Beyer v. Investors' Syndicate

• Decision Date: 26 April 1921
• Citation: 47 N.D. 358,182 N.W. 934
• Parties: BEYER v. INVESTORS' SYNDICATE et al.
• Court: North Dakota Supreme Court

47 N.D. 358

182 N.W. 934

BEYER

v.INVESTORS' SYNDICATE et al.

Supreme Court of North Dakota.

March 17, 1921.

Rehearing Denied April 26, 1921.

Syllabus by the Court.

In an equitable action in rem to impress a paramount lien in favor of a stockholder upon the lands of his corporation for moneys paid in behalf of the corporation and in connection with his stock, necessarily involving upon the allegations of the complaint equitable proceedings in personam in order to afford relief in rem, jurisdiction of the res is not secured by the filing of a verified complaint, of an affidavit for service of the summons by publication or without the state, and of a lis pendens.

For reasons stated in the opinion, it is held that the complaint, viewed as a proceeding in rem, does not state a cause of action in rem.

Section 3192, Terr. Laws 1887 (section 569, Dak. Civil Code 1877, and chapter 36, Terr. Laws 1885), providing for the appointment of a resident agent by a foreign corporation upon whom service of process might be made, was repealed by N. D. Revised Codes of 1895.

Appeal from District Court, Stark County; Crawford, Judge.

Action by John F. Beyer against the Investors' Syndicate and others. A motion to quash was sustained as if a demurrer to the complaint, and plaintiff appeals. Dismissed.Melvin A. Hildreth, of Fargo, for appellant.

Bangs, Hamilton & Bangs and W. J. Mayer, all of Grand Forks, for respondents.

Statement.

BRONSON, J.

This cause of action, like the proverbial cat with its many lives, again is presented to this court as a memorial, as it were, to show the perplexities and delays in litigation. Some 12 cases covering a period of time from 1906 to the present are to be noted wherein controversies between the parties herein are involved. These cases may be cited as follows: Beyer v. Woolpert, 99 Minn. 475, 109 N. W. 1116; U. S. Dist. Court, 1909, not reported; Investors' Syndicate v. Letts, 22 N. D. 452, 134 N. W. 317;Investors' Syndicate v. Pugh, 25 N. D. 490, 142 N. W. 919;Beyer v. Investors' Syndicate, 31 N. D. 247, 153 N. W. 476;Investors' Syndicate v. North America Coal & Min. Co., 31 N. D. 259, 153 N. W. 472;Beyer v. N. A. Coal & Min. Co., 32 N. D. 542, 156 N. W. 203;Beyer v. N. A. Coal & Min. Co., 37 N. D. 319, 163 N. W. 1061;Id., 173 N. W. 782;Id., 173 N. W. 787;Id., 175 N. W. 216.

In 1906, in the Minnesota Case cited, the plaintiff instituted a proceeding to dissolve the defendant coal company, which proceeding was dismissed. In 1909, in the federal case cited, the court dismissed the petition of the plaintiff herein to set aside the Dana mortgage of $500 assigned to the defendant Investors' Syndicate by the coal company upon grounds of fraud. In 1911 this court (22 N. D. 452, 134 N. W. 317), upheld the right of the Investors' Syndicate to foreclose this mortgage, as against the personal claim of the plaintiff herein, as intervener in such action, to defeat such foreclosure upon the ground that he was the owner of such mortgage. In that action the decision of the federal court was held to be res judicata concerning the mortgage. In 1913 this court (25 N. D. 490, 142 N. W. 919) affirmed a bill of costs for the foreclosure of such mortgage. In 1915 this court (31 N. D. 247, 153 N. W. 476), in an action brought by the plaintiff, Beyer, to determine adverse claims to three quarter sections of the coal company's lands, held that Beyer was entitled to a lien upon such lands for taxes that he had paid thereon. In 1915 again this court (31 N. D. 259, 153 N. W. 472), in an action brought by the defendant Investors' Syndicate to foreclose a mortgage given by the coal company upon the three quarter sections of land, held that, the plaintiff, Beyer, appearing as intervener, and representing the minority stockholders, the corporation having defaulted in appearance, such mortgage was fictitious, and therefore void. In 1916 this court (32 N. D. 542, 156 N. W. 204), upon a demurrer to a complaint by Beyer, representing the minority stockholders, to enjoin the foreclosure of the Dana mortgage by the Investors' Syndicate, held that the complaint stated a cause of action, and that the plea of res judicata was not available against Beyer, because he represented minority stockholders. In 1916 again this court (32 N. D. 560, 156 N. W. 203), affirmed an order of the district court setting aside a sale made upon the judgment rendered in the action to determine adverse claims (31 N. D. 247, 153 N. W. 476), by reason of a misdescription therein. In 1917 this court (37 N. D. 319, 163 N. W. 1061) sustained a demurrer to the answers interposed to the complaint of Beyer seeking to enjoin the foreclosure of the Dana mortgage. 32 N. D. 542, 156 N. W. 204. In 1919 this court (173 N. W. 782) held that upon the foreclosure sale of the Beyer judgment for a lien for taxes, etc., as rendered in the adverse claims action, the Investors' Syndicate could not redeem by reason of their mortgage upon the coal land; that such mortgages were null, and the redemption made by the Investors' Syndicate was for the benefit of the coal company. In 1919 again this court (173 N. W. 787) simply held that the trial court did not err in amending its judgment to conform to its order for judgment in the action mentioned in 31 N. D. 247, 153 N. W. 476. In 1919 again (175 N. W. 216) the same judgment under consideration in 173 N. W. 782, was involved. The court held that equity had the power to impose a lien upon the assets of the coal corporation for the costs and expenses of Beyer, incurred in his efforts to save and protect the assets of the coal company. Accordingly the judgment of Beyer for approximately $6,000 as a lien upon the three quarter sections of the coal company's land was upheld.

In March, 1920, plaintiff filed a notice of lis pendens in Stark county claiming a lien for $4,000 upon the three quarter sections mentioned, and therein giving notice of the commencement of an action to impress such land with a lien for such amount prior to any claims or demands of the defendants. Plaintiff also filed in the district court an affidavit which states that plaintiff and the defendants are all nonresidents, and that personal service of the summons cannot be made, with the possible exception of the coal company, which has a resident agent at Dickinson. After the filing of the complaint the summons and complaint in this action were served upon one Folsom, as the agent of the coal company, in Stark county, and upon all of the other defendants by personal service without the state excepting the defendant Cooperative Company, which, as a corporation, has ceased to exist. In June, 1920, the defendants, upon notice, appeared specially and moved the trial court for an order quashing and setting aside the attempted service of the summons on the ground that the same was abortive, null, and void. Upon the hearing of this motion, the trial court did not deem it necessary to pass upon the sufficiency of the service, but held that the complaint did not state facts sufficient to constitute a cause of action, and sustained the motion as if a demurrer to the complaint, with leave to the plaintiff within 30 days to plead over. From such order the plaintiff has appealed.

In the record it appears that the coal company in August, 1895, certified that Mr. Folsom was appointed as its agent and was authorized to accept service of processes on behalf of the coal company. This certificate was then filed with the Secretary of State. Mr. Folsom in an affidavit states that he was informed some 20 or 25 years ago that it was necessary for the coal company to have a local agent in Stark county upon whom a process might be served; that he informed Mr. Williams that he would accept such appointment; that he never received any appointment or authority to act as agent for the corporation; that he does not know the post office address of such coal company, and he has never notified them of the service of any papers that has been made upon him. The attorney for the plaintiff submitted an affidavit to the effect that in the litigation during the years past he has always served upon Mr. Folsom as the resident agent of the coal company.

The complaint in this action is long, covering some 14 typewritten pages. It recites many of the facts that have heretofore been stated in the opinions of this court. The Co-operative Company is joined as defendant, but the allegation is that it has no corporate standing; that it has neither a body to be kicked nor a soul to be damned. It alleges that none of the stockholders of the coal company have ever paid anything into the treasury of the company excepting the plaintiff; upon information and belief, that the Investors' Syndicate and Tappen have acquired and control the majority of the coal company's stock. It recites the conspiracy of the defendants to place bogus mortgages and liens upon the lands of the coal company and to cheat this plaintiff out of any interest in such lands, and the efforts of the plaintiff through litigation in the courts of this state, resulting in the frustration of the defendants' schemes. It alleges that the corporate life of the coal company expires August 7, 1925; that the plaintiff is the owner of 400 shares of stock therein of the par value of $25 each; that no meetings of the stockholders or directors have been held since March 20, 1899; that the assets of the coal company consist of its interest in four quarter sections of land in Stark county and the right to compel the stockholders to pay into court the sum of their respective shares and to be assessed by this court for an assessment to pay the debts of the coal company; that large quantities of coal are situated upon the lands; they might have been developed, made remunerative, and paid dividends, but no coal has been mined and no income produced therefrom; that the officers of the coal company have never accounted for the sale of approximately $40,000...