Hale v. Allinson

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Court Documents

United States Supreme Court

188 U.S. 56

Hale  v.  Allinson

 Argued: November 6, 7, 1902. --- Decided: January 19, 1903

This case comes here by virtue of a writ of certiorari directed to the circuit court of appeals for the third circuit. It is a suit in equity brought by a foreign receiver, in the United States circuit court for the eastern district of Pennsylvania, to enforce the liability of stockholders, residing in Pennsylvania, of the Northwestern Guaranty Loan Company, a corporation of Minnesota.

Demurrers were filed, setting up, among other grounds, that the receiver appointed under proceedings in Minnesota had no right to sue in any court of a foreign jurisdiction; also that, even if the receiver had the right to sue, there was an adequate remedy at law for whatever rights might exist in the receiver or any other person, and that no ground of equitable jurisdiction was stated. The circuit court sustained the demurrer on the ground that the remedy, if any the complainant had, was at law. 102 Fed. 790. The judgment was affirmed by the circuit court of appeals for the third circuit. 45 C. C. A. 270, 106 Fed. 258.

The facts are these: In May, 1893, the loan company was adjudged insolvent in proceedings instituted, under the Minnesota statute, in the district court of Hennepin county, which court had jurisdiction, and the Minneapolis Trust Company was appointed a receiver of the corporate assets, and took possession thereof, and proceeded to the discharge of its duties. In November, 1893, one Arthur R. Rogers, who was the assignee of a judgment creditor of the corporation, whose execution against it had been returned wholly unsatisfied, filed a bill in equity in the Minnesota state court, in behalf of himself and all other creditors of the loan company, against that company and all its stockholders, for the purpose of enforcing the stockholders' liability to the creditors, provided for by the statutes of Minnesota. Out of about five hundred stockholders, some twenty-three only resided in the state of Minnesota and were served with process.

The creditors of the loan company, as required by the court, came in and proved their debts against the company, but none of the nonresident stockholders had been served with process in the action, and not one of them appeared therein. It was adjudged that the defendants who were named as resident stockholders of the loan company, and over whom the court had acquired jurisdiction by the service of process upon them, were liable, to the extent of the par value of their stock, for the debts of the company. The decree also found a list of the creditors who had intervened, and the amounts due to each of them from the loan company.

In addition to giving judgments against the resident stockholders of the loan company in favor of its ascertained creditors, the court also decreed as follows:

'Tenth. That for the purpose of enforcing and collecting said judgments and all thereof and any and all liability thereon or in anywise incident thereto, and any and all liability upon the part of nonresident stockholders of said Northwestern Guaranty Loan Company, against whom no personal judgment for the ascertained liability is herein rendered, and disbursing the amounts so collected as hereinafter provided, W. E. Hale, Esq., has been by the order of this court appointed receiver, and has given bond in the sum of $25,000 and qualified as such receiver. That by the terms of said order of appointment said receiver was and hereby is authorized, empowered, and directed to take any and all appropriate or necessary steps or proceedings for the purpose of collecting the judgments herein rendered, and was and hereby is authorized, empowered, and directed to take any and all necessary or appropriate steps or proceedings against the nonresident stockholders of said defendant Northwestern Guaranty Loan Company against whom on personal judgment herein has been ordered, for the enforcement and realization upon their aforesaid stockholders' liability, and to that end said receiver be and hereby is authorized, empowered, and directed to institute and prosecute all such actions or proceedings in foreign jurisdictions as may be necessary or appropriate to this end.'

The decree also provided that jurisdiction of the cause should be retained until the adjustment of the several rights and liabilities of the respective parties.

Thereupon the receiver thus appointed commenced this suit in equity to recover from the resident stockholders in Pennsylvania the full amount of the par value of the shares of stock held by them. Rogers, the assignee of the judgment creditor in the Minnesota action, was joined as complainant in this suit with the receiver, and a demurrer having been interposed on the ground, among others, of this joinder, the circuit court, upon the trial and upon the application of complainant, granted leave to dismiss the assignee as a party, and the case proceeded thereafter in the name of the receiver alone.

Messrs. M. H. Boutelle, William E. Hale, Charles C. Lister, and A. L. Pincoffs for petitioner.

Mr. John G. Johnson for respondents.

Mr. Heman W. Chaplin as amicus curiae.

Mr. Justice Peckham, after making the foregoing statement of facts, delivered the opinion of the court:


This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).