Ogilvie v. Knox Insurance Company - 63 U.S. 380 (1859)
U.S. Supreme Court
Ogilvie v. Knox Insurance Company, 63 U.S. 22 How. 380 380 (1859)
Ogilvie v. Knox Insurance Company
63 U.S. (22 How.) 380
In a bill by judgment creditors against an incorporated insurance company and its stockholders to compel the latter to pay up the balance due on their several subscriptions to the stock, they cannot be allowed to defend themselves by an allegation that their subscriptions were obtained by fraud and misrepresentation of the agent of the company.
It is too late, after the investment is found to be unprofitable, and debts are incurred, for stockholders to withdraw their subscriptions, under such a pretense or plea.
It is not a sufficient objection to the bill for want of proper parties that all the creditors or stockholders are not sued. If necessary, the court may, at the suggestion of either party that the corporation is insolvent, administer its assets by a receiver, and thus collect all the subscriptions or debts to the corporation.
This was a bill filed on the equity side of the court by Ogilvie, Angle & Co., traders in partnership in Iowa, together with twelve other persons, citizens of Missouri, Ohio, and Michigan, against the Knox Insurance Company and against Levi Sparks and thirty-six other persons, subscribers to the capital stock of the company. Being a creditor's bill, filed by the complainants and such other creditors as might make themselves parties, thirty-two other creditors came in and made themselves parties to the suit. The bill alleged that the complainants had recovered divers judgments against the insurance company, upon which executions had issued, the return
to which had been, "no property;" that the other defendants severally subscribed for stock in the company, and were still indebted for it, payment not having been enforced by the company. The prayer of the bill was that they might be decreed to pay their subscriptions, and that the judgments might be satisfied from the fund thus produced.
At the September rules, 1852, the bill was taken pro confesso against all the defendants, but afterwards they all except the company appeared, demurred, and, upon the demurrer being overruled, answered. The securities, being the subscription notes, were brought into court. Collum's answer was adopted by most of the other defendants, which answer is particularly noticed in the opinion of this Court. After sundry other proceedings, not necessary to be mentioned, the court dismissed the bill, and the complainants appealed to this Court.