Jacob Pfohl, Respondent v. Arthur B. Simpson, Impleaded

Summary

The New York Court of Appeals affirmed the lower court, holding that an equity court has jurisdiction to hear a single suit that consolidates the claims of multiple creditors against the stockholders of a bankrupt corporation and to issue a perpetual injunction restraining separate actions. The statutory provision that stockholders are severally liable does not bar such equitable jurisdiction, but the court may only allocate each stockholder’s liability among creditors proportionally and may not transfer a creditor’s individual right to another creditor lacking that right.