Court Opinion

ID: 7967281
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:51:45.884513+00
Date Added: 2024-06-11T16:34:33.714651
License: Public Domain

Mitchell, J.
This appeal is from an order overruling a demurrer to another “supplemental complaint” filed by the Minnesota Thresher Company in the sequestration proceeding against the corporation Seymour, Sabin & Co. The subject is to compel the stockholders to account for certain “stock” in the Northwestern Manufacturing & Car Company, which belonged to Seymour, Sabin & Co., and which is alleged to have been assigned to and distributed among them in 1882, without their paying anything therefor except their own stock in Seymour, Sabin & Co., which they surrendered, and which the officers of that corporation “pretended to cancel and retire.” The ambiguous and inconsistent allegations of the complaint leave it somewhat in doubt as to the precise legal ground upon which the pleader intended to plant himself, — whether this transfer and distribution of the “stock” was the act of the corporation Seymour, Sabin & Co., but under circumstances that made it a fraud on its creditors, or whether it was merely the unauthorized act of some of its officers outside the scope of their agency. But, in view of the allegation that these acts were “entirely without authority of any kind from Seymour, Sabin & Co., or from any meeting of the board of directors of said company, but were contrary to l'aw, and null and void, and of no effect whatever,” we must construe the complaint in the latter sense. If so, then the stock always remained the property of the corporation, the appellants having merely gotten possession of the certificates, (which are but the evidences of it,) for the recovery of which the corporation itself might have brought an action. In this view of the matter,the cause of action now sought to be enforced in behalf of creditors is one which accrued to the corporation in 1882, and, as the allegation is that the “stock” was delivered to the appellants “during the months following the 20th of May, 1882,” it *174does not appear from the face of the complaint that the cause of action was barred by the statute of limitations. There is no allegation in the complaint that the appellants have ever transferred the certificates of stock or made any use of them for their own purposes, or have ever realized a dollar on them by way of dividends or otherwise, or ever refused to return them, or that Seymour, Sabin & Co., has ever lost a dollar, or been deprived of any of its rights as a stockholder in the car company, by reason of this unauthorized transfer. It is therefore a little difficult to see how there is anything very important at stake, especially as it appears that the stock itself is now worse than valueless; but the complaint states a cause of action for at least a technical conversion of the certificates of shares, and for that reason the demurrer was properly overruled. Under our construction of the complaint, it is unimportant whether the parties by whom or in whose - behalf this complaint was filed are “prior” or “subsequent” creditors, and it is consequently unnecessary to consider whether the so-called “special preferred stock” issued by Seymour, Sabin & Co. is merely stock or constitutes a debt or obligation of the corporation, for it is only one of many' claims held by the thresher company.
Order affirmed.
Gilfillan, C. J., took no part.
(Opinion published 50 N. W. Rep. 1116.)