Central Trust Co. v. South Atlantic & O.R. Co.

• Decision Date: 21 July 1893
• Docket Number: 182.,180
• Parties: CENTRAL TRUST CO. OF NEW YORK v. SOUTH ATLANTIC & O. R. CO. VIRGINIA, T. & C. STEEL & IRON CO. v. BRISTOL LAND CO.
• Court: U.S. Court of Appeals — Fourth Circuit

57 F. 3

CENTRAL TRUST CO. OF NEW YORK v. SOUTH ATLANTIC & O. R. CO.

VIRGINIA, T. & C. STEEL & IRON CO. v. BRISTOL LAND CO.

Nos. 180, 182.

United States Circuit Court, W.D. Virginia.

July 21, 1893

R. A Ayers and Butler, Stillman & Hubbard, for complainant Central Trust Co.

Jas. B Richmond, for defendants South Atlantic & O. R. Co., Bristol Land Co., and Virginia T. & C. Steel & Iron Co.

Frank S. Flair, for McGeorge and others.

PAUL District Judge.

The first named of these suits is brought by the complainant company the Central Trust Company of New York, a corporation created by and existing under the laws of the state of New York, against the South Atlantic & Ohio Railroad Company, a corporation created by and existing under the laws of the state of Virginia, and a citizen and resident of said state of Virginia, and of the western district of Virginia; and the second named brought by the complainant company the Virginia Tennessee & Carolina Steel & Iron Company, a corporation created by and existing under the laws of the state of New Jersey, and a citizen and resident of the said state of New Jersey, against the Bristol Land Company, a corporation created by and existing under the laws of the state of Virginia, and a citizen and resident of said state of Virginia.

Substantially the same facts exist in these causes as were presented in the cause of Central Trust Co. of New York v. Virginia, T. & C Steel & Iron Co., which was dismissed at the May term, last, of this court, at Abingdon, Va., for want of jurisdiction. 55 F. 769. On the 8th day of August, 1892, the Central Trust Company of New York presented its bill in the above-named cause to Hon. Hugh L. Bond, circuit judge of this court, and on the same day the defendant companies in this cause presented to him their respective bills. In each of said bills the complainant company alleged the insolvency of the defendant company, as evidenced by a judgment by confession obtained against it on the same day in this court, on its law side, at Abingdon, Va., on which judgment an execution had issued on the same day, and had been returned on the same day nulla bona. In the first named of these two suits the defendant company appeared by its vice president, John C. Haskell, and consented that a receiver should be appointed, and in the last named the defendant company appeared by its president, John C. Haskell, and consented that a receiver should be appointed; and thereupon Judge Bond appointed said John C. Haskell and D. H. Conklin receivers of each of said defendant companies, respectively.

On the 19th day of October, 1892, a petition was presented to the court by William McGeorge and others, claiming to be stockholders and creditors of the Virginia, Tennessee & Carolina Steel & Iron Company, and John M. Bailey, claiming to be the receiver of the several corporations named by virtue of an order made by Hon. D. W. Bolen, judge of the fifteenth judicial circuit of Virginia, in vacation, on the 6th day of August, 1890, and asking that they be made parties complainants or defendants, as the court, in its discretion, might determine, and asking that the several causes named be consolidated, and heard together. In said petition it is alleged that the Virginia, Tennessee & Carolina Steel & Iron Company is the main and substantial company of the companies named; that the other companies--the South Atlantic & Ohio Railroad Company and the Bristol Land Company--are mere offshoots or dependent corporations, created and built up by a diversion of the property and assets of the Virginia, Tennessee & Carolina Steel & Iron Company for such purpose; that practically they are all one company. And the petition further alleges that the several confessions of judgment referred to as having been made on the 8th day of August, 1892, in this court, on its law side, at Abingdon, were made by a person who had no power or authority to make such confessions of judgments; that said judgments were procured by fraud and collusion between the representatives, respectively, of the complainant and the defendant companies; and that the orders awarded by Judge Bond, appointing receivers for each of said defendant companies, were obtained by misrepresentation, fraud, and collusion by and between said representatives of the complainant and the defendant companies, respectively. At the May term of this court last, at Abingdon, Va., these causes were consolidated and continued, with leave to the petitioners to amend their petitions. Amended petitions have now been filed by the petitioners; and demurrers to said amended petitions have been entered by the complainant companies, who have also filed their answers to the same. These causes, as stated, having been consolidated, will be considered together.

The court being satisfied that the petitioners have the right to intervene in this cause, the demurrers will be overruled. Fost. Fed. Pr. § 201.

In determining these causes, the court deems it unnecessary to consider any of the many questions raised in the petition of William McGeorge and others, and the answers filed thereto, except that relating to the appointment of John C. Haskell and D. H. Conklin as receivers of the defendant companies by the circuit judge of this court. This question is paramount because it is alleged in the petition and proven by the evidence that, at the time said Haskell and Conklin were so appointed as such receivers, the state circuit court of Washington county, Va., had already, more than two years previously, assumed jurisdiction over the subject-matter of this contention, and had appointed a receiver for the defendant companies in this suit.

Among the exhibits filed is the following order of Hon. D. W. Bolen, a circuit judge of the state of Virginia, to wit:

'Virginia.

'In Vacation. Before Hon. D. W. Bolen, Judge of the Fifteenth Judicial Circuit, Sitting During the Indisposition of Hon. John A. Kelly, Judge of the Sixteenth Judicial Circuit.

'Jonas Wilder and als., C'm'p'ts, v. Virginia, Tennessee & Carolina Steel and Iron Company, D'f'ts. In Ch'nc'y.

'Upon presentation and reading of the bill of complaint, verified by the affidavits of Jonas Wilder, Wm. G. Sheen, John M. Bailey, and A. H. Blanchard, the exhibits therewith filed, and the affidavits of John R. Dickey, J. F. Hicks, Jonas Wilder, W. G. Sheen, A. J. Wilcox, J. H. Fleenor, J. L. Burson, F. N. Hash, W. F. Aldrich, A. A. Hobson, V. Keebler, M. J. Drake, John H. Dishner, F. W. Aldridge, John M. Bailey, (Nos. 1, 2, 3, and 4,) J. H. Winston, Jr., and upon motion of complainant for an order for an injunction and the appointment of a receiver upon consideration of all which it is adjudged and ordered that upon the complainants, or some one of them, or some one for them, executing bond with good security before the clerk of the circuit court of Washington county, in the penalty of $500.00, conditioned according to law for the payment of all such damages as may be incurred, and all such costs as may be awarded in case this injunction shall be dissolved, an injunction is awarded, according to the prayer of the bill, to be directed unto the Virginia, Tennessee and Carolina Steel and Iron Company, its officers, agents, and employes, restraining it and them, and each of them, from collecting any money due it; from selling, mortgaging, removing, interfering with, or in any way disposing of, its property, or creating or incurring any liabilities upon the property of said company. And said injunction also to be directed to the defendants F. W. Huidekoper, John H. Inman, A. H. Bronson, George S. Scott, Nathaniel Thayer, H. C. Fahnestock, George Blogden, W. G. Oakman, N. Baxter, Jr., A. M. Shook, F. D. Carley, E. A. Adams, R. A. Ayers, C. L. James, J. C. Haskell, William P. Clyde, Exstine Norton, restraining them, and each of them, from acting or assuming to act as directors of said Virginia, Tennessee and Carolina Steel and Iron Company, and from in any way transacting business in the name of, or in behalf of, the company, and from any interfering with any of the property of the company; also, restraining them from releasing or attempting to release any subscriber to the capital stock of said company from any liability on account of such subscription to the capital stock of said company. And said injunction also be directed to the Bailey Construction Company, Bristol Land Company, and the South Atlantic and Ohio Railway Company, their agents, officers, or employes, and each and all of them, restraining them, and each of them, from collecting any money, incurring any liabilities, or in any way interfering with the property or business of the South Atlantic and Ohio Railway Company, Bailey Construction Company, Bristol Land Company, until the further order of court or judge in vacation. And as incident to the injunction, and for the purpose of preserving the property affected thereby, and for the purpose of protecting the rights and interests of all parties in interest, it is ordered and decreed that, upon the injunction herein allowed, being perfected, that John M. Bailey be, and he is hereby, appointed a receiver in this case, and as such receiver will take charge and possession of the property and assets of the Virginia, Tennessee and Carolina Steel and Iron Company, and of the Bailey Construction Company, of the South Atlantic and Ohio Railroad Company, and of the Bristol Land Company, and manage, operate, and control the same, and collect all money due to either of said corporations; and

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