222
FEDERAL
BEPOBTBB.
stockholders decided to levy the assessment. This ma.y have been bad judgment, but general creditors cannot suffer for that reason. If the reorganization of the bank had proved successful, the stockholders might have saved their property. The assessment was voted, the greater part paid in, and the bank reopened. From this time new rights and equities intervened. It is no answer to the rightful claims of new creditors to enforce, through a receiver, the statutory liability of stockholders to say that the assessment went to pay old debts. Suppose the bank had continued business for 10 years, instead of two months, and had paid off all its old liabilities, and incurred new ones; surely the stockholders could not get rid of their individual liability by setting up that, 10 years before, there was paid an assessment of 100 per cent., which went to liquidate certain claims against the bank. If the bank had not reopened, and the assessment had passed into the hands of the receiver, the situation might be different. It might then be claimed with more reason, that, though the assessment was paid for the purpose of restoring the stock, and enabling the bank to continue, it had not been devoted to that purpose, but, having passed into the hands of the receiver, it could be used for the payment of general creditors, and it should therefore be regarded as an equitable performance of the statutory liability. But here the assessment was used for the very purpose for which it was made. It went to restore the impaired stock, and thus enable the bank to reopen. To be sure, it was used to pay some debts, because that was incidental to restoring the stock, but it did not go to pay all debts. In our opinion, this assessment, made under another section of the statute, and for a different purpose, cannot, on any legal or equitable ground, be held to relieve a stockholder from his individual liability under section 5151. The question whether a bill in equity will lie to restrain a suit of this character was not pressed at the hearing; but, 'independent of this consideration, our conclusion is that the bill must be dismissed. . Bill dismissed.
MOGRlFF,
Trustee, etc., v.
BALDWIN
and others.1
(Oircuit Oourt, S. D. Georgia, W. D.
January 23, 1885.)
EQUITY PRACTICE-ExECU'rION ISSUED ON DEcnEE-POWER OF THE COURT TO PREVENT ABUSE OF PnocEss.
An execution was issued upon a decree. The defendant filed an affidavit of illegality, (a remedy permitted by the state law,) suggesting various grounds upon which the execution was alleged to have been illegally issued, levied, and advertised. Upon motion made by the plaintiff to the execution to dismiss the affidavit of illegality, held, that the same might be regarded as a statutory remedy adopted by the rule of this court, or as a motion or petition supported by the affidaVit, and the same would be retained for a hearing. JReported by W. B. HllI, Esq·· of the Macon bar.
Baldwin, Starr &Co. filed their bill in 1868 against McGriff, as trustee of Sarah M. Ryan, to subject her trust estate to a debt in their favor. The pleadings showed that her trust estate was created under a marriage settlement by which Mrs. Sarah M. Ryan was made tenant for life of certain property, with remainder to her children. The property was acquired by Mrs. Sarah M. Ryan (formerly Taylor) under will of her mother, by which, also, the property so acquired was'charged with a certain debt in favor of William M. Snell, amount· ing to $2,800. In 1874 the cause was referred to a master and he was directed to report what portion of the debt sued on was chargeable to, and to be paid out of the rents and income of, said Sarah M. Ryan's trust estate. Afterwards, and before any hearing was had before the master, Sarah M. Ryan, the life tenant, died. McGriff, the trustee, and also the remainder-men and said Snell, who had an interest in said land, regarded said bill as at end by reason of the death of said Sarah M. Ryan. None of them had any notice of the hearing by the master, or of his report, or of the final decree, which was taken against McGriff, as trustee of Sarah M. Ryan, several years after her death, and after the remainder-men and said Snell had effected a partition of said lands in the state court and were in possession of their respective shares. The decree was taken against the entire property, as the property of Sarah M. Ryan, and execution issued on said decree was levied on said land, and the entire fee therein advertised for sale. The defendant, Thomas J. McGriff, trustee, filed an "affidavit of illegality" in accordance with the state statute, alleging substantially (1) that he and the parties at interest had no notice of the hearing of said case by the master, and was not there represented by counsel, nor did· he have notice nor was he represented when said decree was taken; but well knowing that Sarah M. Ryan's death extinguished the trust estate against which the bill was proceeding, and having received no notice as aforesaid of said proceedings, he believed the whole case abandoned, and never heard of the master's report or decree until the execution was levied. He submitted that a decree taken against the trust estate of a deceased life-tenant, was wholly void. (2) The affidavit alleged that the execution was proceeding illegally because the advertisement misdescribed the property, failed to follow the decree, no notice of the levy was given as required by law, the sale was advertised to occur at the wrong place, etc. The case was heard upon a motion to dismiss the affidavit of illegality, the sole ground urged being that this remedy was inappropriate; that defendant had no remedy except a bill of review. Bacon ct Rutherford and E. F. Best, for Baldwin, Starr & Co. Hill et Harris, for McGriff, trnstee. SETTLE, J., (m·ally.) I could find support forthe conclusion I have reached in this case in the rule adopted by this court in reference to
In Equity.
224
PDEBAL BEPOBTB
the remedy known in the state laws as "an affidavit of illegality," this being a mode by which a defendant in an execution may set up grounds showing that an execution has issued or is proceeding illegally. Code, § 3664. The rule referred to is the forty-third rule of this court, and is as follows: "In cases of illegality, the marshal shall observe the rules applicable to sheriffs in like cases." It is conceded that the sheriff in a "like case" would be bound to accept an affidavit of illegality, and arrest the sale under the execution. Code, § 4215. But I do not think it necessary to place the decision upon this ground. The following considerations have most weight with me in leading to the conclusion reached, which is to refuse the motion to dismiss the paper filed as an affidavit of illegality. Here is a writing, by whatever name it be called, by which it is shown to the court of equity that its own decree and process, issued upon its decree, are about to be abused, and injustice is about to result. The property of certain remainder-men, whose interest has now vested, and of a third party who claims under a paramount title, is about to be sold, as alleged, under an execution against the estate of a life-tenant in the said property, who was dead when the decree was issued, and whose estate perished with her death. Whether this pleading now before the court be treated as an affidavit of illegality, or as a motion supported by that affidavit, which is my inclination, I am satisfied that the court bas such power over its own decree and its own process as to suspend the enforcement thereof until a hearing can be had on the case made. If the information that its process was about to be abused was brought to the knowledge of the court by its own officer, I am not sure but that it would even then be the right and duty of the court to check that abuse, and prevent injustice, ex 8UO rnero motu. It is said that the only remedy in a case like this is the bill of reo view. I do not think so. The supreme court have virtually held that in matters of this character the form of the proceeding is less importa.nt than the substance of the right; and that in some instances mere motions, supported by affidavit, are the most appropriate modes of relief. Krippendorj v. Hyde, 110 U. S. 276; S. C. 4 Sup. Ct. Rep. 27. If there were no remedy in a case of this kind, nor alleged to ex· ist, it would be the right and duty of the court to frame one.
LEmaR VALLEY COAL CO. V. RAMBLEJI.
LEHIGH VALLEY COAL CO.
v.
HAlIffiLEN
and others.
(District Uourt, N. D. Illinois.
March 9, 1885.)
1.
TRADE NAME-FOREIGN CORPORATION-CORPORATION ASSUMING SAME ,:fAMEiNJUNCTION.
A United States circuit court cannot interfere by injunction, at the intance of a corporation organized under the laws of another state, and preve:!t any necessary step from being taken, under the statute of the state in which such court is located, in the creation of a corporation licaring the name as the foreign corporation.
2.
SAME-RELIEF, WHEN GRANTED.
Whether relief could be granted after the creation of the corporation, and use of the name of the foreign corporation ill fraud of its rights, is not determined.
In Equity. F. Ullmann, for complainant. Beck « Roberts, for defendants. GRESHA.M, J. The complainant company was organized under th9 laws of Pennsylvania, in 1875, for the purpose of mining anthracite coal in that state, and selling the same there and elsewhere. It owne valuable coal mines in Pennsylvania, and does a large and lucrative business. For a number of years it has had an extensive and proflt· able business in the west and north-west; and for convenience in tlH' management of that business it has maintained an agency at Chi· cago, where it owns real estate, including a dock worth $200,000, and has on hand coal worth $400,000. The defendants in this suit, wishing to create a corporation in Illinois bearing the same name as the complainant, to carryon the same business, filed their articles of association with the secretary of state on the twenty-sixth of December, 1884, under the general laws of Illinois authorizing the creation of corporations. The secretary of state thereupon issued to the defendants a license as commissioners to open books for subscription to the capital stock of the new corporation, to be known as the Lehigh Val· ley Coal Company. This suit was brought to prevent the defendants, by injunction, from receiving stock subscriptions, or taking any other steps necessary to be taken under the statute, in the creation of the new corporation. The object of the defendants in causing an Illinois corporation to be created, bearing the same name as the complainant company, is obvious. They hope, by this means, to secure the benefit of part, at least, of the patronage which the complainant has acquired. Unwilling to engage in open, manly competition with the complainant and others carrying on the same business, the defendllnts resort to a trick or scheme whereby they hope to deceive the public, and obtain an unfair advantage of the complainant. Such conduct might be fairly characterized more harshly; and it is with extreme reluctance that I deny the complainant the relief prayed for. The complainant is a foreign corporation, and it is only by comify v.23F,no.5-15