Hughes v. Hall

Stockbeijxie, J., delivered the opinion of the Court. The Hopldns Clothing Company was incorporated in the year 3906. The stock was divided into two classes, preferred and common. Apparently from the record no subscriptions were taken for the common stock, only for the preferred, and those upon the condition that each subscriber for preferred stock should receive common stock as a bonus to the amount of 25 per cent, of his subscription for preferred stock.

In June, 1910, a bill was hied by Frederick D. Hall, the president of the company, as a creditor and stockholder, which, while not alleging the insolvency of the company, set forth acts tantamount to an allegation of insolvency, and further alleging that “the business of the corporation is in such a condition that the interests of the creditor's and stockholders require that it shall be dissolved under the statute,” and praying that the corporation might be dissolved and a receiver appointed to take charge of and conduct the business, and make some satisfactory disposition thereof under the control of the Court. On the same day that the bill was filed an answer was filed on behalf of the corporation “admitting the truth of the matter alleged,” and consenting to the appointment of a receiver. Thereupon a decree was signed appointing a receiver, and authorizing him to take charge of the effects of the company. In November, 1910, the receiver applied oto the Court for authority “to take such proceedings as may be deemed proper to enforce” a liability of the holders of the common stock ⁵⁵⁰ for the value of that stock held by them, and which they had received as a bonus for their subscription to the jjre-ferred stock.

On this application the Oourt passed an order authorizing the receivers to take “such proceedings as may be deemed proper to enforce the liability of the holders of stock of the Hopkins Clothing Company.” In pursuance of such authority the bill in this case was filed by the receivers against thirty defendants and alleged stockholders. Certain of the defendants demurred, and the demurrer was sustained with leave to the complainants to amend the bill of complaint within thirty days. From that order the present appeal was prayed. There was no motion filed to dismiss the appeal, and it may be doubtful whether the case is yet in form to be properly passed upon by this Court.

The order from which the appeal was taken was in no sense a final order, and while this Oourt has said in Hecht v. Colquhoun, 57 Md. 563 , that “an appeal will lie from an order overruling a demurrer to a bill, where the demurrer goes to the entire bill,” or “where the ruling of the Oourt finally settles some disputed right or interest of the parties,” Chappell v. Funk, 57 Md. 465 ; Darcey v. Bayne, 105 Md. 365 , it by no means follows that an order sustaining a demurrer to an entire bill, which does not dismiss the bill, but grants in terms leave to the complainant to amend, is so far in the nature of a final order that it can properly be made the subject of an appeal. The present case might, therefore, properly be disposed of by an order of dismissal, but the nature and importance of the question presented seems to warrant an expression of the view of this Court, involving as it does the construction of an important statutory provision. The demurrer to the bill was sought to be sustained upon two grounds: (1) that an “Ordinary chancery receiver” took nothing that the corporation itself did not possess, and that the Hopkins Company having issued the common stock as ⁵⁵¹ full paid stock, could not itself have maintained an action against a holder of the stock, and, therefore, the receiver of the corporation was powerless to enforce such demand, and (2) that no bill to enforce the liability of stockholders could be sustained in advance of a decree dissolving the corporation. Numerous cases were cited to show what property and rights passed to a receiver by virtue of his appointment, and as was stated by Juugu Boyd, in delivering the opinion of this Court, in Collon v. Mayer, 90 Md. 713 , “there is no difficulty in the way of receiver suing for any part of the estate, property or assets that belonged to the corporation and he is authorized by sec. 264a (Acts of 1896, Ch. 349, to maintain suits and proceedings» to set aside preferences and void or fraudulent transfers, payments, etc., even when the corporation itself could not have done it if it had not gone into the hands of a receiever.

But our law does not authorize a receiver to recover any estate, property or assets that never did belong to the corporation, but only such as it was entitled to, when he was appointed, or such as had belonged to it, but had been disposed of contrary to law.” In that case it was held that the receivers could not maintain the action for the reason that the receivers were without express authority ¡to sue, that the test of the liability was the right of the corporation to maintain a claim of the character there asserted, and the fact that at that time the statute did give an express right to the creditors of the corporation which was in the hands of a receiver to proceed directly against the individual stockholder and recover from him the amount of the