Stevens v. Tilden
| Citation | 142 N.W. 315,122 Minn. 250 |
| Decision Date | 27 June 1913 |
| Docket Number | 18,086 - (176) |
| Parties | R. NELSON STEVENS and Another v. W. A. TILDEN |
| Court | Supreme Court of Minnesota (US) |
Action in the district court for Ramsey county by the receivers of the Empire Casualty Company, a foreign corporation, to recover $974.79. From an order, Brill, J., overruling his demurrer to the amended complaint, defendant appealed. Affirmed.
Complaint by foreign receiver -- demurrer.
1. Where there was nothing in a complaint by foreign receivers of a foreign corporation to recover a stock subscription, to show, either expressly or by implication, that the appointing court made its adjudication under its general equity powers or without statutory authority, or that it exceeded its jurisdiction, a general demurrer founded upon the existence of such jurisdictional defects was properly overruled.
Complaint by foreign receiver.
2. The right of the receivers to sue in this state was properly sustained as against the demurrer, it appearing from the complaint that they were duly authorized by the appointing decree to sue upon claims due the corporation, and there being no showing of the existence of domestic creditors who would be prejudiced by the maintenance of the action.
Comity.
3. The rule of comity whereby the receivers were entitled to maintain the action, held not affected by the fact that plaintiffs were appointed by a Federal court.
Durment Moore & Sanborn, for appellant.
Orr Stark & Collett, for respondent.
Appeal from an order overruling defendant's demurrer to the complaint on the grounds of its failure to state a cause of action and of plaintiff's legal incapacity to sue. The action is for recovery of the balance due on a corporate stock subscription, and, in addition to the usual averments, it is alleged, in effect, that the minority stockholders of the corporation filed a petition and bill in equity in the United States Circuit Court for the Northern District of West Virginia, its home, charging its officers and directors with mismanagement, and praying their enjoinment from disposing of the assets, the appointment of receivers to take possession thereof, and to collect and administer them for the benefit of stockholders and creditors, and for dissolution. It is further alleged that the court duly found the allegations of the bill to be true, justifying the appointment of receivers and issuance of an injunction restraining the corporation from disposing of its assets, and duly appointed plaintiffs permanent receivers, who were "ordered and required, after giving bond to be approved by the court, to take possession of all the assets and effects" of the corporation, and to "collect the debts and liabilities that may be due to it, with full authority in their names as receivers, or in the name of the corporation, to sue for and recover such debts and liabilities in any court." Due filing and approval of the receivers' bond was alleged.
1. The claim advanced in support of the general demurrer is that it appears from the complaint that the corporation was not insolvent and the proceedings resulting in the appointment of receivers is not shown to have been for the purpose of protecting creditors, but appears to have been merely an appeal by minority stockholders to a court of equity to exercise its equity powers to dissolve the corporation and distribute its property. Thus premised, the contention is that the foreign court's grant of the alleged relief was beyond its equitable jurisdiction and general powers, and required statutory authority, which is not alleged and cannot be presumed; furthermore, that the consent of the corporation thereto would not confer jurisdiction, nor bind the defendant.
We may concede defendant's right to attack the judgment collaterally, which is not free from serious doubt (see Basting v. Ankeny, 64 Minn. 133, 66 N.W. 266; Stone v. Penn Yan, 197 N.Y. 279, 90 N.E. 843, 134 Am. St. 879; 34 Cyc. 164), and that the general equity powers of the Federal court were insufficient, in the absence of statute, to warrant the relief granted. Yet the contentions are unavailing. Said the present Chief Justice, in First Nat. Bank of Hastings v. Corporation Securities Co. 120 Minn. 105, 107, 139 N.W. 296:
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