Bimber v. Calivada Colonization Co.
| Decision Date | 06 July 1901 |
| Docket Number | 28. |
| Citation | 110 F. 58 |
| Parties | BIMBER v. CALIVADA COLONIZATION CO. et al. |
| Court | U.S. District Court — Western District of Pennsylvania |
J. H McCreery, for G. L. Bimber.
Frank W. Smith, for M. D. Hays.
The Calivada Colonization Company, one of the defendants, a corporation of the state of Colorado, was organized on March 13, 1895, and on that day elected a board of directors; M. D Hays, a defendant here, being elected a member and president of the board. On the same day (March 13, 1895) the board of directors adopted the following resolution, which was entered upon the minute book of the company:
'Resolved that the board of directors of the Calivada Colonization Company, in consideration of the services, efforts, and information acquired and money expended by M. D. Hays in behalf of the company, hereby directs the issue to him of 126,000 shares of the capital stock, at the par value of one dollar each, in compensation therefor.'
Soon thereafter M. D. Hays was credited on the stock books of the company with 126,000 shares of full-paid and nonassessable stock, and certificates therefor were issued. At the annual meeting of the stockholders of the company held on March 17, 1896, as appears from the minute book of the company, the following resolution was adopted:
This suit was brought on October 30, 1900, by G. L. Bimber, the owner of 200 shares of the stock of said company, each of the value at par of one dollar. The bill does not state, nor does it otherwise appear, when he became the owner of these shares of stock, but it was certainly after the transactions of which he complains in his bill. On January 2, 1901, F. C. Kohne intervened as a plaintiff herein. He is the owner of 2,600 shares of the stock of said company, each of the value at par of one dollar. He became such owner on July 2, 1896, after the transactions complained of in the bill. The defendants in the bill are the Calivada Colonization Company, A. C. Hays, its receiver, the said M. D. Hays, and a large number of persons who are holders of shares of the above-mentioned stock issue of 126,000 shares, most or all of whom are transferees of said M. D. Hays. The whole capital stock of the company consists of 250,000 shares. The bill alleged that the resolution of the board of directors of March 13, 1895, and the issue of stock thereunder, were without consideration and fraudulent, and also were ultra vires; and the purpose of the bill is to annul this action of the board of directors as fraudulent, and to avoid the entire issue of 126,000 shares of stock to M. D. Hays in his hands, and in the hands of those holding under him. The main prayers of the bill are that the court decree 'that each and every share of said stock aggregating 126,000...
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