The Minneapolis journal., 1903-03-09
MUCH IS At STAKE
Finney VS.. Guy Case Before U. s.
Supreme Court Interests Min
nesota Creditors.
Guaranty Loan and Farmers &
Merchants State Bank Points
Are Involved.

Within few weeks the United States
supreme court will hand down a decision
involving the stockholders liability act
of Minnesota, and far reaching in it's eff
feet in Minnesota and in states having
similar statutes. The case is that of
FinnerX VS.. Guy, which was argued last
week by Fred w. Reed of Minneapolis.
Points were made involving the right of
the creditors Of defunct Minnesota cor
poration to sue stockholders of that cor
poration who reside in another state.
Another phase of the law was decided
some time ago in the case of Hale VS.. AL
lison Hale being the receiver of the
Guaranty Loan company of Minneapolis
of claims against nonresident stockhold-
ers. The decision was adverse to Hale
The case of Finnery against Guy relates
to the winding up of the affairs Of the
Farmers and Merchants State bank.
Should the decision of the court in that
case follow. the one in the Hale case, it
can readily be seen that it will affect
be owned outside the state, making it
practically impossible to collect claims
against nonresident stockholders.
. AS explained by Mr.. Reed, the case
of Hale VS. Allison was a suit brought
in the United States district court of
Pennsylvania by w. E. Hale to enforce
the Minnesota Stockholders liability law.
Mr.. Hale was the receiver appointed by
the court to enforce the liability Of stock
holders within and without the state of
Minnesota. In bringing the action he
joined as defendants all the stockholders
residing in the state Of Pennsylvania,
few less than fifty in number The de-
cision Of the district court being; adverse.
1T was carried to the circuit court Of apl
III y~1z lS,14
Thereupon it was carried to the United
States supreme court, and by the decision
handed down recently the receiver was
finally defeated in the recovery. The
grounds of the decision Of the supreme
court were that a receiver appointed by
a court of the state of Minnesota has no
authority to maintain an action against
stockholders in foreign jurisdiction, and
that if any such action was to be MAIN
tanned it must be an action at law against
a single stockholder, instead Of an action
in equity against all residing in the juris-
diction. .. e.-.. '.. 4..
....', Result Of Decision - .. :
The result of the decision of the supreme
court of the United States was great
surprise to the receiver and the bench and
bar of Minnesota, it having already beer
decided in cases before brought by Mr.
Hale in the United States circuit court
and once by the circuit court of appeals ir
the case CT Hale VS.. .Hardon. that Hale
as such receiver, could maintain the ac.
tions. The decision in Hale VS.. Allison
practically destroys the remedy because il
is impossible to commence an action with
several hundred creditors all as parties
and the only remedy left the receiver, i
any, is the doubtful one of bringing an &C
tion by one or more creditors on behalf o
all. It refuses any standing whatever t,
a receiver appointed by the Minnesots
court to enforce the stockholders liabilit,
under the Minnesota law in any foreign
jurisdiction. ~ ~ ~,
........- :.,. Finney VS.. Guy
The case of F:nney VS.. Guy was brough
in the circuit court Of Wisconsin by all tn
creditors of the defunct Farmers and Mer
| chants State bank, to enforce the liabilit
Of the defendant Guy as the holder O
stock in the bank, she being resident o
the state of Wisconsin. This case i
exactly the opposite of Hale VS.. Allison il
this: Hale VS.. Allison was brought by tn
receiver and against all of the defendant
| in the jurisdiction. Finney against Gu
| was brought by all the creditors as plain
tiffs against single defendant. The Wis
| consin supreme court decided the cas-
! squarely on it's merits and not on techni
cal grounds, as in the case Of Hale VS.. Al
lison, but held fairly and squarely that tn
stockholders liability under the Minnesot
law could not be enforced in any foreig
jurisdiction; that the proceedings taken /
| the Minnesota court were the final and ex
elusive remedy and that no stockholde
not brought into that original action coul
ever be subjected to liability thereafter
The Wisconsin court admitted that it
4 decision was contrary to the ruling Of tn
I Minnesota court and that the Minnesot
court had decided that the nature of tn
liability was such that it could be enforce
| in other jurisdictions and that the pro
ceedings taken in the court OF Minnesot
were not a final or exclusive remedy. Bu
the Wisconsin court held that the Mime
sofa court was wrong in the interpretatio
CT the Minnesota law. and that there wa
no remedy whatever against foreig
| stockholder.
!, If the supreme court of the Unite
Estates sustains the supreme court of wis
consin that Is a final and conclusive endin
on the merits of all the Guaranty Loa
cases, and in fact Of all the other case
pending ct. that may be brought by whic
+ any attempt is made to enforce the liabi
ity under the Minnesota law against an
stockholder not residing in the state
4 Minnesota.
Sues for a Spill.
{. DR.. Eugene A. Hutchins has brougl