Oswald v. St. Paul Globe Pub. Co.

• Decision Date: 18 January 1895
• Parties: OSWALD ET AL. v. ST. PAUL GLOBE PUB. CO. ET AL.
• Court: Minnesota Supreme Court

60 Minn. 82

61 N.W. 902

OSWALD ET AL.

v.ST. PAUL GLOBE PUB. CO. ET AL.

Supreme Court of Minnesota.

Jan. 18, 1895.

(Syllabus by the Court.)

1. The nature of the business of the defendant corporation, as expressed in its articles of incorporation, is, among other things, the publishing of a daily and weekly newspaper. Held, it is not an exclusively manufacturing corporation, and its stockholders are not exempt from liability to its creditors on their paid-up stock.

2. Held, the making of the lease here in question was not ultra vires on the part of the defendant corporation.

3. An action to set aside a fraudulent transfer of all the corporate assets was commenced by a stockholder against the corporation and the transferee, and a receiver was appointed. Held, that action cannot be pleaded either in bar or abatement of an action afterwards brought, under chapter 76, Gen. St. 1878 (sections 5889-5911. Gen. St. 1894), by a creditor of said corporation in favor of himself and all other creditors and against the corporation (then insolvent) and all its stockholders, and for the appointment of a receiver.

4. After the commencement of the latter action an order was made in the former action under section 23, c. 76, Gen. St. 1878 (section 5911, Gen. St. 1894), ordering creditors to exhibit their claims and become parties to that action. Held, that action was not a proper one in which to make that order, but, conceding that the order is irregular, and not void, and cannot be impeached collaterally in the latter action, still the order does not relate back to the time of the commencement of the former action in which it was made, but takes effect only from the time it was made, which was after the commencement of the latter action, in which jurisdiction was therefore first obtained for the purpose of that action, and, being first obtained, can be maintained, notwithstanding the change in the character of the former action.

Appeal from district court, Hennepin county; Charles M. Pond, Judge.

Action by John C. Oswald and others against the St. Paul Globe Publishing Company and others to recover rent. From a judgment for plaintiffs, and an order denying their motion from a new trial, defendants appeal. Affirmed.

Ankeny & Irwin, Harvey Officer, and D. Murphy, for appellants.

A. D. Smith and A. Ueland, for respondents.

CANTY, J.

On the 1st day of May, 1889, by a written lease in due form, the Daily Globe Building Company rented its premises and building in Minneapolis known as the “Globe Building” to the St. Paul Globe Publishing Company for the term of 21 years from and after that date, at a yearly rental of $15,000, payable quarterly, and which the publishing company covenanted to pay, and also to pay all taxes and assessments levied or to become due on the premises during the term of the lease. The publishing company went into possession on that day, and remained in possession until May 1, 1893. There is now due from the publishing company to the building company for such taxes and rent coming due during that time the sum of $45,658.77. At the time of the commencement of this action the publishing company was insolvent. The plaintiffs hold a minority of the stock of the building company, the majority of such stock being held by the officers, directors, and stockholders of the publishing company, who also constitute a majority of the managing officers and directors of the building company, and who, it is alleged by the plaintiffs and found by the trial court, control the affairs of the building company; and refused, on the demand of these plaintiffs, to take any steps to recover of the publishing company the amount so due for such rent and taxes. For this reason this action was commenced by the plaintiffs, as such stockholders of the building company, on its behalf, to procure judgment in its favor against the publishing company for said amount due under said lease. This action is brought on behalf of all other creditors of the publishing company and against it and all of its stockholders to ascertain and enforce their constitutional liability, and for the appointment of a receiver of the publishing company, under chapter 76, Gen. St. 1878 (section 5889-5911, Gen. St. 1894). No objection is made in this court to the right of these plaintiffs thus to maintain the action. After the commencement of the action a receiver of the publishing company was appointed by the court below. Notice was given, under section 23, c. 76, Gen. St. 1878 (section 5911, Gen. St. 1894), to all other creditors of the publishing company, to exhibit their claims, and become parties to the action. A number of such other creditors came in, and exhibited their claims, and joined in the proceedings. On the trial before the court without a jury all of the issues were found in favor of plaintiffs, and the claims of said other creditors were found in their favor, and duly allowed; judgment was ordered in favor of the building company and of each of said other creditors for the amounts so found due him; the receiver was ordered to convert the assets of the publishing company into money, and, after deducting necessary expenses, to pay all of said claims, if the funds remaining in his hands were sufficient therefor; the amount of stock so held by each of the defendant stockholders was ascertained, and it was ordered that, in case such assets were not sufficient so to pay all of said claims in full, after deducting such expenses, judgment be entered against the stockholders pro rata for the balance, not exceeding, however, the amount of stock held by each defendant. Judgment was ordered accordingly, and from an order denying their motion for a new trial the defendants appeal.

1. It is urged by appellants that the publishing company is a manufacturing corporation, and that, therefore, its stockholders are not liable on their stock, the same being fully paid up. The nature of the business of the publishing company, as set out in its articles of incorporation, is “the printing and publishing of a daily and weekly newspaper, and the printing and publishing of such other newspapers or publications as the corporation may at any time desire to undertake; also the conducting of a general job and book printing business, lithographing, electrotyping, stereotyping, and book binding, and all other business connected with the foregoing and with printing and publishing.” In order to exempt the stockholders from liability to the creditors, the corporation must be an exclusively...