Vanderwerken v. Glenn

• Decision Date: 31 December 1888
• Citation: 6 S.E. 806,85 Va. 9
• Court: Virginia Supreme Court
• Parties: Vanderwerken v. Glenn.

6 S.E. 806

(85 Va. 9)

Vanderwerken

v.Glenn.

Supreme Court of Appeals of Virginia.

December 31, 1888.

1. Corporations—Proceedings to Compel Payment of Subscriptions—Parties.

A corporation made an assignment to a trustee, including therein unpaid subscriptions, and provided that future assessments should be payable directly to the trustee. A decree to which the stockholders were not individually parties made an assessment on said stockholders, and directed the trustee to take such steps to collect the same as he might be advised. Held, that the trustee might sue therefor in his own name; said decree being valid and binding on the stockholders, who were sufficiently represented by the corporation being a defendant to the suit in which said decree was rendered.

2. Same—Members and Stockholders—Change of Corporate Name.

In such case it appeared that defendant had agreed to subscribe for 50 shares of the stock of the company, under the name it then bore; that by his proxy he participated in the organization of the company; and that, on motion of such proxy, the corporate name was changed to that borne at the time of the assessment. Defendant's name also appeared on the company's books as holder of 50 shares of stock. Held sufficient evidence of his being a stockholder of the present company.

3. Same—Unpaid Stock—Assessment—Limitation of Action for.

Where the officers of a corporation which has made an assignment of all its property, including the unpaid portion of its capital stock, neglect to levy an assessment on such unpaid stock, and the levy is made by the court in a proceeding instituted by the trustee, the statute of limitations begins to run from the date of the assessment by the court.¹

i. Same—Unpaid Stock—Action to Collect Assessment—Evidence.

In an action to collect an assessment on unpaid stock, the books of a corporation being identified as such by its superintendent and trustee in an assignment, and they having previously been proved before a commissioner in a chancery suit to which the corporation was a party; and it being shown that the books now offered were the same used by the commissioner, upon which his report had been made, which report was confirmed, in the absence of any circumstances tending to discredit the books they should be admitted as evidence.¹

Lacy, J., dissenting.

Error to circuit court of city of Alexandria; James Keith, Judge.

Assumpsit to collect assessment upon unpaid stock of the National Express & Transportation Company, brought by John Glenn, trustee, under an assignment made by said company for the benefit of creditors, against Gilbert Vanderwerken, who held 50 shares of stock in said company. Verdict for $1, 500, and judgment thereon, from which defendant appealed.

T. L. Smith and Christian & Christian, for plaintiff in error.

John Howard and Chas. Marshall, for defendant in error.

Hinton, J. This is an action of assumpsit instituted in the circuit court of Alexandria county, in April, 1885, by John Glenn, as trustee, against Gilbert Vanderwerken, which was afterwards, by consent of parties, removed to the circuit court of the city of Alexandria. Its object is to recover of the defendant the sum of $1,500; that being 30 per cent, upon the subscription by him for 50 shares of the stock of the National Express & Transportation Com-pany, a corporation chartered and organized under the laws of Virginia. To the declaration there was a demurrer, which was overruled; whereupon the defendant pleaded the general issue and 15 special pleas. To these pleas, however, no further allusion need be made, as the only questions raised upon this record of sufficient importance to be noticed naturally resolve themselves, in our judgment, into four, and they may be briefly stated as we come to discuss them.

The first of these arises upon the demurrer, and presents for decision the question whether John Glenn, trustee, can maintain this action in his own name; and the solution of this question does not, in our judgment, depend, as it seems to be erroneously supposed to depend, upon the construction to be given to section 17, c. 141, Code 1873, but upon considerations of an entirely different character. As the record shows, the National Express & Transportation Company, soon after its organization, became involved in debt, and determined to suspend its operations, and accordingly, on the 20th of September, 1866, the president of the company, acting under and in pursuance of an order and resolution of the board of directors, executed a deed of trust to three trustees for the benefit of the creditors of the company. In this deed the unpaid subscriptions of stock were expressly assigned, along with the other property and choses in action of the company, as a part of the trust fund with which to pay the debts; but there was no assignment of the power vested in the president and directors, by law, to determine upon and make calls for the unpaid balance of subscriptions, and that power, as a consequence, remained with the directors. In this state of the case, upon the failure of the president and directors to make the proper assessments to enable the trustees to fulfill the objects of the trust, it was the peculiar province of a court of chancery, upon the application of any creditor interested in the application of the trust, to administer the remedy. This was done by the court in this instance, when, by its decree of December 14, 1880, it decreed the assessment of 30 per cent, of the unpaid stock, to be paid to the trustee, who, by the same decree, was substituted in the room and stead of the surviving trustees under the before-mentioned deed of September 20, 1866, and directed him to take such steps as he might be advised to collect said assessment. And this was in accordance with numerous precedents, a few of which only need be cited: Salmon v. Ham-borough Co., 1 Cas. Ch. 204; Hall v. Insurance Co., 5 Gill, 484; Sanger v. Upton, 91 U. S. 56; Scovill v. Thayer, 105 U. S. 155; Glenn v. Williams, 60 Md. 93. To this suit the stockholders, in their individual capacities, were not necessary or proper parties, and they were therefore not made parties, but were left to be represented by the company. And for this, also, the precedents are numerous. In Salmon v. Hamborough Co., supra, the demurrer of the stockholders was placed upon the ground that they ought not to have been made parties; and, upon appeal to the house of lords from the decree of the lord chancellor, the demurrer was sustained, —thus showing that at that early day creditors might get relief against the company without making the stockholders parties. In Hall v. Insurance Co., 5 Gill, 484, which was a case like the one with which we are dealing, namely, an action at law to recover of a stockholder an assessment upon an unpaid subscription to capital stock, by the order and direction of a court of equity, in a proceeding to which the stockholders were not parties, the objection that the stockholder was not a party was made; but the lower court overruled the objection, and upon appeal that ruling was sustained. In Ogilvie v. Insurance Co., 22 How. 387, although the stockholders were made parties personally, it will be observed, from a quotation that I shall make, that the stockholders were regarded as concluded as to all averments respecting the corporation and its property by the decree pro confesso against the corporation. Say the court, in speaking of that decree: "The bill was taken pro confesso as against the corporation. The other defendants, being corporators, are consequently con-cluded as to the averments of the bill affecting them. As stockholders who have not paid in the whole amount of the stock subscribed and owned by them, they stand in the relation of debtors to the corporation for the several amounts due by them; and as to them this bill is in the nature of a demand,...