State v. Blair

• Decision Date: 14 November 1911
• Citation: 238 Mo. 132,142 S.W. 326
• Parties: STATE ex rel. McINDOE et al. v. BLAIR, Circuit Judge.
• Court: Missouri Supreme Court

142 S.W. 326

238 Mo. 132

STATE ex rel. McINDOE et al. v. BLAIR, Circuit Judge.

Supreme Court of Missouri.

November 14, 1911.

Rehearing Denied December 16, 1911.

1. COURTS (§ 12)—JURISDICTION.

Under Rev. St. 1899, § 985, providing that, if an execution against a corporation shall be returned nulla bono, then such execution may be issued against any of the stockholders to the amount of the unpaid balance on their stock, but that no execution shall be issued against any stockholder until he shall have been brought in upon sufficient notice in writing, and section 987, providing that if any corporation shall dissolve, leaving debts unpaid, suits may be brought against any debtor stockholders at the time of such dissolution for the recovery of the portion of debt for which they were liable, a stockholder of a bankrupt corporation must have personal notice before he can be proceeded against, for there must be a trial to determine his liability, and a personal judgment must be rendered against him, and hence an attachment of the property of a nonresident stockholder does not give the court jurisdiction over his person.

2. ATTACHMENT (§ 293)—JURISDICTION—ORDER ON NONRESIDENTS TO INTERPLEAD.

Attachment being a legal proceeding, a court issuing the writ is without authority to compel a nonresident to appear and litigate his rights to the fund attached.

In Banc. Original petition by the State, on the relation of Hugh McIndoe and another, for prohibition directed against David E. Blair, as Judge of the Circuit Court of Jasper County. Permanent writ issued.

This is an original proceeding instituted in this court, seeking to prohibit the circuit court of Jasper county from further proceeding with the trial of two certain causes pending therein, namely, the Independent Powder Company v. Arthur Kennedy, and the Joplin Supply Company v. Arthur Kennedy. Both involve the same issues in fact and propositions of law. In order to correctly understand the questions here presented, it will only be necessary to set out the return of the respondent, and the report of the special commissioners appointed by this court, to hear the evidence, etc. The petition for the writ of prohibition is very lengthy, and it will for that reason be omitted from this statement.

The return (formal parts omitted) is substantially as follows: Admits that the respondent is one of the judges of the circuit court of Jasper county; that the Independent Powder Company of Missouri and the Joplin Supply Company are corporations, organized under the laws of Missouri; that on November 16, 1905, each of said corporations instituted a suit and obtained judgments in said court, against the Florence Mining Company, a corporation, for the sums and amounts stated in relator's petition; and that on the ____ day of ____, 1906, the Florence Mining Company was duly adjudged a bankrupt, etc. Respondent admits that on November 16, 1907, both the Independent Powder Company and the Joplin Supply Company instituted suits by attachments against Arthur Kennedy, who was a nonresident of the state of Missouri, by petitions which were substantially as follows:

"Comes now the plaintiff and states that it is a corporation organized and existing under and by virtue of the laws of the state of Missouri, and that the defendant Arthur Kennedy is a nonresident of the state of Missouri and resides in and is a resident of the state of Pennsylvania. Plaintiff for its cause of action states that at the dates shown by the itemized account hereto annexed, at the special instance and request of the Florence Mining Company, a corporation, it sold and delivered to said corporation certain goods, wares, and merchandise of the value and for the price of $2,706, the items of which, as well as the dates when the various articles were sold and the prices charged therefor respectively, appear from the bill of items hereto annexed, marked `Exhibit A.' Plaintiff states: That the prices charged therefor were reasonable, and that the said corporation promised and agreed to pay the same, but failed to do so. That thereafter, on the ____ day of ____, 1906, this plaintiff sued said corporation in the circuit court of Jasper county, Mo., and obtained a judgment against it for said claim and interest, being $3,040.91. That within four months thereafter, to wit, on the 6th day of August, 1906, the said corporation was adjudged a bankrupt by due process of law. That no part of said judgment has been paid. That thereafter this plaintiff presented said judgment to the referee in bankruptcy, and the same was filed, and the sum of $3,040.91 allowed as a claim against said bankrupt corporation. That there is still due this plaintiff, after giving credit for the amount of $905.99 to be paid by the trustee in bankruptcy to this plaintiff, the sum of $2,134.92; said sum being still due upon said judgment so allowed by the referee in bankruptcy and upon the original account and is still unpaid. Plaintiff further states that the Florence Mining Company was a corporation organized under the laws of the state of Missouri, and under chapter 12 of the Revised Statutes of the state of Missouri, on or about the ____ day of April, 1905, with a capital stock of $100,000 divided into 100,000 shares of the par value of $1 each. That in May, 1905, a mining lease standing in the name of H. W. Bishop and in which Arthur Kennedy had a certain interest was assigned to the corporation for the capital stock of the same. Plaintiff further states: That, at the time that the lease was assigned with all improvements thereon, the said leasehold interest and improvements was not worth to exceed $12,000. That the stockholders undertook to set apart 25,000 shares of said stock as treasury stock to be held and used for the benefit of the company. That out of the 75,000 shares of stock there was issued to Arthur Kennedy 30,000 shares representing his interest in the lease, which said interest is alleged to be a four-tenths interest. The plaintiff further states that on this 30,000 shares he paid an assessment or contribution of five cents per share. That thereafter, to wit, on the ____ day of ____, 1905, the Florence Mining Company caused the 25,000 shares of treasury stock to be transferred or to be issued to the said Arthur Kennedy, and the owner paid therefor $12,500. The plaintiff further alleges: That the said Arthur Kennedy was a party to the arrangement by which the company was organized and the lease conveyed to it and the stock issued as above recited, and that all of the transactions of the corporation was done by and with his consent and active concurrence and with the full knowledge of all of these facts and of the character and value of the property in payment of its capital stock. That the said Arthur Kennedy was, at the date and time the plaintiff herein gave credit to said corporation, the owner and holder of 55,000 shares of the capital stock of the Florence Mining Company. That he had only paid thereon the sum of $18,800, leaving a balance unpaid upon said stock in the sum of $36,200, which he had never paid to said corporation and had never notified this plaintiff that the same was unpaid. The plaintiff further states: That the Florence Mining Company, a corporation, has been dissolved. That on or about the 6th day of August, 1906, it became totally insolvent and bankrupt, and a petition was filed in the United States District Court for the Southwestern Division, Judicial District of Missouri, against it by a part of the creditors of said Florence Mining Company, and on the 6th day of August, 1906, the said Florence Mining Company was adjudged and declared a bankrupt. That the total amount of its assets were reduced to cash by the trustee in bankruptcy and realized only the sum of $8,250. Whereby it became dissolved, being unable by reason of a total want of funds and means to exercise its corporate powers. That the total amount of debts proved up against said bankrupt was as follows: By Arthur E. Kennedy the sum of $11,102.48, and by other creditors, including this plaintiff, the total sum of $13,764.45, making a total amount of the indebtedness proved up against said bankrupt of the sum of $24,866.93. The plaintiff further states that, at the time Arthur Kennedy procured and acquired the 55,000 shares of stock so held by him, he took and acquired the same with full knowledge of the nonpayment of the capital stock, and that by failing to pay the full amount of the capital stock so held by him was guilty of a fraud upon the creditors of said Florence Mining Company, and thereby and under the statutes of the state of Missouri became liable to the defendant for such an amount as was due it from the corporation, to wit, the sum of $2,134.92. Wherefore plaintiff asks judgment against the defendant Arthur Kennedy for the sum of $2,134.92 and costs of suit." Then follows signatures of attorneys.

"That thereupon a writ of attachment was issued against the property and effects of Arthur Kennedy and money claimed to be in the hands of John M. Malang was attached and thereafter, owing to the fact that John M. Malang was trustee in bankruptcy, he was discharged. That the publication was in words as alleged by relators and admits that the same was duly published. Respondent alleges that on the 6th day of February, 1908, in open court an order was made in each of said causes that alias writ of attachment issue against Arthur Kennedy in each of said causes commanding the sheriff to attach goods, tenements, and moneys of Arthur Kennedy. That on the 10th day of February, 1908, McIndoe & Thurman were summoned as garnishees, as alleged by them. That publication was issued and published in each of said causes as alleged by relators, and that the same was duly published, and alleges that proof thereof was made to the said court. That interrogatories were filed as alleged by relators in each of said causes, and that answers were filed...