The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-03-23
p

APPELLEE'S REPLY.
Brief In the Iron Hall Case In Answer to
Judge How~'s on Action OF ths Court
Harris, Hawkins 81 Smith, of counsel
for the plaintiffs in the Iron Hail receiver
ship case. yesterday filed a brief with the
Clerk of The Supreme Court in answer to
the appellants brief recently filed. Speak
ing of the first assignment of error by the
appellants, that the complaint does not
state facts sufficient to constitute an &C.
tion. the appellees answer nat the CON-
plant was not verified. and was
therefore not used in evidence.
They argue that the evidence
in this case is not In the record and the
complaint is not verified. therefore the
question of Its sufficiency cannot be raised
upon this appeal. Speaking OF the appel
lants challenge of jurisdiction or the
special term in appointing @ receiver. the
appellees argue that this assignment OF
error raises no question except the one of
insufficiency of the complaint. which was
just before argued. They argue further
the questions of jurisdiction and sufficiency
are not before the court, and. under the
authorities cited, they cannot be raised
The appeIiees then continue as follows:
IL We are right i'm our position that the suffi-
cheney OF the complaint cannot bs raised upon
this appeal 1t disposes OF all the arguments ad-
vanced and authorities cited by appellants as to
the sufficiency of this complaint and as to the
Jurisdiction or the court. and it would appear
unnecessary for us to discuss the points raised
by appellant as TO this branch OF the case. But
as We do not wish 10 be understood as c0ncedinR
IN any way that the complaint Is insufficient. or
that the court was without Jurisdiction to make
the order appointing a receiver, IL may be we'll
for US to notice briefly the points made and au-
thorities cited by appellants brief upon these
The first point is that the facts stated in the
COMPLAINT as stated, are mot not sufficient nfiacisnnsn
OF insolvency Is made upon information and be-
lief. and that the other facts alleged are in
An examination OF the complaint will show that
the allegation is that the appellant Is In fact in
solvent, and we submit that this allegation
alone Is sufficient and would Withstand q de-
murrer, and that Is all that Is necessary To make
it good. But IL this were not so, the other facts
alleged fully sustain the general charge of In
solvency.
The assets of the appellant are set forth In q
general way. That the reserve fund on hand in
the possession OF the several branches amounted
to about 81 zoo, 900, only one-seventh OF which
was available each year 10 the payment Of
maturing Indebtedness. Thas the real estate
and other assets amounted To about 81 900. 900,
which consisted largely OF cash, more than one
half of which was deposited In "a bank outside Of
the state OF Indiana, of which the Eupreme
justice. somerby. was vice president, and J.
Henry Hayes. one of the supreme trustees. was
cashier Ct, p. %, and that this bank had been
ouA1 W thC VI PCAAo
under their control.
That its capital was limited and had been
fraudulently withdrawn. That it had been
seized by the officers of the state of P~ennsyl-
yania because OF Its financial situation. That
for the purpose of preventing the final winding
mp OF the bank $4,000 OF the funds OF appel
liant had been taken by It's officers, Semerby aud
others. and placed in said bank under the false
representations to the officers and court of
Pennsylvania; that the same was a contribution
OF stockholders 10 its capital.
That said officers of the bank now claim that
Hha hnnE una mt 1inhla IN malta fnR aath
sum. That other sums had been deposited in
said bank until over $70O, 900 of the cash OF APP
pellant was deposited in said bank, and that the
bank was insolvent aud that said sum would be
lost To appellant. IT, p. 9 and 10Y: So that over
600 of the 81. 100000 of available assets Of
the company. as shown by the com plant, was
lost and not available TO meet its maturing obli-
cations, which for the last six months of 1892
were over $l,325, 900 IT,. p. D. L. 32), for 1893
81. o IT., p. 5, l.. 80
We submit that these allegations are amply
sufficient TO show insolvency.. and that taken with
show ample reason and cause for the appoint
ment of a receiver. But il ia urged that, as the
corporation had the power of assessment. it had
a right TO make assessments upon the members
from time to time, and that 1t could not become
tnsolyent. This right TO make assessments Is not
an asset and cannot be enforced.
The appellees then say:
All the available property appellant had to
meet its large obligations was the 81 ,0O0, 900,
over 100000 OF which was in an insolvent
bank managed by the officers OF the appellant,
t&A's sAO ANaN " ~ AAthA lhO III
annually One-seventh or the reserve fund In the
hands or their officers. And the only security
counting for this reserve fund was bonds. IN
many OF the cases with the insolvent bank as Sc
curity.
The brief here proceeds to argue the two
cases cited by the appellant as to the right
TO appoint q receiver. Discussing the sub
iect further. the appellees say:
The next proposition advanced by appellant is
that the appellees, being members Of the cor
p~oration. could not bring a suit OF any kind,
either for injunction or receiver. until they had
mado a bona fde effort 10 get redress according
10 the mode provided by rules and regulations OF
appellant. and in support OF this contention a
number OF authorities are cited, and Dunphy VS..
Traveller. etc, ASS, I46 Mass, 495, Is quoted
from at length in appellants brief and referred
20 IN several different ways; but the case is not In
point. as IL Is in no way similar TO the one at bar.
III VIII be seen upon examination that 1t was
not an action for a receiver nor were there any
allegauons OF insolvency or danger 70 the assets,
but II was a proceeding by certain stockholders
against the company and certain officers 10 COM
pei the ofiicers 10 account for money it was al
legged they had received and to show how It had
been distributed, and asking that certain moneys
be distributed among certain stockholders to
eQualize them in dividends. etc. Ana the court
I'm the language quoted in the brief disposes of
the case. holding, rightfnlly probably, that the
ton, If ar all. and that stockholders could not 90
into court and settle their differences as TO the
best policy OF conducting the business OF the cor
loratiOn. But no such condition OF affairs Is dis
closed by the complaint In this case.
Discussing the gun of the appel
Snts that the compliments must have an
Existing interest in the property. and that
J. he has disposed of it or parted
kith 1t, they cannot DO heard
10 apply for n receiver. the appellees an
over that the record does not present any
such state of facts. The appellees say they
have not parted with or disposed of their
interest. In reference TO appellants oh
yction TO the amendment of the complaint
10 make il conform to proof, the appellees
Day:
As we understand appellants rgument Ii is
not contended that the court OF Judge did not