New-York tribune., 1867-04-25
CIVIL COURTS.
SUPREME COURT-SPEcIAL TERM-APRm 2L-Before
Mr. Justice SUTHERLAND.


Ins Go. SgI Francis H. AnidOn and o,herA
This was an action brought by the receivers of the
Columbian Insurance Company against some $50 stock.
them in January 1866 when il alleged the Company
was already nsolvent. A part Of the defendants de-
70 s reeept the dividend must be
they could be compelled to repay IT. The Court has rem
stockholders TO repay such dividend Is entirely in
dependent of the question Of fraud,
The allegations of the complaint may he stated
briefly as follows The Columbian Insurance Company
d"E b nSr Se se receivers Ts 81 dnS aPs
appointed, and succeed other receivers duly appointed
pTory 5S nd Of the corporation On or about the
2d OF January, 1866, the said Columbian Insurance
S%{Pay az the pa to eaSh Of the socFhoep
PENDANTS here to the amount specified in the schedule
az saS dyidends the company was insoven and no
profits had earned upon its capital but such dlvi
was then greatly impaired, and shortly aferward tho
proceedings were taken under which the plaintiffs be-
came Receivers This action s brought to recover back
from the stockholders who received the dividend the
received by All the defendants dncudng those de-
creditors Of the company and such have commenced
actions against large nnbeT % recov 90 ee bH SySe%ds
received by them IA aforesaid ana threatened 10 sue III
dends. There many other creditors OF the Company
who threaten to bring similar actions against is STOCK
holders The demand for relief In the complaint includes
an Injunction againsthe six creditors from further prose-
cutting their SUITS and against other creditors IRON bring
ing suits -Four OF the defendants, who are stockholders
that IL does not state facts sufficient 10 constitute
OF action against them either Of them Tho only
question presented by the demurrer is, whether the
complaint shows a cause OF action against the ae,
murTng defendants that s whether the facts stated
in the complaint would authorize Judgment against the
demurrng defendants, TO the effect that they seyeIay
refused 10 pay back the plaintiffs, as receivers Tor the
benefit OF the creditors, the sum OF money sevea re-
ceivSd by them as % % IL 0p Oh @ heD
1t is alleged. the Company was insOven &c These de
action Gan be maintained against the stockholders to re-
back the dividend thus declared and paid that the
Int nrH nt oe All tSe are properly made
defendants IN the action but these denurg defendants
against the stockholders mainly because f understand
the points the demuing defendans does not alege
doing the capital would be impaired; morris there any al
legation that the dividend paid or received frdd,i
necessary or material to make out the statutory
| liability Of the stockholders. The Revised Statutes
provide that Z" II shall not be lawful for the di-
! Tectors of any moncyed corporation to make div
deuds, except from the surplus profits arising from
withdraw orin any manner pay to me stocIhoders OF
Of them any a G fd s SfS T sScK RST 81 nf $50
eorborStons The Revised Statutes Il Rev stat 900 q
further provide: "Whcn any shall be sustained by
any such corporation that shall exceed its undivided prof
its then realized and possessed they shall be charged
reduction of the capital stock Of the Company, aud
dividends shall thereafter DC made on the shares OF such
stock until the deficit Of capital SO created shall DO
charged as lost from the subsequently accumulated
profits of the Company" Tho General Insurance Com
pany Act OF Isi9, amended IN 1851 q Edmonds, 2lO
provides 6 2OJ as follows: "No dividends shall
under this act, when ifs capital stock is impaired. or
when the making Of such dividend will have the effect of
mparing its capital stock. and any dividend So made
shall subject each OF the stockholders receiving the tame
individual liability 10 the dtors Of said Company
noted that there Is not word Of this provision nd
eating intention TO make the liability OF the stoekhold-
ers the creditors 20 depend on the good taih with
winch the dividend may have been paid by the Company
received by the stockholders The plain words OF the
provision especially Interpreted In view OF Tie pro
visions OF the Revised Statutes referred 10, would
seem to make the liability Of the stockholders
TO the creditors To depend wholly on the determination 3
OF these questions ~ fact whether the capital stock
impaired when the dividend was pad and received
or whether tha making of The dividend did ~ lact mpa,
capital stock Tho prov sun treats the dividend paid
and received In violation of the provision as belonging
equty 20 tho creditors, aud creates ana declares te
individual liability Uf the o,khoders, entirely indopcnd
ent Of any question O knowledge fraudulent intent or
ons Of the complaint, u true. would authorize aJudg
ment against the dcnurring defendants for the
shares Of the alleged unh"ih 90 "r,faaff ai,l VI
| dend received ny them, II the pahtlifs as
As tho demuing defendants ooncede. the ydend
lie recovered back that the action should bo by the
them perhaps IL u nol necessary of mo 20 say iutthe
that after careful examination of the points am Of the
Mani wss proncry bronght and can be maintained hy
the receivers for the benefit OF all the creditors that all
the creditors who had tommonccd actions against
OF the stockholders properly made defendants for
the purpose enoInng tie further prosecution o such
actions There must be Judgment for the plaintiffs on
the demurrer, with COSTS WIN leave Tor the demuriing
defendants 10 answer Ia 70 days on pay ncn OF The costs
Dudley Field and D. D. Field for the plaintiffs L. r.
Gerry for the demurTiug defendants
CnAMBEEs-Boforc Justice BARSAED.
DECISIONS.
Edwin w. Barstow ct al. ngt Hans j. Hansen ct al
George T. Wicks ct al. agt Fabian Har;is.-Mo,ion
granted on payment Of costs 10 date
Before Justice SUTHERLAND.
George A. Osgood agt VIM Laytn ct etRl.-Judgment for
dcmurlng defendants to answer In 20 days on payment
Of the costs OF demurrer. (soe oplnonJ