Court Opinion

ID: 7278586
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:03:15.612327+00
Date Added: 2024-06-11T16:18:58.016868
License: Public Domain

Mr. Justice Robb
delivered the opinion of the Court:
A motion has been made to dismiss the appeal upon the ground that it was not expressly authorized by the court. As pointed out by counsel for appellants, this motion was not made until more than three months after the printing of the record, and until after appellees had obtained ah extension of time to file their briefs upon the merits. We agree with appellants that the allowance of this appeal by the learned trial justice and the approval of the appeal bond “is equivalent to leave by the court to the receiver to take an appeal.” Farlow v. Kelley, 131 U. S. appx. cci, and 26 L. ed. 427. The motion is overruled.
Since no local statute is applicable, as in Thomas v. Matthiessen, 232 U. S. 221, 58 L. ed. 577, 34 Sup. Ct. Rep. 312, the law of Delaware,' by which this corporation was created, governs in measuring and enforcing the liability of a stockholder. Converse v. Hamilton, 224 U. S. 243, 56 L. ed. 749, 32 Sup. Ct. Rep. 415, Ann. Cas. 1913D, 1292; Royal Arcanum v. Green, 237 U. S. 531, 59 L. ed. 1089, L.R.A. 1916A, 771, 35 Sup. Ct. Rep. 724. Section 20 of the general incorporation law of that state declares that “when the whole capital stock of a corporation shall not have been paid in, and the assets shall be insufficient to satisfy the claim of its creditors, each stockholder shall be bound to pay on each share held by him the sum necessary to complete the amount of the par value of such share as fixed by the charter of the company or its certificate of incorporation, or such proportion of that sum as shall be required to satisfy the debts of the company.” [Del. Rev. Code 1915, § 1934.] It is further provided that this sum or proportion may be recovered as provided for in sec. 49 of the same act, “after a writ of execution against the corporation has been returned unsatisfied as provided for in section 51 of this act.” Section 51- ordains that no suit shall be brought against any director or stockholder for any debt of a corporation of which he is such director or stockholder, “until judgment be obtained therefor against such corporation and execution thereon re*341turned, not satisfied.” Paragraph 7 of section 2 of the act defining the powers of a corporation provides that it may dissolve itself or be wound up and dissolved “in the manner hereinafter mentioned.” Section 43 provides for the appointment of trustees or receivers when any corporation shall be dissolved “in any manner whatever.” Section 44 gives the court of chancery jurisdiction of such proceedings, and section 45 provides that said trustees or receivers, after payment of all allowances, expenses, and costs and the satisfaction of all special and general liens upon the funds of the corporation, “shall pay the other debts due from the corporation, if the funds in their hands shall be sufficient therefor, and, if not, they shall distribute the same ratably among all the creditors who shall prove their debts in the manner that shall be directed by an order or decree of the court for that purpose.” Section 53 requires all creditors to make proof under oath of their respective claims against the corporation within a time specified.
In Butler v. New Keystone Copper Co. — Del. —, 93 Atl. 380 (Feb. 2, 1915), it was ruled that “a distribution of all the assets (of the corporation) would clearly be a winding up which could be done legally only in the method provided by law.” There is one jurisdiction only, that wherein this corporation was created, where a decree binding all the stockholders may be entered “against the corporation in a suit brought against it under the State law for the purpose of ascertaining its insolvency, compelling its liquidation, collecting sums due by stockholders for subscriptions to stock, and paying the debts of the corporation.” Royal - Arcanum v. Green, 237 U. S. 531, 544, 59 L. ed. 1089, 1101, L.R.A. 1916A, 771, 35 Sup, Ct. Rep. 724. In that jurisdiction, by subscribing to stock, they conferred on the corporation authority to represent them, whether they be residents or nonresidents, and such representation binds them. • In Selig v. Hamilton, 234 U. S. 652, 58 L. ed. 1518, 34 Sup. Ct. Rep. 926, an action was brought in New York to enforce the liability of a stockholder of an insolvent Minnesota corporation, an assessment having been made against him in *342Minnesota. • It was ruled that, the order levying the assessment being conclusive as to all matters relating to the amount and propriety thereof and the necessity therefor, the stockholder is limited in his defenses to showing that he is not a stockholder, or is not the holder of as many shares as alleged, or has a claim agaist the corporation which in law or in equity he is entitled to set off against the assessment, or has any other defenses personal to himself. In the course of its opinion the court said: “The marshaling of the amounts recovered from stockholders is also the appropriate subject for the consideration of the court which under the statute collects and distributes the fund. It is quite obvious that another court, in an action by the receiver against the' stockholder, could not undertake to fix the amount required to pay the debts for which the stockholder is liable, unless it virtually assumed the duty imposed by the statute of determining what a ratable assessment should be, and thus denied due credit to the determination already made in a court of competent jurisdiction.”
We are of the opinion that this is, in, substance and effect, an attempt to wind up a Delaware corporation in the District of Columbia, and as this may be done only in Delaware, where all the stockholders may be brought in and the ratable assessment of each determined, the decree must be affirmed, with costs;

Affirmed.