Court Opinion

ID: 6990696
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:24:25.813327+00
Date Added: 2024-06-11T16:09:36.360956
License: Public Domain

Garnett, P. J. The decree in this case seems to be satisfactory to the creditors of the Dorsett Pipe and Paving Company; no creditor is complaining thereof; but the appealing co-stockholders of Waterman deny the propriety of exempting his estate from $>ro rata assessment on his subscription as trustee for 637 shares of stock. The practical effect of the decree is to compel the other stockholders to assume the liability of Waterman’s estate on the 637 shares. The ruling of the Circuit Court does not transgress the rule of public policy which prohibits arrangements between stockholders by which some or all of them may evade responsibility to the creditors of the corporation. There is no rule of law or public policy which hinders any agreement, operative between the stockholders only, for an apportionment of their several stock liabilities. The interests of the creditors are not in any way affected by such agreements, nor is the corporation itself thereby barred of recovering from each subscriber the full face of the stock for which he agreed to pay. This is simply and solely a question between stockholders. At the hearing of the ease in the court below, evidence was given tending to show that when all the shares but 637 had been taken and the names of the subscribers written on the subscription list opposite the several amounts thus taken, a question arose as to the remaining 637 shares. There being no person who wanted those shares, a suggestion was made that Waterman should subscribe therefor as trustee for the other stockholders; he inquired about the. liability, was answered that so far as the stockholders were concerned, there would be no liability on his part, and thereupon he wrote his name as it appears in the subscription list, with the word “ trustee ” following and the figures 637 opposite. All this happened when the appellants and all other stockholders were present, and we do not perceive why that agreement of the stockholders should not now be enforced. Counsel for appellants has vigorously combated certain of the facts stated above, but making all due allowance for the admissible evidence given for appellants, we find therein nothing inconsistent with the foregoing statement. Should there be a failure to collect on the stock, other than the 637 shares, sufficient money to pay the debts and costs, we must ¡presume that proper measures would be adopted by the court to provide for the same by assessment on those shares. Ho> fault can he found with the order of the court reserving the right to make further assessments and new adjustments between the several stockholders. Whether any stockholder has or has not enough property to satisfy his portion of the debts and liabilities, has not been demonstrated. The ordinary method of testing that question is by the issue of execution and placing the same in the hands of the sheriff for collection. Why the court should not adopt the ordinary means for settling this question, is not apparent. We think the reservation fully authorized by Sec. 25, Chap. 32, R. S. The decree is affirmed. jDecree affirmed.