Boyd v. Hankinson

• Decision Date: 07 February 1899
• Docket Number: 274.
• Citation: 92 F. 49
• Parties: BOYD et al. v. HANKINSON et al.
• Court: U.S. Court of Appeals — Fourth Circuit

92 F. 49

BOYD et al. v. HANKINSON et al.

No. 274.

United States Court of Appeals, Fourth Circuit.

February 7, 1899

William H. Fleming, for appellants.

D. S Henderson, for appellees.

Before GOFF, Circuit Judge, and PAUL and WADDILL, District Judges.

GOFF Circuit Judge.

The complainants below, citizens of the states of Pennsylvania and Delaware, filed their bill in equity in the circuit court of the United States for the district of South Carolina against the defendants below, who were citizens of that state. The complainants sued as stockholders and creditors of the Southern Pine Fiber Company, a corporation chartered by the state of New Jersey, and doing business in the state of South Carolina. It was alleged in the bill of complaint: That the Southern Pine Fiber Company was the owner of three acres of land situated in North Augusta, Aiken county, S.C., with the buildings thereon, and certain machinery and other personal property placed therein. That the charter of said company had on May 4, 1897, been declared forfeited and void by the governor of New Jersey, as provided by the laws of that state. That on March 5, 1897, said company, acting through William H. Castle, its treasurer, had offered, in writing, to sell the said property, real and personal, to the Hankinson Lumber Company, for the sum of $5,000, of which $1,000 was to be paid in cash, and the residue in four annual payments of $1,000 each, with interest; the title to said property to remain in said company until paid for, and a bond for title to be made to the purchaser; the offer to be subject to the approval of the stockholders, and to be accepted or rejected within 10 days from March 5, 1897. That on May 20, 1897, one J. L. Hankinson wrote to said treasurer saying, among other things:

'We have persuaded my father, Luther H. Hankinson, who is interested with us, to buy the Pine Fiber property; and he authorizes me to make you an offer of $4,500, of which $1,000 will be cash, and the bal. in four equal installments, with interest; terms same as option. Kindly give this your prompt attention.'

That on May 24th such offer was declined by said company. That on June 7, 1897, luther H. Hankinson, through his agent, J. L Hankinson, accepted said offer of sale, in writing, in the following words:

'My father has decided to purchase the Pine Fiber property at $5,000, on the terms and conditions named in your letters to me, viz. $1,000 cash; balance, equal payments, in one, two, three, and four years, with interest. This purchase to cover everything except the machinery used in the manufacture of pine fiber, such machinery being now stored subject to your order. Have papers prepared in the name of L. H. Hankinson, and send same to Mr. Jackson, or any one in Augusta, and the notes will be signed, and check given, upon delivery of your bond for titles.'

That thereafter, in July, 1897, it was ascertained that the charter of said company had been forfeited, and that it was then agreed by those representing said company and said Luther H. Hankinson that a proper and better title could be secured to said property by having the same sold under certain judgments held by and in the name of said William H. Castle, which had been rendered some years prior thereto, by the court of common pleas of Aiken county, S.C., and that in accordance with such understanding, and for the purpose of perfecting the title so as to carry out the said contract, executions were levied upon the property, and it was advertised to be sold on the 4th of October, 1897, at which sale it was intended that Castle should purchase the property, and then convey it to Hankinson for the sum of $5,000, the sole object of such public sale being to perfect the title. That, in an effort to carry out in good faith the contract of sale, Castle on September 13, 1887, wrote the son and agent of Luther H. Hankinson as follows:

'Messrs. Fleming & Alexander notify me that the sheriff will sell the mill property on the first Monday in October next. I have instructed them to bid up, if necessary, to the amount we agreed to sell to you. Will you also look after the matter? I am in hopes that it will be knocked down at a less figure, so as to save sheriff's costs. As soon as the property stands in my name, I will transfer it to your father,-- as soon as proper papers are prepared.'

That Castle instructed said firm (Fleming & Alexander) to bid for him to the amount of $5,000, if necessary, but that the member of the same who had given the matter attention was absent, and the instructions were overlooked by the partner who was then in charge, he thinking that he was only to bid to cover the amount of the executions levied on the property; and, as he believed that there would be no opposition bids (it being generally known that the sale was being made simply to perfect the title), he instructed his representative to attend the sale, and bid to the amount due on said executions,-- a sum between $1,800 and $1,900. That there were but two bidders at the sale, the said Luther H. Hankinson and the representative of Fleming & Alexander, who in fact was representing said Castle, and that, as such representative only bid to the amount of said executions, the property was sold by the sheriff (the defendant Alderman) to said Hankinson for $2,000, which was paid for him to the sheriff, who made such purchaser a deed for the property, and that he is now in the possession of the same. That, on the afternoon of the day of the sale, Fleming & Alexander communicated with the purchaser, advising him of the written instructions which had been sent them by Castle, and expressing the hope that the purchase had been made by him (Hankinson) for the purpose of carrying out the contract with Castle, but that said purchaser refused to carry it out, and stated that he had bought the property in his own name, and would continue to hold it for his own use. That said Castle has never accepted the proceeds of such sale, which are still in the hands of the sheriff. Complainants prayed that a receiver be appointed to take charge of the assets of the Southern Pine Fiber Company, and sell the same, under the directions of the court, the proceeds to be distributed, as should be found proper, among the complainants and other creditors and the stockholders of such defunct corporation; that the deed from the sheriff to Luther H. Hankinson be declared void, and be canceled; that, should such deed not be canceled, then Hankinson be required to carry out his contract, and pay over to the proper parties the further sum of $3,000, which he had so agreed to pay,-- and for such other and further relief as would be proper under the circumstances.

When the bill, which was duly verified, was presented to the court, an order was passed, on the 29th day of October, 1897 appointing a receiver as prayed for, directing him to take charge of the property, and investing him with the powers usual under such proceedings. Such order also directed said defendant Luther H. Hankinson to show cause why a perpetual injunction should not issue against him, restraining him from setting up any title to the...