Court Opinion

ID: 8006808
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:54:04.932883+00
Date Added: 2024-06-11T16:35:54.952796
License: Public Domain

Henry, J.
This is not a suit to set aside the contract made between the St. Louis Mutual and the Mound City, but to recover from Hart the amount' paid to him by the latter for the shares of stock in the Mound City, which he had received in exchange for an equal amount of stock of the St. Louis Mutual. The agreement between the companies was, that the stockholder^ of the St. Louis Mutual, on demand, should receive an amount of the stock of the Mound City, equal to-that held by them respectively in the St. Louis Mutual, and that within a given period, on demand, the Mound City would pay them in cash the par value of the stock of the latter. Of this stipulation Hart availed himself, and this suit is to recover from him the amount so received by him. In consideration of the foregoing, and other stipulations, among them the agreement of the Mound City to pay all the liabilities of the St. Louis Mutual, all the assets of the latter company were sold and delivered to the Mound City.
Hart’s stock in the St. Louis Mutual was not assets, but a liability of that company, and its other creditors had •no claim whatever against a stockholder who had paid for *646his stock, in the event of a deficiency of assets to pay the debts of the company. The Mound City not only assumed the liabilities of the St. Louis Mutual to its other creditors, but also its obligations to its stockholders. Conceding, and in this proceeding we are to assume, that the agreement between the two companies was a valid contract, what possible right has the receiver of the St. Louis Mutual to recover this money from Hart? He had ceased to be a stockholder in that company, and under and by virtue of the agreement, had become a stockholder in the Mound City, and there is no privity between him and the company or creditors represented by this plaintiff'. Whether his stock in the Mound City was paid for out of the identical assets received by the Mound City from the St. Louis Mutual, or out of assets pi’eviously owned by the former, can make no difference, since by a valid contract the money and all other assets of the St. Louis Mutual became the property of the Mound City, and any unwarranted disposition of its assets is a matter of no concern to any one but the creditors and stockholders of the Mound City. Whatever may be the liability of ihe defendant to the creditors of the Mound City, and this includes all the creditors of the St. Louis Mutual, we are satisfied that he is not liable to the receiver of the latter company.- Until that contract shall have been attacked, and set aside for fraud or other infirmity, the Mound City must be regarded as the .legal owner of all the assets of the St. Louis Mutual, liable, under the contract, for all the debts of the latter. By that contract its assets are equally bound for the payment of the liabilities of both companies, and any payment by the Mound City to its stockholders, for stock owned by them, if there be a deficiency of assets to meet its liabilities to its creditors, would constitute a cause of action against such stockholder, on which the receiver of the Mound City, and not the receiver of the St. Louis Mutual, is the proper party to sue. The opinion delivered by the court of appeals is so lucid, and able an exposition of the views we *647entertain on the subject therein discussed, that we are not inclined to protract this discussion. The judgment is affirmed.
All concur, except Sherwood, C. J., who dissents.