Sanger v. Upton - 91 U.S. 56 (1875)
U.S. Supreme Court
Sanger v. Upton, 91 U.S. 56 (1875)
Sanger v. Upton
91 U.S. 56
1. Where, in a district court of the United States, a corporation was adjudged a bankrupt, an assignee appointed, and an order made that the balance unpaid upon the stock held by the several stockholders should be paid to him by a certain day, that notice of the order should be given by publication in a newspaper or otherwise, and that in default of payment he should collect the amount due from each delinquent stockholder, and it appearing that he had given the notice required, and that the defendant below had failed to make payment pursuant to the order, held that the order was conclusive as to the right of the assignee to bring suit to enforce such payment.
2. The court pronouncing the decree of bankruptcy had jurisdiction and authority to make the order, and it was not necessary that the stockholders should have received actual notice of the application therefor. In contemplation of law, they were before the court in all the proceedings touching the corporation of which they were members.
3. It was competent for the court to order payment of the unpaid stock subscriptions, as the directors, under the instructions of a majority of the stockholders might, before the decree in bankruptcy, have done.
4. The capital stock of an incorporated company is a fund set apart for the payment of its debts.
5. As the company might have sued a stockholder for his unpaid subscription at law, the assignee succeeding to all its rights has the same remedy.
6. It appearing in evidence that two certificates of stock in blank as to the stockholder's name were issued and delivered to the plaintiff in error, that she had paid to the company all that was then payable, and received a dividend, and that her name was placed upon the stock list, she was estopped from denying her ownership.
This was an action of assumpsit, brought by Clark W. Upton
as assignee in bankruptcy of the Great Western Insurance Company against Mary C. Sanger for the balance unpaid on her stock. The bankruptcy court made an order that the amount unpaid on the capital stock of the corporation should be paid to the assignee on or before Aug. 15, 1872, and, in default thereof, that the assignee proceed to collect the same, and that notice of this order be given to the stockholders by publication or otherwise. Notice was given by publication and by mailing to each subscriber a copy of the order with a demand for payment. Defendant below failing to pay, this suit was brought. The evidence offered on the part of the plaintiff below, and excepted to by the defendant below, is stated in the opinion of the Court.