Turnbull v. Payson

• Decision Date: 01 October 1877
• Parties: TURNBULL v. PAYSON
• Court: U.S. Supreme Court

95 U.S. 418

24 L.Ed. 437

TURNBULL v. PAYSON.

October Term, 1877

ERROR to the Circuit Court of the United States for the District of Maryland.

The facts are stated in the opinion of the court.

Mr. Edward Otis Hinckley for the plaintiff in error.

Mr. D. K. Tenney, contra.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

Stockholders in the bankrupt company were made liable by the act of incorporation 'in all cases of losses exceeding the means of the corporation,' each to the amount of the stock which he held; and the record shows that the defendant, at the time of the alleged loss, held fifty shares of the stock, eighty per cent of which was unpaid.

Sufficient also appears to show that the insurance company, on the 9th of October, 1871, met with losses by fire which exhausted all their funds and effects; and that the corporation, on the 14th of November of the next year, was duly adjudged bankrupt by the District Court for the Northern District of Illinois, the insurance company having its principal place of business at Chicago, in that district.

Due notice was given of the adjudication; and the creditors, at their first meeting, chose the plaintiff below the assignee of the estate and effects of the bankrupt company. No opposing interest appearing, the register, by an instrument under his hand, assigned and conveyed to the assignee all the estate, real and personal, of the bankrupt company.

Regular proceedings followed; and the bankrupt court, on the 4th of February, 1873, entered a decree that a call or assessment of sixty per cent upon the stock of the stockholders was necessary for the purpose of raising funds to pay losses incurred by the bankrupt company in its insurance business, and ordered and directed the assignee to proceed to make the assessment.

Pursuant to that decree, the assignee made the assessment, and filed in the bankrupt court due proof that he had given the notices prescribed in the decree. Payment being refused by the defendant, the plaintiff instituted the present suit in the District Court for the District of Maryland, to recover the amount of the assessment on the fifty shares held by the defendant. Service was made, and the defendant appeared and pleaded that he never promised. Other proceedings took place, which it is not necessary to notice; and at the next term the parties went to trial, and the verdict and judgment were in favor of the plaintiff. Exceptions were duly taken by the defendant; and he sued out a writ of error, and removed the cause into the Circuit Court, where the parties ere again heard, and the Circuit Court affirmed the decree of the District Court.

Cases of the kind may be re-examined here as well as in the Circuit Court upon the bill of exceptions filed in the District Court; and the defendant accordingly sued out a writ of error, and removed the cause here for re-examination.

Nine bills of exception are set forth in the transcript, covering forty-eight pages of the same, all of which were allowed in the District Court. Bills of exceptions are required, in order that the matters to which they relate may be made a part of the record, and that it may appear that the questions involved were raised in the subordinate court. Such a proceeding constitutes a proper foundation for a writ of error, but it does not remove the cause into the appellate court without a writ of error; and, whenever a cause is removed into this court, the requirement is that there shall be an assignment of errors, setting 'out separately and specifically each error asserted and intended to be urged,' and 'when the error alleged is to the charge of the court, the specification shall set out the part referred to totidem verbis, whether it be the instruction given or instruction refused.' Argument to show that the assignment of errors in this cause is not a compliance with that rule is unnecessary, as it is obvious that it is materially defective both in form and substance.

Three errors are set forth in a single assignment: 1. That the court erred by admitting in evidence the several matters set forth in exceptions Nos. 1 to 8. 2. That the court erred in rejecting the prayers for instruction presented by the plaintiff, Nos. 1 to 9. 3. That the court erred in the instruction given to the jury, which covered the whole case.

Assignments of error are required to be more specific and definite; but, inasmuch as the defendant has reduced the several exceptions to a summary statement, the material questions will be re-examined.

Two principal allegations were required to be proved by the plaintiff in order to maintain the action, which was assumpsit to recover the assessment made by the order of the bankrupt court: 1. That the defendant was a stockholder in the company, and that he owned fifty shares of the capital stock. 2. That the assessment had been made by the assignee, as alleged in the declaration.

During the trial, the plaintiff offered evidence to prove that the defendant was a stockholder, as follows: 1. He offered the books of the corporation, in which the name of the defendant was entered as the owner of fifty shares. 2. He offered the stock-book of the company, with a duplicate of the stock certificate issued to the defendant, showing that he was the owner of the same number of the shares of the capital stock. 3. He introduced testimony to prove that the certificate was sent to the agents of the company, to be delivered to the defendant when he paid twenty per cent of the shares; and that he made the required payment. 4. He also introduced a receipt signed by the defendant, showing that the company paid the defendant a dividend upon his stock.

Separate objection was made by the defendant to each of the offers of proof, which were admitted by the court, and the defendant excepted.

Taken as a whole, it is clear that the evidence offered was amply sufficient to warrant the jury in finding that the defendant was a stockholder, as alleged. Where the name of an individual appears on the stock-book of a corporation as a stockholder, the prima facie presumption is that he is the owner of the stock, in a case where there is nothing to rebut that presumption; and, in an action against him as a stockholder, the burden of proving that he is not a stockholder, or of rebutting that presumption, is cast upon the defendant. Hoagland v. Bell, 36 Barb. (N. Y.) 57; Plank Road v. Rice, 7 id. 162; Turnpike Road v. Van Ness, 2 Cranch, C. C. 451; Mudgett v. Horrell, 33 Cal. 25; Coffin v. Collins, 17 Me. 440; Merrill v. Walker, 24 id. 237.

Specific objection was also made to the admissibility of the act of incorporation of the company, on account of a verbal variance between the name of the company as given in the act from that set forth in the declaration; but the objection is without merit, as it presents no obstacle to a right understanding of the matter. Dodge v. Barnes, 31 Me. 290; Chadsey v. McCreery, 27 Ill. 253; Ken. Seminary v. Wallace, 15 B. Mon. (Ky.) 35.

Satisfactory proof having been exhibited that the company was duly incorporated and organized, it follows that the receipt of a dividend upon the shares standing upon the book of the company in the name of the defendant, when taken in connection with the other evidence introduced by the plaintiff, is conclusive to show that the assignment of error in that regard should be overruled. Upton v. Hansbrough, 10 N. B. R. 369; In re Bank, 12 N. Y. 17; Alder v. Bank, 13 Wis. 61; Ward v. Manuf. Co., 16 Conn. 593.

Suppose that is so, still it is insisted by the defendant that the court below erred in admitting the record of the bankrupt proceedings in the bankrupt court for the northern district of Illinois. Several objections were taken to the admissibility of that record, the principal one of which was that the copy of the record was not properly authenticated.

Proceedings in bankruptcy are deemed to be matters of record, but they are not required to be recorded at large. Instead of that, the requirement is that they shall be filed, kept, and numbered in the office of the clerk of the court, a short memorandum thereof being kept in books provided for the purpose; and the express provision of the act of Congress is that 'copies of such records, duly certified under the seal of the court, shall in all cases be prima facie evidence of the facts therein stated.' 14 Stat. 535; Rev. Stat., sect. 4992.

Records and the judicial proceedings of the courts of any State, the act of Congress provides, shall be proved or admitted in evidence in any other court within the United States, by the attestation of the clerk and the seal...