State of Ohio v. Snook et al. sively determined by the commisioners when they constructed them as a part of the canal. It is agreed by counsel that the waters of Wolf Run, at a level below that of the basin in dispute, are used for locking boats and the surplus for hydraulic purposes. The authority of the canal commissioners to sell was conferred and restricted by the second section of the act of February 7, 1826: "That the canal commissioners are hereby authorized and empowered to sell all such lands and town lots as heretofore have been, or may hereafter be given, granted or ceded to the state for the benefit of the canal fund, other than those which are situated at points or places on or adjoining the line of the Ohio canals where the surplus water produced by said canals can be advantageously used for hydraulic purposes." The authority of the governor to grant did not exceed that of the commission to sell. 7. It affirmatively appears from the plat of the former proprietors that the disputed boundary of these lots was not located when the plat was made. The plaintiff, not being in possession, was not enti. tled to recover until she had established her own title. It was incumbent upon her to show a subsequent location of such boundary inconsistent with the present claim of the state. Whether the voluminous bill of exceptions contains any evidence to establish such location is a question whose determination would serve no useful purpose in view of the conclusions already stated. The same observation may be made of the other questions presented by the record and argued by counsel. The judgments of the circuit court and the court of common pleas will be reversed. 53 534 57 492 Peter v. The Farrel Foundry & Machine Co. PETER V. THE FARREL FOUNDRY & MACHINE CO. Insolvent Corporation-Procedure to distribute assets-Petition in civil action-Answer and cross-petition by stockholder-Demurrer-Enforcement of stockholder's statutory liability by creditor. 1. Where the petition in a civil action purports to seek a distribution of the assets of an insolvent corporation among its creditors, the assets of the corporation are the subject of the action; and an answer, in the nature of a cross-petition, which discloses assets of the concern, in addition to those disclosed by the petition, or shows a title in the party filing such answer to share in the distribution of such assets, sets forth matters connected with the subject of the aetion. In such case the answer, or cross-petition, is not subject to a demurrer, although it fails to disclose a cause of action "in favor of the defendant and against a plaintiff between whom a several judgment might be had in an action." 2. In such an action, a defendant may join in his cross-petition, a cause of action for money payable to the insolvent corporation by a stockholder thereof on account of stock issued to him, with a cause of action against all the stockholders of the concern upon their statutory liability as such stockholders. 3. If the corporation is insolvent and its assets in the hands of a receiver, a creditor may, by a cross-petition, seek the enforcement of the statutory liability of the stockholders, although his claim has not been reduced to judgment. (Decided December 17, 1895.) ERROR to the Circuit Court of Lucas county. On the 23d day of January, A. D. 1890, the plaintiff in error, William Peter, together with Sarah E. Peter, Horace S. Walbridge, S. Cornell Walbridge, Michael J. Cooney and Charles R. Faben, Jr., filed in the court of common pleas of Lucas county, a petition in the words and figures following: "William Peter, Sarah E. Peter, Horace S. Walbridge, S. Cornell Walbridge, Michael J. Cooney and Charles R. Faben, Jr., plaintiffs, v. The Union Manufacturing Company, defendant.-Petition. Peter v. The Farrel Foundry & Machine Co. "Plaintiffs say that the defendant is a corporation duly organized and existing under the laws of the state of Ohio; that said corporation was organized for manufacturing and is carrying on the business of manufacturing and selling sewing machines, washing boards of various kinds, churns and flour mill machinery, and that its principal place of business is in the city of Toledo, Lucas county, Ohio; that these plaintiffs are all stockholders of said defendant corporation; that the amount of the paid up capital stock of said corporation is seven hundred and twenty-four thousand and five hundred ($724,500.00) dollars and is divided into seven thousand two hundred and forty-five (7245) shares of one hundred ($100.00) dollars each; that plaintiffs are the owners of three hundred and forty-five thousand ($345,000.00) dollars of said paid up capital stock, and are the owners of three thousand four hundred and fifty (3,450) shares thereof. "Plaintiffs further say that for no one of the three last preceding years have the net earnings of the said defendant corporation been sufficient to pay, in good faith, an annual dividend of six per centum upon the paid up capital stock of the said corporation, over and above the salaries and expenses authorized by the by-laws and regulations of the said corporation. "Plaintiffs further say that the bonded debt of said defendant corporation is one hundred thousand ($100,000.00) dollars; that said defendant corporation has, in addition, an unsecured indebtedness of about one hundred and sixty thousand ($160,000.00) dollars; that the said corporation is indebted to these plaintiffs in the sum of not less than fifty thousand ($50,000.00) dollars in the aggregate; that Peter v. The Farrel Foundry & Machine Co. a large part of said unsecured indebtedness, to-wit: the sum of not less than five thousand ($5,000.00) dollars is now due and unpaid and the entire balance of said unsecured indebtedness will become due within a period of four months from this date and at least two-thirds thereof will become due within a period of sixty (60) days from this date. "Plaintiffs further say that the said defendant corporation is wholly unable to pay the portion of said indebtedness now past due and that it will not be able to pay the balance of said indebtedness as the same matures and that said corporation is insolvent; that said corporation has a large plant situated in Toledo, Ohio, consisting of an interest in real estate factories, machinery, tools and implements; that it has been and now is engaged in its said business of manufacturing sewing machines, washboards of various kinds, churns and flour mill machinery and selling the same in said city of Toledo and elsewhere; that it has branch offices in different states and a large force of workmen engaged in said business in various capacities, that it has a large number of unfinished machines, machinery, washboards and churns on hand and also a large number of finished machines, machinery, washboards and churns on hand; that it has a considerable amount of material on hand to be used in the manufacture of such machines, machinery, washboards and churns, and in finishing said articles now unfinished, and said corporation is unable to meet its liabilities and current obligations. "Plaintiffs further say that by reason of the insolvent condition of said corporation, and by further reason of the liability of suits, the defendant corporation's property is in imminent danger of being sacrificed and its business Peter v. The Farrel Foundry & Machine Co. brought to a standstill at a great and irreparable loss to these plaintiffs and all other creditors and stockholders of the defendant corporation. "Plaintiffs further say that if said business should be suddenly suspended it would unavoidably result in a very great loss to all the creditors and stockholders of the said defendant; the finished machines, machinery, washboards and churns could not be disposed of except at great sacrifice; the unfinished machines, machinery, washboards and churns would be an almost total loss, and there would also result great loss from inability to carry out subsisting contracts for material prepared expressly for the business of said defendant and which would have practically no value if thrown upon the general market. "Plaintiffs further say that a very large part of the assets of said defendant corporation, to wit: about sixty thousand ($60,000.00) dollars consist of amounts due or to become due for machines sold on the installment plan, that is to say, machines sold to be paid for, in small weekly or monthly installments, the corporation retaining title to said machines until the purchase price is fully paid; that said accounts could not be sold unless at a very small per centum of the face value thereof, and all the outstanding accounts due or to become due to said corporation are of such a character that if the business of said corporation should be at once suspended, there would be a very great loss on said accounts result to said corporation and all if its creditors and stockholders, growing out of the inability to collect said accounts, or the great and disproportionate expense it would be necessary to ineur in collecting the same or any part thereof. |