In re Monarch Corp.

D. Connecticut

In re Monarch Corp.

177 F. 464, 1910 U.S. Dist. LEXIS 358

DecidedMarch 2, 1910

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This text of 177 F. 464 (In re Monarch Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Monarch Corp., 177 F. 464, 1910 U.S. Dist. LEXIS 358 (D. Conn. 1910).

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Opinion

PLATT, District Judge.

The petition will precede this memorandum.

Two objections are urged against it: Birst. Lack of jurisdiction over the stockholders who reside in other states. Second. Lack of power to grant the request for a specific assessment upon the capital stock, which is said to be in large part unpaid for.

The first objection is easily disposed of. The bankrupt corporation [468]*468is within the jurisdiction of this court, and its officers, directors, and stockholders, in so far as their dealings with the bankrupt are concerned, must, to that extent, surely, be amenable to its authority.

As to the second objection: The trustee in bankruptcy has all the powers originally invested in the board of directors. He can ask for an assessment upon the. capital stock to such an amount as shall be needed to pay debts and expenses, provided the stock shall be found to be in fact partly unpaid for, no matter what the original terms of issue were.

It is alleged that the stockholders have obtained full-paid, nonassessable stock by paying a trifle in cash and agreeing to pay the entire balance in patents, and that the patents have not been delivered to the corporation.

Whether or not, by reason of such failure to deliver the patents, that portion of the stock which the patents were to pay for remains unpaid, is a question of law to be settled when the report from a master bn the facts comes in.

I find nothing relevant to the present situation in Babbit v. Read et al. (C. C.) 173 Fed. 712, except an expression, of opinion that a plenary suit can be brought in the New York jurisdiction without a specific levy of assessment upon the stock in the court having jurisdiction over the bankrupt. There is no ruling that the latter forum was without power to make such a levy, and my respect for Judge Ward is so great that I cannot suspect him of harboring such a thought, with Scovill v. Thayer, 105 U. S. 143, 26 L. Ed. 968, In re Remington, 153 Fed. 345, 82 C. C. A. 421, and Munger Vehicle Tire Co., 168 Fed. 910, 94 C. C. A. 314, lying open on the desk before him.

The prayer of the petition will he granted.

The court has notions of its own about the proper person to act as master, but will be pleased to receive suggestions from the parties interested on that subject, if they desire to make them.

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PLATT, District Judge.

The petition will precede this memorandum.

Two objections are urged against it: Birst. Lack of jurisdiction over the stockholders who reside in other states. Second. Lack of power to grant the request for a specific assessment upon the capital stock, which is said to be in large part unpaid for.

The first objection is easily disposed of. The bankrupt corporation [468]*468is within the jurisdiction of this court, and its officers, directors, and stockholders, in so far as their dealings with the bankrupt are concerned, must, to that extent, surely, be amenable to its authority.

As to the second objection: The trustee in bankruptcy has all the powers originally invested in the board of directors. He can ask for an assessment upon the. capital stock to such an amount as shall be needed to pay debts and expenses, provided the stock shall be found to be in fact partly unpaid for, no matter what the original terms of issue were.

It is alleged that the stockholders have obtained full-paid, nonassessable stock by paying a trifle in cash and agreeing to pay the entire balance in patents, and that the patents have not been delivered to the corporation.

Whether or not, by reason of such failure to deliver the patents, that portion of the stock which the patents were to pay for remains unpaid, is a question of law to be settled when the report from a master bn the facts comes in.

I find nothing relevant to the present situation in Babbit v. Read et al. (C. C.) 173 Fed. 712, except an expression, of opinion that a plenary suit can be brought in the New York jurisdiction without a specific levy of assessment upon the stock in the court having jurisdiction over the bankrupt. There is no ruling that the latter forum was without power to make such a levy, and my respect for Judge Ward is so great that I cannot suspect him of harboring such a thought, with Scovill v. Thayer, 105 U. S. 143, 26 L. Ed. 968, In re Remington, 153 Fed. 345, 82 C. C. A. 421, and Munger Vehicle Tire Co., 168 Fed. 910, 94 C. C. A. 314, lying open on the desk before him.

The prayer of the petition will he granted.

The court has notions of its own about the proper person to act as master, but will be pleased to receive suggestions from the parties interested on that subject, if they desire to make them.

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177 F. 464, 1910 U.S. Dist. LEXIS 358, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-monarch-corp-ctd-1910.

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