Court Opinion

ID: 7968575
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:59.412765+00
Date Added: 2024-06-11T16:34:42.818368
License: Public Domain

Mitchell, J.
This was an action or proceeding under 1878 G. S. ch. 76, § 9, against the St. Paul Ice Company, an insolvent corporation, and its stockholders, to sequestrate the corporate assets, and enforce the personal liability of the stockholders for the benefit of creditors.
Among the claims presented against the corporation was one in favor of a copartnership composed of Hardy, Seng, and Lavallee. Certain of the defendant stockholders interposed defenses to this claim, one of which was set up as an estoppel. This appeal is from an order sustaining a demurrer to this defense. Aside from the allegations that Lavallee was the secretary of the corporation, and that the partnership referred to, through Lavallee, purchased the entire assets of the corporation for $26,075, to be applied in paying the corporate debts, the substance of the defense demurred to is that, to induce the ice company to sell its assets to the firm, Lavallee stated to its board of directors that its debts did not exceed the above-mentioned sum; that the board believed his statement, and made the sale in reliance thereon; that the sale would not have been made if Lavallee had not made that representation; and that the firm is thereby estopped from collecting their claims from the stockholders.
It can hardly require more than the reading of this part of the answer to show that it sets up no defense. The facts stated hardly contain a single element of equitable estoppel. Above and beyond the reasons suggested by the learned trial judge in his memorandum, and others which might be suggested, why this part of the answer states no defense, there is one which seems to us entirely conclusive. If the answer states any representation as having been made by Lavallee to the board of directors, it was that the indebtedness of the corporation did not' exceed $26,075. This is the very most that can be spelled out of the allegations of the answer. But we have been unable to discover any allegation that this representation, if made, was not strictly true.
Order affirmed.
Gileillan, C. J., took no part.
(Opinion published 60 N. W. 810.)