Court Opinion

ID: 5548421
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:23:19.492447+00
Date Added: 2024-06-11T08:34:59.368296
License: Public Domain

The Chancellor.
Upon an examination óf the evidence in this cause, I think the vice chancellor came to a correct conclusion, in dismissing the bill as against the defendants who appeared and defended the suit. The judgment recovered in the name of Wishart,in a suit commenced against the corporation more than two months after the time when it is alleged in the bill that such corporation wasduly dissolved, I think should not be considered even prima facie evidence to charge these defendants personally, as stockholders at the time of the dissolution. In Slee v. Bloom, (19 John. Rep. 456,) the debt for which the judgment was recovered was not disputed, and it was recovered previous to the time of dissolution upon which the decree of the court for the correction of errors was based. Spencer J., whose opinion prevailed in that case, fixes the time of the dissolution of the company, for the purpose of charging those who were then stockholders, on the 1st of February, 1818, when all the property of the corporation was sold under that judgment.
If we are at liberty to look behind this judgment, and see what was the situation of the parties in November, 1828, when the bill alleges that these defendants became liable as stockholders, on the dissolution of the corporation, which then took place, it is evident the complainants have not shown a case that entitled them to recover. The allegation in the bill, that the sealed note was given for a debt due to the complainants from the company, is wholly contradicted by the proof. On the contrary, it appears that Cazeaux, the vice president, made this note, payable to his own clerk, not for a debt due from the company to the complainants but for his own private debt to them ; under the pretence that the company owed him a much larger debt. *580If the complainants had proved that a debt to that extent was then actually due to him, perhaps his general authority to sign notes or bills for the corporate debts, might have authorized him to transfer a debt admitted to be due to himself, by giving a note therefor to a third person to whom he was indebted. But the giving such a note is not evidence that any thing was due from the company to himself, so as to authorize such a transfer. And as the agent of the complainants took the note for the mere purpose of getting a claim against the company, tó charge its stock holders, the onus of showing that the debt was actually due, was upon the complainants.
The corporation being insolvent at the time, the complainants could not in any event be in a better situation, as against the stockholders, than Cazeaux himself would have been if the note had not been made and he had himself filed a bill against the other stockholders, to compel contribution. In that case, it is very evident that Cazeaux would have been required to show that he had a debt against the company which was more than the amount of his contributory share, with the solvent stockholders, of all the debts due by the corporation, including his own ; and after all equitable claims and offsets against him had been allowed. Here the complainants have not been able to satisfy me that this debt was due from the company to Cazeaux ; much less that the company was indebted to them in the sum of 15,000, for which the note was given. As the note was given to Cazeaux’s clerk, and not directly to them, the allegation in the bill, that the corporation owed them the amount for which the note was taken in the name of the clerk for their benefit, is a material averment, which must be proved as laid, to enable them to succeed. And 1 am inclined to think that avermentwould not have been supported, even if they had proved that the note was given for a debt justly due from the company to Cazeax; as it was not originally given for their benefit.
For these reasons, the decree must be affirmed, with costs as to the defendants who appeared and answered, and who appeared by their counsel on the hearing of this appeal. I *581presume it was not the intention of the vice chancellor to direct the bill to be dismissed, as against Cazeaux and the other defendants against whom the bill had been taken as confessed. But if the complainants’ counsel supposes that such is the effect of the decree appealed from, he may-have it reversed as to those defendants. And may also apply to the vice chancellor for such decree as the complainants are entitled to against them, or any of them; after obtaining a master’s report of the truth of the facts alleged in his bill against such of them as were proceeded against as absentees. The proceedings are to be remitted to the vice chancellor.