Shipman v. Treadwell

• Decision Date: 27 January 1911
• Parties: SHIPMAN v. TREADWELL et al.
• Court: New York Court of Appeals Court of Appeals

200 N.Y. 472

93 N.E. 1104

SHIPMAN

v.TREADWELL et al.

Court of Appeals of New York.

Jan. 27, 1911.

Action by Leonard H. Shipman, as receiver of the F. Gray Company, against George O. Treadwell and another. From a judgment of the Appellate Division (134 App. Div. 991,119 N. Y. Supp. 1144) affirming a judgment overruling defendants' demurrer to the complaint, defendants appeal. Affirmed.

James F. Tracey, for appellants.

Andrew J. Nellis, for respondent.

WERNER, J.

This is an action brought by a receiver of an Ohio corporation to recover from stockholders thereof residing within this state their equal and ratable proportion of a deficiency in corporate assets with which to pay the corporate debts. The appeal is from the affirmance of a final judgment entered after an interlocutory judgment overruling the defendants' demurrer to the complaint. The demurrer was based upon two grounds: (1) That there is a defect of parties defendant. (2) That the complaint does not state facts sufficient to constitute a cause of action. As the first of these grounds is not urged upon this appeal, we shall proceed at once to a consideration of the second.

The complaint is so voluminous that we cannot attempt to paraphrase, much less to reproduce, it in detail, and we shall simply summarize its most salient and essential features. It first sets forth the organization of the corporation under the laws of the state of Ohio, and its continuance until about April 16, 1901, when proceedings for its dissolution eventuated in a decree to that end made by a court of competent jurisdiction; that the defendants, at some time prior to December, 1900, became stockholders of the corporation under an agreement that the laws of the state of Ohio then existing and thereafter to be enacted with reference to domestic corporations in that state, their organization, the liability of stockholders, the ascertainment thereof, the dissolution of the corporation, and the application of its assets, including the liability of stockholders under and pursuant to the laws of that state, should be taken as part and parcel of the agreement whereby the defendants severally agreed to become members of the corporation; that under the laws of Ohio stockholders in domestic corporations are liable to the creditors of such corporations over and above the stock owned by them, and any amount unpaid thereon, to a further sum at least equal in amount to such stock, equally and ratably, and not one for another; that prior to December 10, 1900, a majority of the stockholders of said corporation instituted a proceeding for the dissolution of said corporation in a court of general jurisdiction in that state, in which the corporation and its stockholders, including these defendants, were parties; that pursuant to the practice which obtains in that state the court appointed a receiver and a master commissioner, the one to take and hold the assets of the corporation, and the other to take such proofs as might be necessary to determine whether the corporation was solvent or insolvent, the extent and value of its assets, and the nature and amount of its indebtedness; that such proceedings were had that the corporation was declared insolvent and that an assessment would have to be made upon the stockholders to satisfy the corporate debts; that under the direction of the court an assessment was made upon each of the stockholders, including the defendants, of $61.92 per share upon the stock owned by them; that such assessment against the defendant Treadwell amounted to $4,458.24 and against the defendant Collins to $3,096, these amounts representing the pro rata shares which each of these defendants had been adjudged liable to pay for the purpose of making good the deficiency in the corporate assets necessary to satisfy the corporate debts; and that there are no creditors of the corporation residing within this state; that all the tangible assets within the state of Ohio have been used in the payment of the corporate debts, and that it is...