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Atlantic Dredging Co. v. Beard

Supreme Court of New York, Appellate Division

June 23, 1911

WILLIAM BEARD and Others, as Directors of the W. H. BEARD DREDGING COMPANY, and WILLIAM BEARD and LAVINIA BEARD, Composing the Firm of WILLIAM BEARD AND COMPANY, Defendants, Impleaded with WILLIAM BEARD, Appellant.

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APPEAL by the defendant, William Beard, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 24th day of March, 1911, as resettled, granting the plaintiff's motion for judgment on the pleadings.


Ralph James M. Bullowa, for the appellant.

Walter L. McCorkle, for the respondent.


The plaintiff brings this action as a creditor of a corporation organized under the laws of the State of West Virginia, known as the W. H. Beard Dredging Company, to recover from the

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defendants the amount of its claim against the dredging company, the individual defendants being members of a copartnership known as William Beard & Co., and the directors of the West Virginia corporation. The defendant William Beard demurred to this complaint upon the ground that there was a defect of parties defendant because the corporation, the dredging company, was not a party defendant, and the stockholders of the dredging company were not parties defendants that causes of action have been improperly united; and that the complaint does not state facts sufficient to constitute cause; of action. The plaintiff thereupon made a motion to the Special Term upon the pleadings, which motion was granted, allowing, however, the demurring defendant to serve an answer within twenty days, upon payment of costs; and from that order the defendant Beard appeals.

The complaint alleges that the dredging company was incorporated under the laws of the State of West Virginia; that chapter 53 of the Code of that State provided (§ 56) that the stockholders could at any time in general meeting resolve to discontinue the business of the corporation; that, upon giving notice of such dissolution to the Secretary of State, the Secretary of State should file the same in his office, and should issue a certificate under his hand and the great seal of the State, reciting such resolution and certifying that the said notice was duly published as required by the statute, and should certify to the clerk of the house of delegates the name of every such dissolved corporation, stating the date of the dissolution thereof, to be printed and bound with the acts of the Legislature; that, as soon as practicable after such resolution is passed, the stockholders should cause ample funds and assets to be set apart, either in the hands of trustees or otherwise, to secure the payment of all debts and liabilities of the corporation, and any creditor who supposes his claim not to be sufficiently secured thereby might obtain an injunction to prevent the distribution of the capital and a decree against any stockholder for the amount of the capital received by him; and the court might appoint a receiver to take charge of and administer the property and assets of the corporation; that (§ 59) when a corporation should expire, or be dissolved, its property and assets should, under the

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order and direction of the board of directors then in office, or the receiver or receivers appointed for the purpose, be subject to the payment of the liabilities of the corporation, and the expenses of winding up its affairs; and the surplus, if any, then remaining should be distributed among the stockholders according to their respective interests. 'And suits may be brought, continued or defended, the property, real or personal of the corporation, be conveyed or transferred under the common seal or otherwise, and all lawful acts be done, in the corporate name, in like manner and with like effect as before such dissolution or expiration; but so far only as shall be necessary or proper for collecting the debts and claims due to the corporation, converting its property and assets into money, prosecuting and protecting its rights, enforcing its liabilities, and paying over and distributing its property and assets, or the proceeds thereof to those entitled thereto.' The complaint further alleges that the dredging company, in violation of said statutes of the State of West Virginia, thereafter transferred and set over all of the property of the said corporation to William Beard and Lavinia Beard, composing the firm of William Beard & Co., and that the plaintiff is and was at the time of the aforesaid acts a creditor of the said corporation in that, in the State of New York, the said corporation, the dredging company, hired from the plaintiff, and the plaintiff rented to it, on the 30th day of March, 1904, a certain scow containing a capacity of 495 cubic yards, known as No. 'A 17' for a period of eight days, to wit, from March 30, 1904, to April 7, 1904, inclusive, at the agreed price of two cents per cubic yard per day, thereby aggregating the total sum of seventy-nine dollars and twenty cents, and which is reasonably worth said sum and is justly due and owing by the said corporation to the plaintiff, no part of which has been paid, although duly demanded.

There is a second cause of action based upon another indebtedness of the dredging company to the plaintiff amounting to $582.30; a third cause of action upon another indebtedness to the dredging company amounting to $2,037.45, and a fourth cause of action based upon another debt of the dredging company to the plaintiff of $100; and the plaintiff demands judgment that the defendants account for the property of the dredging

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company transferred to them; that it be adjudged that the plaintiff have a lien on said property for the amount of its indebtedness, or that the said property be adjudged to be subject to said indebtedness of the plaintiff; and that the same be sold to satisfy the said indebtedness of the plaintiff, or that the ...

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