Neff v. Lamm

• Decision Date: 27 July 1906
• Docket Number: 14,820 - (166)
• Citation: 108 N.W. 849,99 Minn. 115
• Parties: PORTER J. NEFF v. LEO S. LAMM
• Court: Minnesota Supreme Court

108 N.W. 849

99 Minn. 115

PORTER J. NEFF v. LEO S. LAMM

Nos. 14,820 - (166)

Supreme Court of Minnesota

July 27, 1906

Appeal by defendant from an order of the district court for Blue Earth county, Lorin Cray, J., denying a motion for a new trial. Affirmed.

SYLLABUS

Claim against Estate -- Assessment against Stockholder.

The receiver of an insolvent corporation filed a claim in the probate court against the estate of a deceased stockholder for the amount of an assessment levied by order of the court appointing him. It is held that, inasmuch as the issue whether or not the corporation was of such a class that its stock was subject to assessment was not affirmatively asserted by the answer nor raised during the trial; and that inasmuch as no objection was made to the court making the order and assessment, the objection by the executor to the claim on the ground that the receiver failed in fact to introduce any evidence to prove the assessable character of the stock was without merit.

Enforcement of Assessment.

The proceeding in probate court was an action to enforce the order and assessment on stockholders, within the meaning of section 6, c. 272, p. 317, Laws 1899.

Evidence.

The evidence sustains the finding of fact that the deceased was a stockholder, as claimed by the receiver.

A. E Clark and Pfau & Pfau, for appellant.

Porter J. Neff and Leon E. Lum, for respondent.

OPINION

JAGGARD, J.

The plaintiff and respondent filed in the probate court of Blue Earth county a claim for $5,000 against the estate of Stephen Lamm, deceased, dated September 20, 1904. That claim was for an assessment levied by the order of the district court of St. Louis county upon the capital stock of the Motor Line Improvement Company, a defunct corporation, of which the plaintiff was receiver. It was contended that Stephen Lamm at the time of his death was the owner of fifty shares of capital stock of that corporation of the par value of $100 per share. Objections to the allowance of the claim were duly made, and the court allowed the claim in full. Appeal was taken to the district court, where, upon pleadings framed, the court, after hearing, filed findings in favor of the plaintiff. From an order denying a motion for a new trial this appeal was taken.

1. The defendant insists that because plaintiff failed in fact to introduce any evidence showing that the corporation was of such a character that stockholders were legally liable to a statutory assessment upon their stock, the plaintiff failed to make out a cause of action. The complaint alleged that the corporation was of such a character. The answer contained a general denial, and set up other defenses consistent only with the right to assess stockholders. It did not set up as a separate defense that the corporation was not of such a class that its stock was subject to statutory assessment. The course of the trial also might reasonably be construed to have waived the question.

At the hearing in the original proceedings against the corporation which are contemplated by the act providing for "the better enforcement of the liability of stockholders of corporations" (Laws 1899, p. 315, c. 272), the court is required to consider proofs entirely "as to what parties are or may be liable as stockholders of said corporation, and the nature and extent of such liability" and whether the assessment made at such hearing is necessary. The order and assessment by that court are necessarily based upon a determination that the corporation is of the class whose stock is assessable, and not of the excepted class mentioned in section 3, art. 10, Const. Minn. That section reads as follows:

Each stockholder in any corporation, excepting those organized for the purpose of carrying on any kind of manufacturing or mechanical business, shall be liable to the amount of stock held or owned by him.

The order and assessment in these preliminary proceedings is expressly made conclusive "as to all matters relating to the amount of, and the propriety of, and necessity for the said assessment." Laws 1899, p. 317, c. 272, § 5; Straw & E. Mnfg. Co. v. L.D. Kilbourne B. & S. Co., 80 Minn. 125, at page 136, 83 N.W. 36. Jurisdiction of the corporation is jurisdiction of the stockholders in these respects. Id. And...