Sharples Co. v. Harding Creamery Co.
| Decision Date | 18 April 1907 |
| Docket Number | No. 14,555.,14,555. |
| Citation | 78 Neb. 795,111 N.W. 783 |
| Parties | SHARPLES CO. v. HARDING CREAMERY CO. ET AL. |
| Court | Nebraska Supreme Court |
Where an insolvent corporation, in fraud of its creditors, transfers its assets to a new corporation, not the successor of the old, without consideration other than the issuance of stock to the stockholders of the old corporation, the corporation receiving such assets is liable to the creditors of the old corporation only to the extent of the value of the property received.
In such case an action at law will not lie against the receiving corporation.
Commissioners' Opinion. Department No. 2. Appeal from District Court, Douglas County; Redick, Judge.
Action by the Sharples Company against the Harding Creamery Company and others. Judgment for defendants, and plaintiff appeals. Affirmed.Jefferis & Howell, for appellant.
Brome & Burnett, for appellees.
The plaintiff sued the Harding Creamery Company and the appellee the Nebraska-Iowa Creamery Company upon two promissory notes executed by the Harding Creamery Company. Issues were joined, and a jury impaneled, when the Nebraska-Iowa Creamery Company demurred to the petition ore tenus, which was sustained, and thereupon the court directed a verdict for the plaintiff against the Harding Creamery Company and in favor of the Nebraska-Iowa Creamery Company. Judgment was entered on the verdict. The plaintiff appeals.
The questions presented by the appeal are all involved in the action of the trial court in sustaining the demurrer of the Nebraska-Iowa Creamery Company to the plaintiff's petition. The allegations of the petition are, in substance: That the Harding Creamery Company made, executed, and delivered to the plaintiff two certain promissory notes, which were unpaid. At the time the indebtedness was contracted and the notes given Robert A. Stewart was a stockholder, director, and president of the Harding Company. That he owned and controlled more than one-half of the stock of that company. That he knew of the indebtedness to the plaintiff. That, when the notes became due, the Harding Company was insolvent. That it owned certain real estate in the city of Norfolk of the value of $20,000. That the property was equipped with machinery and appliances for conducting a creamery business, and was occupied and used for that purpose by the Harding Company. That Stewart, being president of the company and owning a controlling interest, became a promoter and participant in the formation of the Nebraska-Iowa Creamery Company for the purpose of taking and continuing the property, both real and personal, assets and business of the Harding Company, and other similar corporations and copartnerships located in Nebraska and Iowa, thereafter conducting the business previously conducted by the Harding Company and other companies, and with the further purpose of thereby hindering and delaying the creditors of the Harding Company, including the plaintiff, in the collection of their demands against the Harding Company. That, pursuant to the plan, the Harding Company conveyed to Stewart its property, including the real...
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