and the debt due to him from the corporation, passed to his assignee. Such debt has not been paid, and his estate has not been settled. Held, the liability on his stock is not, at law, a claim against the assets in the hands of his assignee, but equity will set off one claim against the other. However, under the circumstances, the stockholder's liability should be set off, not merely against the dividend coming to the assignee as creditor, but against the whole claim held by him. Billson, Congdon & Dickinson, for appellants.
Abbott & Crosby (Walter Ayers, of counsel), for respondent.
Schmidt, Reynolds & Mitchell, Walter Ayers, Howard T. Abbott, and Victor Stearns, for various interveners.
This is an action under chapter 76, Gen. St. 1894, brought on behalf of the plaintiff and all other creditors of the Masonic Temple Association of Duluth, an insolvent corporation, to enforce the double or superadded liability of its stockholders.
1. The action was commenced October 31, 1895. Only a few of the alleged stockholders were then made parties to the action, and among those were Robert C. Ray and Caroline E. Ray. October 23, 1896, the complaint was, on the application of plaintiff, amended by an ex parte order of the court so as to set up a new cause of action against Robert C. Ray and Caroline E. Ray. They moved to set aside the order allowing the amended complaint, and their motion was denied. This they assign as error. Whether or not the court erred in amending the complaint by the exparte order, and in denying the motion to set the amendment aside, and whether or not these acts of the court were error without prejudice, it is not necessary to decide, for the reason that on June 26, 1897, the complaint was again amended, on motion made on notice, and, as so amended, contained the amendment allowed ex parte as aforesaid, superseded it, and cured the alleged error. As we will now proceed to show, the statute of limitations had not, on June 26, 1897, run against said new cause of action.
2. In the original complaint Robert C. Ray and Caroline E. Ray were charged only as stockholders. The amended complaint alleged: That they and Marion Ray are the devisees of James D. Ray, who at the time of his death, on April 27, 1894, was the owner and holder of 1,400 shares of the capital stock of said temple association, of the face value of $25 each. That the debt due from the temple association to plaintiff was incurred prior to that time. That James D. Ray left at his death real and personal property of the value of more than $500,000, which by his last will he devised as follows: One-third to his widow, said Caroline E. Ray; one-half to his son, said Robert C. Ray; and the remaining one-sixth to his daughter, Marion Ray. That the will was duly probated, the estate administered, and on May 1, 1895, all the estate remaining was distributed to said devisees in said proportions,-the value of the estate so distributed being $350,000,-and the executor was then discharged. On these facts the amended complaint sought to charge the three devisees, under sections 5918-5929, Gen. St. 1894, for the stockholder's liability of said James D. Ray. The temple association made a general assignment for the benefit of its creditors, under the insolvency law, on October 31, 1895,-the day that this action was commenced. Appellant contends that under section 5927, Gen. St. 1894, the statute of limitations would have run against this claim in one year from that date, were it not for the fact that the complaint was amended ex parte, within the year, so as to set up the cause of action against the devisees as such, and that, therefore, appellant is prejudiced by this amendment. Section 5927 provides: ‘No action shall be maintained [against heirs or devisees on such a claim] unless commenced within one year from the time the claim is allowed or established.’ We cannot hold that, as appellants contend, the commencement of this action on October 31, 1895, is equivalent or analogous to the allowing or establishing of this claim against these devisees, within the meaning of this section, so as to start the statute of limitations running. In what court or in what manner this section contemplates that the claim shall be ‘allowed or established,’ we need not consider, but we are strongly of the opinion that appellants' contention cannot be sustained.
3. At the time said amended complaint was allowed, said Marion Ray, a minor, was brought in as an additional party defendant, by an order reciting the summons, and requiring her to answer the complaint, as provided in section 5178, Gen. St. 1894. There is nothing in the claim that a minor cannot be made a defendant in this manner, and can only be made a defendant in such a case by amending the summons, and serving the same as amended. We see no reason why section 5178 does not apply to minors as well as to persons sui juris.
4. On October 31, 1895, the day of the commencement of this action, and the day the corporation made the assignment and ceased to be a going concern, 774 shares of its...
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