Cantwell v. Columbia Lead Co.

• Decision Date: 19 October 1906
• Citation: 97 S.W. 167,199 Mo. 1
• Parties: CANTWELL et al. v. COLUMBIA LEAD COMPANY et al., Appellants
• Court: Missouri Supreme Court

97 S.W. 167

199 Mo. 1

CANTWELL et al. v. COLUMBIA LEAD COMPANY et al., Appellants

Supreme Court of Missouri, Division One

October 19, 1906

Appeal from Ste. Genevieve Circuit Court. -- Hon. Chas. A. Killian Judge.

Affirmed.

Martin L. Clardy, W. M. Williams and H. J. Cantwell for respondents on motion to dismiss appeal.

(1) The bill of exceptions as to all matters occurring in the St Francois Circuit Court should and must have been filed in the St. Francois Circuit Court, or with the clerk thereof, and not with the clerk of the Iron Circuit Court. Keen v Schnedler, 92 Mo. 525. (2) There is nothing before this court to review. The judgment is justified by the petition, and it may be doubted whether even the petition is properly made a part of the record which the appellants put before this court.

Judson & Green, B. Greensfelder, M. W. Huff and J. P. Cayce for appellants in opposition to respondents' motion to dismiss.

The bill of exceptions could not have been filed in St. Francois county and was properly filed in Iron county. "The transfer of the cause by change of venue took with it the whole cause, and every incident belonging thereto, to the Ralls Circuit Court, just as if the cause had originated in that court. Not a shred or patch of jurisdiction over the cause or any of its incidents was left in the Louisiana Court of Common Pleas." Ex parte Haley, 99 Mo. l. c. 152. This was in the case of a receivership and the court said that the receiver became an officer of the court to which the case was transferred. Henderson v. Henderson, 55 Mo. 534; State v. Hopper, 71 Mo. 425; Cunningham v. Current River Lumber Co., 165 Mo. 270; State ex rel. v. Lay, 128 Mo. 609.

Judson & Green, Bernard Greensfelder, M. W. Huff and J. P. Cayce for appellants on the merits.

(1) The order was irregular and void, in that no bond was required of plaintiffs, although the order was intended to operate and did operate as an injunction upon defendants in the management of their property. Appeal of Schlecht, 60 Pa. 172; Patten v. Accessory Transit Co., 4 Abb. Pr. 235; Wolfe v. Clafin, 81 Ga. 64; Fisher v. Superior Court, 110 Cal. 129; Brierfield v. Iron Works Co., 54 Ala. 622. (2) The order was irregular and improper, in that there was no equity in plaintiffs' petition, and that the differences between the plaintiffs and the majority of the stockholders of the company only related to the policy of the company and to matters lawfully within the jurisdiction of the board of directors. 2 Purdy's Beach on Corp., sec. 905; Alderson on Receivers, sec. 349; Overton v. Railroad, 10 F. 866; 5 Pomeroy's Eq. Jur. (New Ed.), sec. 117; United Securities Co. v. La. Electric Co., 68 F. 673; Miller v. Kitchen, 103 N.W. 297; New Albany Waterworks v. Louisville Banking Co., 122 F. 776; Edison v. Edison United Phonograph Co., 52 N.J.Eq. 620; Wallace v. Pierce Wallace Pub. Co., 101 Ia. 329; Am. Loan & Trust Co. v. Toledo C. & L. Co., 37 F. 416; Flukes v. Railroad, 48 Kan. 576. (3) There was no emergency whatever within the meaning of the law, warranting the appointment of a receiver. Baker v. Backus, 32 Ill. 101; Nusbaum v. Stein, 12 Md. 315; West v. Swan, 3 Edw. Ch. (N. Y.) 420; Buchanan v. Camtock, 57 Barb. 568; Alderson on Receivers, sec. 7; Clark v. National Linseed Oil Co., 105 F. 787; Hancock v. American B. & T. Co., 86 Ill.App. 630. The facts on this point are clear beyond dispute. The mine was not in operation for the reason that there was no money wherewith to operate. This had been its condition for a year previous. The bond issue had been under discussion for several months. The deed was recorded and some of the bonds delivered. No one knew these facts better than the plaintiff. (4) It appeared from the verified answer that all the allegations of mismanagement were denied. Williamson v. Monroe, 3 Cal. 383; Ins. Co. v. Grant, 3 MacArthur (D. C.) 220; Simmons v. Henderson, Freem. Ch. (Miss.) 493; 5 Pomeroy Eq. Jur. (New Ed.), secs. 66, 70; Alderson on Receivers, secs. 102, 114, 132-134; Sweeney v. Mayhew, 6 Idaho 455; Cranbie v. Order of Solan, 157 Pa. St. 588. (5) Plaintiff Cantwell himself was in no position to maintain this action against his associates in the corporate enterprise. His position is essentially unconscionable. Gas Co. v. Keiber, 5 Ill.App. 132; Harder v. Oil Co., 56 F. 57; Original Vienna Bakery v. Heissler, 50 Ill.App. 406; Ala. Coal & Coke Co. v. Shackelford, 157 Ala. 224; Thalmann v. Hoffman House, 58 N.Y.S. 227; Rothwell v. Robinson, 44 Nevins 538; Rumsey v. Detroit & McCattle Co., 116 Mich. 410; Ranger v. Cotton Compress Co., 52 F. 609; Smith on Receivership, sec. 226. (6) There was no illegality in the proposed bond issue; there is no provision of the Constitution or statutes violated, and under the law a corporation may issue its bonds at less than par. 3 Cook on Corporations, sec. 766; 3 Purdy's Beach on Corporations, 1157; Thompson on Private Corporations, 6056; Railroad v. Rust, 17 F. 273; Nelson v. Hubbard, 96 Ala. 238; Gamble v. Queens County W. Co., 123 N.Y. 99; Bank v. Railroad, 117 Cal. 332; Handley v. Stutz, 139 U.S. 428; Railroad v. Hanfield, 36 A.D. 605; Trust Company v. Irrigation Co., 79 F. 842; Farmers' Loan & Trust Co. v. Toledo & S. H. R. Co., 54 F. 772; Brown v. Railroad, 53 F. 889; Bank v. Mfg. Co., 96 N.C. 298. (7) It is immaterial whether the proposed bond issue was open to any legal objection or not, as there was no occasion for the appointment of a receiver. In any event, an injunction would have been an ample remedy, and the appointment of a receiver was an abuse of discretion. French v. Gifford, 30 Ia. 148; Brick Co. v. Robinson, 55 Md. 410; Railroad v. Duckworth, 2 Oh. Cir. Ct. 518; Etowah Mining Co. v. Wills Valley Min. & Mfg. Co., 106 Ala. 492; Alderson on Receivers, secs 7, 49; Schack v. Nickey, 97 Ill.App. 460; People's Inv. Co. v. Crawford, 45 S.W. 738; Empire Hotel Co. v. Main, 98 Ga. 176; Waterbury v. Merchants' Union En. Co., 50 Barb. 157; Laurel Springs Land Co. v. Fongeray, 50 N.J.Eq. 756; Denni v. Frankford, 205 Pa. St. 114; Freer v. Davis, 52 W.Va. 35. (8) It is fundamental that a receiver will not be appointed where it is the only relief asked. The appointment is ancillary, not the primary object of litigation. In this case no other relief was really sought. State ex rel. v. Ross, 122 Mo. 164; Supreme Sitting O. of I. H. v. Baker (Ind.), 20 L. R. A. 210; Whitney v. Bank (Miss.), 23 L. R. A. 531; Philips v. Provident Steam Engine Co. (R. I.), 45 L. R. A. 560. (9) That a corporation is not as prosperous as expected is no ground for the appointment of a receiver. Am. Tribune N. C. Co. v. Schuler (Tex.), 79 S.W. 370; Manufacturers' Land & Imp. Co. v. Cleary (Ky.), 89 S.W. 248; Hedges v. Paquet, 3 Ore. 77.

Martin L. Clardy, W. M. Williams, Moses Whybark, H. J. Cantwell and Stephen Cornelius for respondents on the merits.

(1) There is no bill of exceptions properly in the record because none was filed in the proper court or within the proper time. There is no motion to revoke in the bill of exceptions. There is no abstract filed here and no such "record" as dispenses with abstract. Railroad v. Lewiston, 97 Ind. 488; Bank v. Stoddard, 169 Mo. 74. (2) The petition states a cause of action; plaintiffs are entitled to the relief asked, and the appointment of a temporary receiver was properly made. Tourer v. Ins. Co., 180 Mo. 153; Greeley v. Bank, 103 Mo. 212; secs. 753, 1338, 1339 R. S. 1899. (3) "Where it appears that a trustee is guilty of misconduct or waste, or an improper disposition of the trust estate, or that he has an undue bias towards one of two conflicting parties, or that the estate is liable to be wasted or destroyed, a proper case is made out for the appointment of a receiver." Meeker v. Winthrop Iron Co., 17 F. 48; Miner v. Belle Isle Ice Co., 93 Mich. 97; Ponder v. N. Y. & L. E. Co., 72 Hun 385. (4) "Where there are such disputes among the board of directors of a corporation as prevent the management of its affairs, a receiver may be appointed." 23 Am. and Eng. Ency. Law (2 Ed.), 1022. (5) The answer of defendants filed in vacation at the full hearing is no part of the pleadings but was taken at the hearing as an affidavit. It is of no greater effect than Loeb's own testimony and should be in the bill of exceptions if a bill of exceptions were properly in this record. Unless this answer is in the bill of exceptions and unless the bill of exceptions is properly made part of the record, then the answer is not part of the record, even as an affidavit. The judge found against the defendants on the full hearing of all the evidence and the answer then filed cannot affect the issues in any way. (6) The petition asks for an accounting, the cancellation of the bonds, the appointment of a temporary receiver to preserve the property, a decree of dissolution of the corporation with a receiver to put the property in shape to properly liquidate its affairs. It is hard to discover where or how the appellants get authority for the statement that a receiver is the only object of this suit. (7) The proposed bond issue is in direct violation of the Constitution and statutes of Missouri. Sec. 8. article 12, Constitution; sec. 962, R. S. 1899. (8) While Cantwell's acquiescence as then president of the Columbia Lead Company, to the subscription of Langeloth being transferred to the American Metal Company, may estop him and the Columbia Lead Company from asserting that the American Metal Company is not entitled to the proceeds of such stock on dissolution of the company, yet the American Metal Company, a New York corporation, cannot under the laws of the State of Missouri exercise the powers of a stockholder in a Missouri corporation, and all of its acts and the acts of all of its agents in all the stockholders'...