National Tube Works Co. v. Ballou - 146 U.S. 517 (1892)
U.S. Supreme Court
National Tube Works Co. v. Ballou, 146 U.S. 517 (1892)
National Tube Works Company v. Ballou
Argued December 2, 1892
Decided December 19, 1892
146 U.S. 517
A Massachusetts corporation brought a suit in equity in the Circuit Court of the United States for the Southern District of New York against a citizen of New York, founded on a judgment obtained by it in a state court of Connecticut and an execution issued there and returned unsatisfied against a Connecticut corporation to compel the defendant to pay what he owed on his subscription to shares of stock in the Connecticut corporation, and have it applied toward paying the debts of that corporation, including one due to the plaintiff. Held that the bill was defective in not alleging any judgment in New York against the corporation or any effort to obtain one or that it was impossible to obtain one.
This is a suit in equity, brought in the Circuit Court of the United States for the Southern District of New York on November 1, 1888, by the National Tube Works Company, a Massachusetts corporation, against George William Ballou, a citizen of New York.
The bill sets forth that the Wiley Construction Company was a corporation organized in February, 1880, under the joint-stock laws of Connecticut and located in Hartford in
that state. The bill is filed on behalf of the plaintiff and such other creditors of the Wiley Company as may come in and be made parties to the suit and contribute to the expenses thereof. It sets forth that the capital stock of the Wiley Company was fixed at $500,000, divided into 5,000 shares of $100 each; that all of the stock was subscribed for; that the defendant subscribed and agreed to pay at par for 2,499 shares; that he had never paid in anything on account of such subscription; that immediately after the organization of the company, it proceeded to carry on its business, and continued to do so until about July, 1883, the defendant and the other subscribers to the stock taking an active part in the management and acting as stockholders and directors of the company; that between May, 1880, and August, 1882, the plaintiff sold and delivered to it merchandise at the agreed price of $78,955.49; that it had paid $40,789.51 on account thereof; that on March 10, 1883, the Wiley Company, being then indebted to the plaintiff in $49,828.37, gave to the plaintiff its promissory note for that amount, with interest; that no part of the note had been paid; that in October, 1886, in the Superior Court for the County of Hartford, in the State of Connecticut, the plaintiff recovered a judgment on said note against the Wiley Company for $52,041.51, damages and costs, that company having been duly served with process, and having appeared in the action; that in June, 1887, the judgment was, on appeal, affirmed by the Supreme Court of Errors of Connecticut, and is still in force; that execution was issued out of said superior court against the property of the Wiley Company to the Sheriff of Hartford County, wherein the principal office of said company was situated, and had been returned unsatisfied; that the Wiley Company had no fund or assets wherewith to pay the claim of the plaintiff, and that the whole of the $52,041.51 was still due to it.
The prayer of the bill is that an accounting be had of the amount unpaid on the stock subscription of the defendant in the Wiley Company, and that he be decreed to pay so much of the balance found unpaid on his subscription as will be sufficient to pay such debts of the Wiley Company as may
be proved in this suit, including the said judgment in favor of the plaintiff. The Wiley Company is not made a party to the suit.
There is not in the bill any statement that the plaintiff has recovered any judgment against the Connecticut corporation in any court of the State of New York, or in any court of the United States within the State of New York, or issued an execution within the State of New York to collect its claim against the Wiley Company, nor does the plaintiff allege in its bill any reason why it has not done so or why it cannot do so.
The defendant demurred to the bill and set forth as ground of demurrer that the plaintiff did not by its bill make such a case as entitled it in a court of equity to any discovery or relief touching any of the matters contained in the bill, and also that it appeared by the bill that the plaintiff was not entitled to the discovery or relief prayed for. The case was heard before Judge Wallace in the circuit court, and a decree was entered, dismissing the bill, with costs. The plaintiff has appealed to this Court.