Court Opinion

ID: 6995435
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:32:24.024709+00
Date Added: 2024-06-11T16:09:45.515915
License: Public Domain

Mr. Justice Gary delivered the opihioh of the Court. The appellant filed the bill in this case as a simple contract creditor against the Columbian Company and its stockholders, under Sec. 25, Ch. 32, Corporations, to obtain payment, and asked in the prayer of the bill that the business of the corporation be closed up, and the corporation dissolved. It is now objected on behalf of the Columbian Company that this prayer takes the appeal out of the jurisdiction of this court, because it involves a franchise. But the bill having been dismissed below upon demurrer, the question now is, not whether the appellant is entitled to all that the bill asks, but whether it is entitled, if the bill be true, to any relief. As said in the Supreme Court in Chicago Steel Works v. Illinois Steel Company, opinion filed October 29, 1894: “ But the power to dissolve the corporation is only a portion of the relief provided for by section 25. Two remedies are therein given. One is to apply the assets in payment of the debts, and in case of their insufficiency for that purpose, to enforce hgainst the stockholders their liability for unpaid stock. The other is in cases where a cause for forfeiture exists, to declare such forfeiture, and decree a dissolution of the corporation. The court may grant relief by the first remedy without resorting to the second. It may find it unnecessary to decree a dissolution.” And upon that ground the court held that a writ of error from that court to review an order of the Circuit Court appointing a receiver, must be dismissed; declining to decide the case upon the question of the interlocutory character of the order. The objection to our jurisdiction is not well taken. The grounds, applying to all the appellees, upon which the demurrers of the several appellees were sustained and the bill dismissed are, first, that the appellant had not exhausted its remedy at law by judgment and execution against the Columbian Company; and second, that the bill shows a former bill pending against the Columbian Company, under which a receiver had been appointed, who was in possession of all the tangible assets. The judgment of the Supreme Court in Butler Paper Co. v. Robbins, 38 N. E. Rep. 153, and the unanswerable argument of a late judge of this court whose name is now upon the brief of part of the appellees, in Wolverton v. Taylor Co., 43 Ill. App. 424, which, though made upon Sec. 16 of the same act, is equally applicable to Sec. 25, dispose of the first ground. A simple contract creditor may proceed under Sec. 25. The bill under which a receiver was in possession was filed by the principal promoter of the Columbian Company, and while it was ostensibly on behalf of himself and other creditors there was to it no other defendant than the Columbian Company. It was not filed under Sec. 25. What the object of the bill, or the motive for filing it was, can only be conjectured. It seems very like that of Graff as narrated in Weigley v. People, 51 Ill. App. 51, the judgment of this court in which case has been once approved by the Supreme Court, but, as we are informed, is now depending upon a rehearing. But whatever the merits, the receiver under it, having the assets of the Columbian Company in his possession, is an indispensable party (Curran v. Bradner, 27 Ill. App. 582), and ought to have been made, and was not made, a defendant to the present bill; yet the want of parties must be specially assigned on demurrer. Mitf. Eq. Pl., 271; Dan. Chy., 289; Story, Eq. Pl., 543. As to objections to the bill, special to several of the appellees, it is quite apparent that they have never received the attention of the Circuit Court. The bill may or may not be defective in averments as to some of the appellees. The decree dismissing the bill as to all the appellees is wrong, and if it ought to be dismissed as to some of the appellees for. reasons which this opinion does not touch upon, the Circuit Court may winnow out those appellees from the multitude with whom they are intermingled. At any rate, if the case goes to a final decree against any stockholders, the presence of the holders of all stock in any capacity or character is necessary in determining the pro ■rata of those who may be liable. The statute is that the suit shall be against all “ who were stockholders; ” and as part of the decree may be a dissolution of the corporation, the general rule of equity requires that all who have a legal or equitable interest in it, should be before the court; else they would not be concluded by the decree. Great Western Telegraph Co. v. Gray, 122 Ill. 631, citing cases in 77 and 102 Ill. The decree is reversed and the cause remanded for such further proceedings as to equity may appertain.