Andrews v. Moen , 162 Mass. 294 ( 1894 )

Holmes, J.

This bill is brought to compel the payment of part of a subscription for stock in the company of which the plaintiff is receiver. It does not appear sufficiently that the receiver has a locus standi outside of New York; but if it be assumed that he has, the claim is a simple claim for a debt, and is made nothing more by the allegations that there has been a fraudulent but vain pretence of paying it, of a kind which does not need the aid of equity to set it aside. That is all that the other allegations of the bill amount to. It is averred that the defendant’s intestate attempted to defraud future creditors of the corporation and the corporation by turning over worthless notes and claims in satisfaction of the balance remaining due for the stock, but that the attempt was so far vain that there was no valid satisfaction. In fact it is alleged in terms that the estate in the defendant’s hands “ remains liable in law and in equity to pay ” the balance. This being so, there is no ground for taking jurisdiction in equity. The claim does not arise out of the alleged frauds; it simply has failed to be defeated by them, either at law or in equity. If in, New York equity might take jurisdiction, we presume that it would be only as a means of winding up and adjusting the relations between the company, the creditors, and the stockholders under the local statutes; a matter which we are not asked to attempt and should not attempt. What remedies might be open in the courts of that State to protect the rights of creditors, we have no occasion to consider.

We may add, that, as we understand the bill, the claims turned over were valid claims against the partnership which the corporation succeeded, and they were worthless only in the sense that the partnership was insolvent, and that the whole transaction by which the corporation assumed its assets and liabilities was a fraud. But the bill does not attempt to undo that transaction, and it is hard to see how the plaintiff can repudiate the satisfaction accepted from the defendant’s intestate without returning what the corporation received. ■ However, as the bill goes on the footing of such a repudiation, there is no jurisdiction on the ground of an account, to be taken of the sums, if any, properly to be allowed the defendant for the notes and claims transferred by his intestate.

Bill dismissed.