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Opinion of the Court.
property and the fruits of their industry in the common body, from which they could not afterwards be severed or withdrawn except by unanimous consent. It was fashioned according to the pentecostal ideal, that all who believed should be together and have all things common. It was intended to be in fact, as they frequently styled themselves, but a single family upon a large scale with only one purse, where self was to be abjured and the general good alone considered." The court, viewing it solely as a business undertaking, held that the organization 'was not prohibited by any statute or in contravention of any law regulating the possession, ownership or tenure of property.' See also Speidel v. Henrici, 120 U. S. 377; Gasely v. Separatists, 13 Oh. St. 144; Waite v. Merrill, 4 Maine, 102; Gass v. Wilhite, 2 Dana (Ky.), 170; State v. Amana Society, 132 Iowa, 304; 8 L. R. A. (N. S.) 909, note; 11 Ann. Cas. 236, note.
It is said that in these cases, the contracts had been fully performed, and that the effort was made either to partition or distribute the property of the society, or to recover the value of property which had been actually conveyed or services which had been rendered to it. But the validity of the agreements there in question, against the objection based upon public policy, was distinctly recognized.
In the present case, there was no infringement of Father Wirth's liberty or right to property. He did not withdraw from the Order. He had agreed, by accepting membership under the complainant's constitution, that his individual earnings and acquisitions, like those of other members, should go into the common fund and, except as required for the maintenance of the members, should be used in carrying out the charitable objects of the Order. It is not unlikely that the copyrights upon his books derived their commercial value largely, if not altogether, from his membership. Certainly, the equitable ownership of these copyrights, by virtue of his obligation, vested in the com
plainant and the moneys in question when received became in equity its property and were subject to its disposition. As to both, Father Wirth stood in the position of a trustee.
The further objection that the claim is barred by the statute of limitations was held by the Circuit Court to be untenable and we agree with that view. The applicable limitation is six years (Revised Laws, Minnesota (1905), § 4076,) and the bill was filed within six years after Father Wirth's death. There is no such clear evidence of repudiation of the trust as would warrant the conclusion that the statute began to run at an earlier date. The decree of the Circuit Court of Appeals is reversed and that of the Circuit Court is affirmed.
It is so ordered.
SELIG v. HAMILTON, RECEIVER OF EVANS, JOHNSON, SLOANE COMPANY.
ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.
No. 361. Argued May 6, 1914.-Decided June 22, 1914.
The legislation of Minnesota with respect to the liability of stockholders, as construed by the courts of that State, has heretofore been reviewed and its constitutional validity upheld by this court in Bernheimer v. Converse, 206 U. S. 516, and Converse v. Hamilton, 224 U. S. 243.
A stockholder cannot, under the statutes of Minnesota, even by a bona fide transfer of his stock, escape liability for debts of the corporation theretofore incurred.
Bankruptcy proceedings against a Minnesota corporation do not stand
in the way of a resort to the statutory method of enforcing the liability of a stockholder which is not a corporate asset. Congress has not yet undertaken to provide that a discharge in bankruptcy of a corporation shall release the stockholders from liability.
Statement of the Case.
A foreign stockholder of a Minnesota corporation is not concluded by an order of the state court in sequestration proceedings under the statute, and in which he was served only by publication without the State, as to any matter relating to his being a stockholder or as to other personal defense.
When his ownership of the stock ceases, a stockholder in a Minnesota corporation ceases to be liable for debts of the corporation thereafter incurred, although liable for debts previously incurred.
234 U. S.
Under the state statute, the Minnesota court, in a proceeding to assess stockholders for liability, may assess persons who previously were stockholders for liability for debts incurred during the period they owned the stock.
While a stockholder not personally served may urge his personal defenses in a suit to recover the assessment made in sequestration proceedings of an insolvent Minnesota corporation, he may not reopen the amount of the assessment or the question of the necessity therefor.
What the Minnesota court determines as to the nature of the assessment and its application to present and former stockholders must be ascertained from the order itself.
Whether a former stockholder is ratably or otherwise liable with present stockholders is not a question which goes to the jurisdiction of the Minnesota court making the order, but a question to be submitted for correction, if any, to the court making the order and not to another court in a collateral attack.
In a proper judicial proceeding to determine the amount of indebtedness of an insolvent corporation and the dates of origin of such indebtedness, the individual stockholders are sufficiently represented by the presence of the corporation itself; and the decree establishing such indebtedness is admissible as evidence thereof in a suit against a stockholder.
Bernheimer v. Converse, 206 U. S. 516, followed to the effect that
§ 394, New York Code of Civil Procedure, does not apply where the corporation is not a moneyed one or a banking association and that the six year period does apply under § 382 to the claim of a receiver of a foreign business corporation for personal liability of a stockholder assessed under the state statute.
THE facts, which involve the validity of a judgment of the District Court of the United States for the Southern District of New York enforcing the liability of a stock
Argument for Plaintiff in Error.
234 U. S,
holder of an insolvent Minnesota corporation, are stated in the opinion.
Mr. Abram I. Elkus, with whom Mr. Wesley S. Sawyer was on the brief, for plaintiff in error:
The order of assessment does not purport to decide defendant's liability, but only the amount of probable debts and assets and the extent to which it was necessary on the basis of all debts to resort to the liability of stockholders.
The decree allowing the claims filed did not adjudge when they accrued. Stockholders are not bound by this decree.
The sole determination is that an assessment on a basis of all debts of such a percentage on the capital stock will not more than pay the corporate debts. No other question was considered by the court in making the order of assessment.
Defendant is liable only ratably on an assessment based on debts which existed on September 5, 1904, and are unrenewed, and based on all stockholders liable to contribute toward such debts. No such assessment has been made.
The Minnesota court did not have jurisdiction to render a decree with the effect, as construed by the trial court, of adjudging the liability of defendant.
The order of assessment cannot be conclusive upon points other than those properly before the court and necessarily decided.
The action is barred by the statute of limitations contained in § 394 of the New York Code.
In support of these contentions, see Alsop v. Conway, 188 Fed. Rep. 568; Balkam v. Woodstock Co., 154 U. S. 177; Bernheimer v. Converse, 206 U. S. 514; Bauserman v. Blunt, 147 U. S. 647; Clark v. Wells, 203 U. S. 163; Commercial Bank v. Azotine Mfg. Co., 66 Minnesota, 413;
234 U. S.
Opinion of the Court.
Commonwealth Ins. Co. v. Hayden, 60 Nebraska, 636; Converse v. Hamilton, 224 U. S. 242; Covell v. Fowler, 144 Fed. Rep. 535; Fairfield v. Gallatin, 100 U. S. 47; French v. Busch, 189 Fed. Rep. 480; Gt. West. Tel. Co. v. Purdy, 162 U. S. 329; Green v. Neal, 6 Pet. 291; Hamilton v. Loeb, 186 Fed. Rep. 7; Harper v. Carroll, 66 Minnesota, 486; Harpold v. Stobart, 46 Oh. St. 397; Howarth v. Lombard, 175 Massachusetts, 570; Manhattan Ins. Co. v. Albro, 127 Fed. Rep. 281; McDonald v. Dewey, 202 U. S. 510; Moores v. Nat. Bank, 104 U. S. 625; Morgan v. Hedstrom, 164 N. Y. 224; Mutual Fire Ins. Co. v. Phænix Co., 108 Michigan, 170; Old Wayne Life Assn. v. McDonough, 204 U. S. 7; San Diego Co. v. Souther, 90 Fed. Rep. 164; Schrader v. Mfr's Nat. Bank, 133 U. S. 67; Shepard v. Fulton, 171 N. Y. 184; Staten Island Co. v. Hinchcliffe, 170 N. Y. 473; Stokes v. Foote, 172 N. Y. 327; Straw Mfg. Co. v. Kilbourne, 80 Minnesota, 125; Swing v. Humbird, 94 Minnesota, 1; Tiffany v. Giesen, 96 Minnesota, 488; Ward v. Joslin, 186 U. S. 140; Willius v. Mann, 91 Minnesota, 494; Constitution of Minn., Art. 10, § 3; act of June 30, 1876, c. 176, § 1, as amended in 1892 and 1897; Rev. Stat., §§ 5151, 5152, 5234; Laws of Minn., 1894, c. 76; Laws of Minn., 1899, c. 272; Laws of Minn., 1899, c. 34, § 2599; Laws of Minn., 1905, c. 58; N. Y. Code Civ. Pro., § 394.
Mr. James E. Trask, with whom Mr. E. H. Morphy and Mr. John J. Clark, were on the brief, for defendant in
MR. JUSTICE HUGHES delivered the opinion of the court.
This action was brought in the District Court of the United States, for the Southern District of New York, to enforce the liability of a stockholder of an insolvent Minnesota corporation.