Baggaley v. Pittsburg & Lake Superior Iron Co.

• Decision Date: 12 December 1898
• Docket Number: 628.
• Citation: 90 F. 636
• Parties: BAGGALEY v. PITTSBURG & LAKE SUPERIOR IRON CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

90 F. 636

BAGGALEY v. PITTSBURG & LAKE SUPERIOR IRON CO. et al.

No. 628.

United States Court of Appeals, Sixth Circuit.

December 12, 1898

This bill was filed by a stockholder to restrain his corporation its officers and directors, from selling the company's lands, and also from selling or otherwise disposing of timber standing upon its lands, unless previously authorized thereto by a vote of three-fifths of the capital stock of said company. The corporation sought to be enjoined is a mining company organized under the provisions of chapter 123, How. Ann. St. Mich. The complainant below and appellant here owns or controls and represents more than two-fifths of the stock of the company. The remainder of the stock is owned or represented by the defendants and appellees Joseph and John C. Kirkpatrick, one of who is the general manager and treasurer of the corporation and the other his assistant. The directors are five in number, three of whom were selected by the majority, or Kirkpatrick, interest, including both of themselves, and the other two were selected, under the cumulative voting system, by the appellant and his interest. Until 1889 the company owned and operated iron mines in Marquette county, Mich., and also owned large bodies of wild land in Marquette, Delta, and Menominee counties. In 1889 it made a sale of its iron mine, and since that time has conducted no sort of mining, smelting, or metal manufacturing business. The sale of the mines included some thousands of acres of its lands in the county of Marquette. The company continued, however, to be the owner of about 5,000 acres of land in Marquette county and of about 18,000 acres of wild lands in Delta and Menominee counties. All of this land seems to have been acquired as mineral land, and that still held in Marquette county is yet classed as mineral land. The lands in Delta and Menominee counties do not seem to be such, and are not now regarded or classed as, mineral lands. The bill charged that the managers and directors, through the control and domination of the Kirkpatricks, as majority shareholders were threatening to sell and dispose of the lands of the company, and were engaged regularly in selling the timber standing on said lands, particularly those within Delta and Menominee counties, and this without first obtaining the vote of three-fifths of the stockholders, and in violation of the power of the managers and directors of said company, and in violation of section 4099, How. Ann. St., which is in the following words: 'No alienation, division, sale or mortgage of any, or any part of the mine works, real estate or franchise of any corporation mentioned in the first section of this act, shall have any force or effect, or pass any title thereto, or interest therein, unless expressly authorized by the vote of three-fifths of the capital stock of said company at some meeting of the stockholders called and notified in accordance with the provisions of section nine of this act: provided, that the provisions of this section shall not apply to city or village lots, nor to land not required for mining purposes from which the timber has been removed, nor to rights of way and depot grounds for railroads, and rights of way for highways, which may be conveyed when authorized by a vote of a majority of the directors. ' Upon the pleadings and evidence the circuit court granted an injunction restraining the defendants or any of them from alienating 'any lands of the company whenever situated,' and from 'selling, cutting, or removing any of the standing timber, except for actual use in the prosecution of the business of mining,' from the lands in Marquette county, unless authorized thereto by a vote of three-fifths of the stock of said company. The court denied an injunction to restrain...