38 F. 191 (E.D.La. 1889), Le Warne v. Meyer
|Citation:||38 F. 191|
|Party Name:||LE WARNE v. MEYER et al., (HARRIS, Intervenor.)|
|Case Date:||March 14, 1889|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
About February 13, 1888, the Mexican government ceded to Gen. Pedro Beranda, under certain terms and restrictions, lottery franchises and privileges to draw lotteries in Mexico. These franchises and privileges passed by assignment, the terms of which are not known, to Gen. Beranda and associates, for the purpose of carrying out the contract, and
carrying on the lottery. The associates organized an incorporation under the public improvement law of Louisiana for the purpose of carrying on the lottery business in Mexico. The corporation was organized under the name of 'The Mexican International Improvement Company,' for the avowed purpose of constructing, operating, maintaining, promoting, and developing various works of public and private improvement in the republic of Mexico. The capital stock was fixed at $100,000, divided into 10,000 shares of $100 each, to be paid in as might be provided by the board of directors; and the board of directors were authorized to issue such portions of such stock as they thought necessary, as full-paid stock, for the purchase of property, franchises, and grants, and payment of labor done, and services performed. Immediately, upon organization, the full amount of stock was issued as full-paid stock, and divided among the associates or promoters of the enterprise. Such stock was thereafter put upon the market in New Orleans, and notoriously and openly bought and sold as Mexican Lottery stock. All the stock being issued as full-paid stock, to be given out for the purchase of the lottery privilege, it became necessary to raise by other means funds sufficient to comply with the contract of the Mexican government, and to carry on the lottery business. Thereupon a general meeting of stockholders was called in pursuance of the laws of Louisiana in such cases made and provided, for the purpose of increasing the stock. At such meeting eight-tenths of the stockholders were represented in person or by proxies. At the meeting the charter was amended so as to authorize the issue of $1,000,000 of preferred stock and $400,000 of bonds, to be subscribed and paid for on certain terms and conditions; the preferred stock so issued to be paid, as dividends, 50 per cent. of the net earnings of the company; 25 per cent. of the same being set apart to pay dividends on certain 2,500 shares of the original stock issued to certain persons; the remaining 25 per cent. of net earnings to be applied as dividends on the remaining $750,000 of original stock. When this arrangement was concluded, the ordinary stock rose rapidly in the New Orleans stock market from $5 and $6 a share to $60 and $70 a share. On the 12th of January, 1889, Benjamin F. Le Warne, a citizen of California, had transferred to him on the books of the company 100 shares of this stock. On the 14th of January he applied, through an attorney, by letter, to the...
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