equal to the premiums so paid. with interest thereon. The injunction may be vacated, except as to a sum equal to an a.mount of the premiums paid, and interest thereon.
CLEVELAND ROLLING-MILL Co. V. TEXAS & ST. L. Ry. Co. and others.·
(Oircuit Oourt, E:
CORPORATION-STOCKHOLDERS-SUIT TO ENFORCE LIABILITY-PARTIES.
A bill in equity to charge holders of nominally paid-up stock cannot be maintained on behalf of a single judgment creditor, but must be on behalf of all entitled to share in such assets.
2. SAME-CORPORATION IN HANDS OF RECEIVER.
Semble, that where the corporation is in the hands of a receiver he is not the only party who can sue.
SAME-LIABILITY OF HOLDERS OF NOMINALLY PAID-UP STOCK-NoTtOE.
Holders of nominally paid-up stock, upon which nothing has been paid, are not liable for the amount due thereon, unless they took with notice.
In Equity. Bill to charge holders of nominally paid-up stock on behalf of a single judgment creditor. Demurrer to bill. 'rhe bill charges, in substance. that all of the defendants except the Texas & St. Louis Railway Company are subscribers to and owners of unpaid-for stock issued to them as purchasers of the company's bonds. as a bonus, and that said stock was issued by said company through one Hubbard. who had ostensibly taken the contract to construct said company's road in consideration of all its stock and bonds. though said road was, in fact, constructed by the company itself. Ira C. Terry and Fisher If; Rowell, for complainant. Dyer. Lee et Ellis. Hough, Overall If; ,Judson, Phillips If; Stewart, John G. Chandler, Farrish et Jones, and John P. Davis, for defendants.
BREWER, J., (orally.) In the case of Cleveland Rolling-mill Company v. Texas If; St. Louis Railway Company there is a demurrer to the bill. 'I'he bill is one to charge stockholders in the railroad company for and on behalf of a judgment creditor. Three grounds are alleged: First. That the bill is brought simply on behalf of a single complainant, instead of on behalf of all the creditors. That is a defect: a bill in equity must be in behalf of all entitled to share in such assets. 'l'herefore that calls for a sustaining of the demurrer. Second. That the receiver is the party to bring suit. On the face of these papers, except by implication and reference to other proceed. ings, it does not appear that there was ever a receiver, and, if there
by Benj. F. Rex, Esq., of the St. Louis bar.
RIKER V. ALSOP.
was, we do not think he is the only party who can bring suit for the collection of these unpaid subscriptions of stockholders. The third objection is that it does not appear that these stockholders were original subscribers to the stock of the company, and had not paid for their stock. The bill, I think, is open to criticism in that respect. I do not mean to say that the language does not carry the idea which counsel evidently had in mind, and yet I think it is perhaps not sufficiently perspicuous, and as the demurrer will have to be sustained, and leave given to amend the bill, the language should be made clear and fuller, to show that these parties took the stock directly from the company, and not from a contractor, or that they took it with knowledge of the fact that this party, who is alleged to have been a sham contractor, was such, and that it was simply So device to evade the rule of liability for non-payment of stock. Of course, it is very patent what the idea of the counsel was in the matter; and, giving particular force to the words used, it may be that it is sufficient; but, as long as the bill must be amended in the other respect, it would be better to make it full, clear, and specific, so that there shall be no question as to what the facts are that are charged. The demurrer will be sustained, and leave given to file an amended bill by the next rule-day.
(Circuit Court, B. D. NeuJ York. April 15,1888.)
RAILROADS-BoNDS-FoRECLOSURE OF MORTGAGE-OHIO AND MISSISSIPPI WAY COMPANY.
Contract whereby complainant surrendered certain bonds held by him, and accepted in lieu thereof mortgage bonds. known as "Construction Bonds," of the Ohio and Mississippi Railway Company, (eastern division,) construed. and held, that he was entitled to priority over the claims of the Ohio and Mississippi Railway Company, as reorganized under the title acquired by a foreclosure of a prior mortgage.
In Equity. B. W. Huntington, for complainant. Platt ct Bowers, and Geo. W. Wingate, for defendants.
WALLACE, J. The complainant files this bill to compel the defendants to account as trustees for the value of certain mortgage bonds known as "Construction Bonds," issued by the Ohio & Mississippi Railway Company, (eastern division,) of which he was holder when the defendants transferred to the Ohio & Mississippi Railway Company (as reorganized) the property and franchises of the original company, which they had purchased upon a sale under a foreclosure of a prior mortgage of that company. The theory of the bill is that
when the defendants purchased the property and franchises of the company upon the mortgage foreclosure they were trustees for the complainant, and for other holders of outstanding construction mortgage bonds, and it was their duty to preserve and recognize the lien of the holders of such bonds as paramount to the title acquired upon the purchase; but that in violation of this duty they conveyed the property purchased discharged of the lien of the bonds to the Ohio & Mississippi Railway Company, (as reorganized,) and thereby extinguished the prior lien. It appears by the proofs that in December, 1858, the complainant was the owner of nine bonds, for $1,000 each, part of an issue of $4,242,000, known as "Construction Bonds," created by the railway company and secured by a mortgage upon its property and franchises. The company had created two prior issues of mortgage bonds secured, respectively, by first and second mortgages upon its property, the construction bonds being secured by a third mortgage. 'rhe company was financially embarrassed. It was in default three interest payments on its first mortgage bonds, as well as in the payment of interest upon its second mortgage bonds, its construction bonds, and its income bonds, which were secured by a fourth mortgage. 1'he defendant Alsop, and six others who were interested as creditors of the railway company or otherwise, issued a circular to the stockholders and creditors of the company, suggesting a plan to reduce its indebtedness and place it upon a more secure financial footing. By this plan the second mortgage bonds of the company which, with principal and unpaid interest, amounted to something over $300,000, were to be retIred; the amount of construction bonds, the principal of which was $4,242,000, was to be reduced one-third; the income bonds, comprising an issue of $3,200,000 were to be exchanged for capital stock; and an adjustment was to be made of all other indebtedness, so that the total mortgage debt of the company should be but $f),OOO,OOO, and the capital stock of the company should be limited to $7,500,UOO; making the aggregate liabilities of the company $12,500,000, as against $18,393,000 then existing. By that circular the stockholders and creditors of the company were invited to join in an agreement annexed, dated as of the fifteenth day of December, 1858, in which Alsop and the others offered to act as trustees for all parties who might subscribe, to effect an adjustment between the bondholders, stockholders, creditors, and the railway compltny, according to the general plan proposed by the circular. This agreement, in substance, provided that the railway company should issue and deliver to the trustees $7,500,000 of capital stock, to be exchanged by them for the outstanding shares, to enable them to retire the whole issue of second mortgage bonds, one-third of the issue of the construction bonds, and the whole issue of income bonds; that the stockholders of the company should surrender their stock to the trustees, and receive in exchange new stock for one-tenth of the