S. M. Jones Co. v. Home Oil & Development Co
| Decision Date | 14 June 1909 |
| Docket Number | 17,463 |
| Citation | 49 So. 1009,124 La. 148 |
| Parties | S. M. JONES CO. v. HOME OIL & DEVELOPMENT CO |
| Court | Louisiana Supreme Court |
Rehearing Denied June 30, 1909.
Appeal from Fifteenth Judicial District Court, Parish of Calcasieu Winston Overton, Judge.
Action by the S. M. Jones Company against the Home Oil & Development Company.
Certain parties filed objections to the receiver's account, and from the judgment the receiver, plaintiff, and other judgment creditors appeal. Affirmed.
McCoy Moss & Knox, for appellants.
Schwing & Moore and Cline, Cline & Bell, for appellees.
OPINION
The receiver of the defendant company filed his first provisional account.
It is opposed on a number of grounds by creditors who are excluded on the account from participating in the distribution of the funds collected by the receiver.
The defendant company was organized to drill for oil in the Jennings field.
The receiver has collected $ 6,360.16, and expended the sum of $ 924.86.
He asks in this account to be permitted to pay to creditors a dividend of 40 per cent. (not including among the creditors the stockholder creditors).
They were excluded, on the ground, as he represents, that they are estopped because the stock of the corporation was issued, to their knowledge, for less than its par value.
The fact is, that part of the stock was sold for 33 1/3 cents, save 38,000 shares, which were sold for 12 1/2 cents of their par value. This included all the stock.
The receiver allowed other creditors to share in the distribution because, as he stated in the pleadings, they were not aware of this issue of stock for less than its par value, as just stated.
Going back to a period anterior to this provisional account: The receiver sued the creditors, who were stockholders, for the balance due on their stock; that is, for the difference between the amount that they paid for the stock and its par value.
They filed answers to the receiver's petition, in which they denied his right to recover the whole amount due by them respectively on their stock without allowing them credit for their respective claims as creditors against the corporation.
Judgment was rendered in the suit brought by the receiver against these stockholders in favor of the company for the difference between the amount paid for their stock and the par value. They were condemned to pay this difference. In this suit they had reconvened for the amount of their claims as creditors.
On this demand in reconvention they recovered judgment for the amount of their respective claims, but the court refused to allow them at that time to set off their respective claims as creditors against the judgment obtained by the company against them as stockholders. The court's decree was that the receiver must collect the judgment against the stockholders; that thereafter they would share in the distribution of the general fund; that is, they would in the end obtain payment of their respective claims.
It follows that the whole matter of rank and distribution was referred to the receiver. He was intrusted with seeing that in the end these creditors would be allowed their suit pleaded in reconvention.
The receiver (it appears by testimony) collected part of the sum due by the stockholders.
We will state here there is no question of bad faith on the part of the stockholders who were creditors, nor is it contended that the board of directors in any way mismanaged the business affairs of the company. Everything appears to have been done in the utmost good faith. The debts were regularly incurred and are due.
It having been decided by this court in prior decisions, and it being well settled, that the liability for stock to pay debts of the corporation and to liquidate and adjust its affairs on an equitable basis cannot be discharged save by payment, we will not discuss that proposition at any length. Belknap, Receiver, v. Adams, 49 La.Ann. 1350, 22 So. 382.
The directors and stockholders who are creditors of a...
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