A, a foreign steamship corporation, went into liquidation August
15, 1867, and sold and transferred all its ships and other property
August 16, 1867, to B, another foreign corporation, formed for the
purpose of buying that property
Page 115 U. S. 117
and continuing the business, with the right reserved to all
stockholders in A to become stockholders in B. The officers in the
old company became stockholders in the new company, and the
business went on under their direction as officers of the new
company. October 24, 1867, a collision took place in New York
harbor between one of the steamships so transferred and some canal
boats, resulting in the death of plaintiff's intestate. Plaintiff
sued A, in a state court of New York, to recover damages under a
statute of that state, for the loss of her husband, and obtained a
verdict, and recovered judgment.
Held That this judgment
against the old company could not be enforced in equity against its
former property in the hands of the new company thus transferred
before the time when the alleged cause of action arose.
The facts which make the case are stated in the opinion of the
Court.
MR. JUSTICE FIELD delivered the opinion of the Court.
This was a suit in equity to charge the defendant, the National
Steamship Company, with the payment of a judgment recovered against
another company, known as the National Steam Navigation Company.
Both of the companies were English corporations, formed under the
English statute known as the Companies Act of 1862. The National
Steam Navigation Company continued in business until August 15,
1867, when it went into liquidation. On the following day, it sold
its ships and its other property, and delivered the same to the
National Steamship Company. This latter company was incorporated on
the first of July, 1867, under the name of the "Steamship Company,
Limited." The change of its name to the National Steamship Company
was made August 8, 1867. After the sale of its property, the
Navigation Company had no power to do business under the Companies
Act and existed only for purposes of liquidation.
On the 24th of October, 1867, the steam tug
Princeton
was going up the harbor of New York with a tow of fourteen canal
boats loaded with coal. When near the mouth of the
Page 115 U. S. 118
Hudson River, she met the English steamship
Pennsylvania, owned by the National Steamship Company, and
a collision took place between the canal boats and the steamship by
which three of the boats were sunk and a man by the name of Wilson
W. Gray was killed. The widow of Gray took out letters of
administration upon his estate and then brought an action in the
Superior Court of the City of New York under a statute of the state
for damages caused by the loss of her husband against the National
Steam Navigation Company, evidently supposing that this company
continued the owner of the steamship as it formerly had been. In
May, 1868, she obtained a verdict, and in June following, judgment
was entered thereon for $3,289.05.
The National Steamship Company was formed for the purpose of
buying the property of the navigation company and conducting the
same business. The consideration for the purchase was stock of the
new company to such of the old stockholders as would consent to
take it and money to the dissenting stockholders. Provision was
made to raise the money necessary to fill up the capital stock to
the required sum, and the sale was subject to the debts of the old
company on August 16, 1867. The officers of the old company became
the officers of the new company.
The widow Gray issued execution on her judgment to the Sheriff
of the County of New York, which was returned unsatisfied. In
December, 1869, she assigned the judgment to one Asa F. Miller, and
in January, 1870, he commenced a suit in the supreme court of New
York against the National Steamship Company, setting forth in his
complaint the judgment of the superior court, the return of the
execution unsatisfied, the incorporation of the National Steam
Navigation Company, and that, a short time before the commencement
of the action, it was engaged in the shipping business between New
York and Liverpool, employing steamers and having a general agency
in New York; that at the time of the accruing of the cause of
action, it was thus engaged in business; that about the time the
judgment was obtained and the execution issued, the company assumed
and became known by the name of the
Page 115 U. S. 119
National Steamship Company; that the sheriff was thereby
disabled from levying on the property which, up to that time, had
stood in the name of the navigation company; that the change of
name was to cure a technical defect; that the steamship company was
incorporated under a statute limiting the liability of the
stockholders, and to that company the navigation company had handed
over its ships and all its other property to a sufficient amount to
pay the judgment; that such property remained under the same
control; that the change of name was made fraudulently to prevent a
levy upon the property; that the steamship company held the ships
of the navigation company as trustee for the creditors of the
latter company; that the navigation company had not been within the
State of New York for a year, and had no property except that
standing in the name of the steamship company, and that this last
company had a steamship and other ships in its hands, the property
of the navigation company. The prayer of the complaint was that the
steamship company might be decreed to pay the judgment and be
enjoined from disposing of the property it had received from the
navigation company, and for the appointment of a receiver.
The steamship company answered, admitting the judgment of the
plaintiff, the return of execution issued upon it unsatisfied, and
the organization of the navigation company, alleging its own
distinct incorporation, admitting the sale, transfer, and delivery
of the steamships and business of the old company to the new
company August 16, 1867, the conduct of its shipping business and
its employment of steamers by the old company up to such transfer
and sale, and alleging that the old company had no property in the
state, with a general denial of other allegations. The case was
heard upon the pleadings and proofs, and at a special term of the
court, on December 12, 1870, judgment was rendered dismissing the
complaint. On May 7, 1875 at a general term of the court, this
judgment was affirmed. A year after its affirmance, an order was
entered at a special term by consent of parties discontinuing the
suit. Before this was done, Asa F. Miller, the plaintiff therein,
assigned the superior court judgment to one Morrison, and in
Page 115 U. S. 120
February, 1887, Morrison assigned it back to the plaintiff, who
soon afterwards commenced the present action in the supreme court
of New York. On motion of defendants, it was removed to the circuit
court of the United States, and there the plaintiff filed a bill in
equity in place of the complaint filed in the state court. This
bill set up the agreement between the two companies of August 16,
1867; alleged the identity of the officers of the two companies;
mentioned the recovery of the judgment of the plaintiff, and the
various assignments of that judgment, the unsatisfied execution
issued thereon, the transfer of the ships and other property of the
old navigation company to the new steamship company; alleged that
the navigation company had not made a change of ownership of the
steamers by sufficient bills of sale according to British law;
mentioned the winding up of the navigation company, and averred
that the new company held the property of the old company in fraud
of the right of the plaintiff to have his judgment satisfied out of
it, and that the navigation company had no property not embraced in
the transfer to the steamship company out of which execution upon
the judgment could be satisfied. The bill prayed for a receiver of
the property of the navigation company at the time of its
assignment, for an accounting by the defendant of such property,
and that the receiver be directed to sell the property and pay the
debts of the plaintiff, and for general relief. The defendant in
its answer admitted the agreement, the substantial identity of the
officers of the two companies, the judgment recovered in the
superior court, the unsatisfied execution issued thereon, and the
sale and delivery of all the property of the old navigation company
to the defendant on the 16th August, 1867, for a full
consideration; averred that the defendant at that time became owner
of all the property, including the steamers; denied the fraudulent
transfer alleged and the ownership of the steamships by the
navigation company at the time of the recovery of the judgment, or
of the return of the execution; reiterated the sale and delivery of
the steamships to it before the judgment by good and sufficient
instruments, and admitted the liquidation of the navigation company
and the winding up
Page 115 U. S. 121
of its affairs. It also set up the judgment recovered by the
defendant in the case of Miller against it in the Supreme Court of
New York as a bar to the present action, denied all fraud in the
transfer of the property of the old company, and asked that the
bill be dismissed. The case was heard upon the pleadings and
proofs, and a decree was rendered therein by the circuit court
dismissing the bill. From that decree the case is brought here by
appeal.
It is not necessary to consider the position that the judgment
of the supreme court of New York in the case of Miller against the
defendant, is a bar to the prosecution of this suit. It is
sufficient for the affirmance of the decree of the court below that
the judgment of the Superior Court of the City of New York, which
was sought to be enforced against the new company, was recovered
against the old company. That company had then ceased to do
business of any kind, and was incapable, under its articles of
incorporation, of doing any except so far as might be necessary to
wind up its affairs. It existed only for purposes of liquidation.
It could no more own and run a steamship than it could own an
manage any other property. There is nothing in the transfer of the
property from the old company to the new of which the plaintiff can
in any way complain. It took place before the collision occurred
which caused the death of the plaintiff's husband. The stockholders
of the old company do not complain of that transfer, and it does
not appear that complaint comes from any creditors then existing of
that concern. The debts of the old firm were assumed by the new,
and there is neither reason of nor sense in attempting to fasten
upon the new company a judgment for damages recovered only against
the old. If the plaintiff, by mistake, commenced an action against
the wrong company, it is a fault of which she cannot complain. At
least the new company is not chargeable as though it had itself
been sued, and had its day in court. The navigation company never
made any pretense of ownership after its affairs were closed up,
and neither the plaintiff nor her counsel were ever misled by the
action of the representatives of either company. The case is too
plain for further comment.
Decree affirmed.