Case ID: abbn-cas_4/html/0040-01.html
Source: Caselaw Access Project
Author: {"author": "J. F. Daly, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HETZEL v. THE TANNEHILL SILVER MINING CO.
    
      N. Y. Common Pleas; Special Term,
    
    
      September, 1877.
    Corporation.—Action against, by Creditor.—Service of Summons on a Dissolved Corporation.—Receiver.—Stockholders.
    After judgment dissolving a corporation and appointing a receiver, an action cannot be commenced against it by service of process on an officer.
      If it be impossible for a creditor of a corporation to obtain a judgment against it, owing to its dissolution, as a preliminary to enforce the liability of the stockholders, his remedy is an action against the latter, without the preliminary judgment, either directly or through its receiver.
    Motion to vacate service of summons.
    Selden Hetzel, commenced an action against the Tannehill Silver Mining Company for $1,134.28, the unpaid balance on a judgment obtained in Nevada. The present action was commenced by serving the summons and complaint on Joseph H. Colton on July 2, 1877, in the city of New York. Just before defendant’s time to answer expired, a motion was made to vacate the said service, on the ground that Colton was not president, secretary, cashier, treasurer, manager’s agent or director of the said corporation at the time. Defendant’s affidavits, on which the motion was made, alleged that in February, 1876, an action was commenced against the defendant herein, in the supreme court, by a creditor thereof, to dissolve the corporation, and for the appointment of a receiver, and that on June 19, 1876, by a judgment and decree of the said court, the said corporation was dissolved and a receiver thereof appointed. That from that time Joseph H. Colton ceased to be the president or any other officer of said company, nor had he since that time had any connection whatever therewith.
    The decree of dissolution was not produced nor was any copy annexed to the moving affidavits.
    
      A. W. Gleason, for motion.
    
      Oscar Smedberg, opposed.
    
      
       Compare Whritner v. Universal Life Ins. Co., ante, 23; and see also Willitts v. Waite, 25 N. Y. 577; Habich v. Folger, 20 Wall. 1; Security Bank of N. Y. v. Nat. Bank of the Commonwealth, 2 Hun, 287.
    
   J. F. Daly, J.

The affidavits show that the corporation was dissolved before this action was commenced ; whether it were dissolved or not I cannot say unless the record is produced. The mere appointment of the receiver would not work a dissolution (Kincaid v. Dwinelle, 59 N. Y. 548). As the plaintiff does not deny the fact of dissolution sworn to by the late president of the corporation, Mr. Colton, I assume the fact- to be that it was dissolved before the summons and complaint herein were served on Mr. Colton. Such service was irregular. A dissolved corporation has no president or other officer on whom a summons can be served to bring the corporation into court for the purpose of enforcing judgment against it.

But this works no hardship to a creditor who wishes to enforce the liability of the stockholders and as a preliminary thereto desires to obtain judgment against the corporation. If it be impossible to perform the condition required by statute and obtain such judgment, he may doubtless maintain his action against the stockholders without it (Kincaid v. Dwinelle, 59 N. Y. 548, 551; Shellington v. Howland, 53 N. Y. 371, and cases cited in the opinion).

The creditor has, besides, the remedy through the receiver, who may maintain the action against the stockholders for the benefit of the creditors and therefore for the benefit of the corporation (Calkins v. Atkinson, 2 Lans. 12).

Motion granted. No costs.