Central Trust Co. of New York v. Virginia, T. & C. Steel & Iron Co.

• Decision Date: 11 May 1893
• Citation: 55 F. 769
• Parties: CENTRAL TRUST CO. OF NEW YORK v. VIRGINIA, T. & C. STEEL & IRON CO.
• Court: U.S. Court of Appeals — Fourth Circuit

55 F. 769

CENTRAL TRUST CO. OF NEW YORK v. VIRGINIA, T. & C. STEEL & IRON CO.

United States Circuit Court, W.D. Virginia.

May 11, 1893

Statement by PAUL, District Judge:

This is a sit in equity, brought by the complainant company, the Central Trust Company of New York, a corporation created by and existing under the laws of the state of New York, and a citizen and resident of said state of New York, against the defendant company, the Virginia, Tennessee & Carolina Steel &amp Iron Company, a corporation created by and existing under the laws of the state of New Jersey, and a citizen and resident of said state of New Jersey.

On the 8th day of August, 1892, the complainant company presented its bill to Hon. Hugh . Bond, circuit judge of this court praying for the appointment of a receiver to take charge of the lands and all other assets of the defendant company. It alleged the insolvency of the defendant company, as evidenced by a judgment obtained against it on the same day in this court on its law side, at Abingdon, by confession, on which judgment an execution had issued on the same day, and been returned on the same day nulla bona. The defendant company appeared by its president, John C. Haskell, and consented to the appointment of a receiver, and thereupon Judge Bond made an order appointing said John C. Haskell and D. H. Conklin receivers of said defendant company.

On the same day two other bills were presented to Judge Bond in suits styled as follows, to wit: 'The Central Trust Company of New York v. The So. Atlantic & Ohio Railroad Co. In equity;' and 'The Va., Tenn. & Car. Steel and Iron Co. v. The Bristol Land Company. In equity. ' In each of said bills the complainant company alleged the insolvency of the defendant company, as evidenced by a judgment obtained against it on the same day in this court, on its law side, at Abingdon, by confession; on which judgment an execution had issued one same day, and been returned on the same day nulla bona. In the first-named of these two suits the defendant company appeared by its vice president, John C. Haskell, and consented that a receiver should be appointed, and in the last-named the defendant company appeared by its president John C. Haskell, and consented that a receiver should be appointed; and thereupon Judge Bond appointed said John C Haskell and D. H. Conklin receivers of each of said defendant companies, respectively.

On the 19th day of October, 1892, a petition was presented to this court by William McGeorge and others, claiming to be stockholders and creditors of the Virginia, Tennessee & Carolina Steel & Iron Company, and John M. Bailey, claiming to be 'the valid receiver' of the corporations named by virtue of an order made by Hon. D. W. Bolen, judge of the fifteenth judicial circuit of Virginia, in vacation, on the 6th day of August, 1890, asking that they be made parties, complainants or defendants, as the court in its discretion might determine, and asking that the several causes named be consolidated, and heard together. In said petition it is alleged that the Virginia, Tennessee & Carolina Steel & Iron Company is the main and substantial company of the companies named; that the other companies, the South Atlantic & Ohio Railroad Company and the Bristol Land Company, are mere offshoots or dependent corporations, created and built up by a diversion of the property and assets of the Virginia, Tennessee & Carolina Steel & Iron Company for such purpose; that practically they are all one company. And the petition further alleges that the several confessions of judgment, referred to as having been made on the 8th day of August, 1892, in this court, on its law side, at Abingdon, were made by a person who had no power or authority to make such confessions of judgment; that said judgments were of the complainant and defendant companies; and that the orders awarded by Judge Bond appointing receivers for each of said defendant companies were obtained by misrepresentation, fraud, and collusion by and between said representatives of the complainant and defendant companies, respectively.

The said petition also alleges that in the cause of the Central Trust Company of New York v. the Virginia, Tennessee & Carolina Steel & Iron Company the court is without jurisdiction, the complainant company being a corporation created by and existing under the laws of the state of New York, and a citizen and resident of the state of New York, and the defendant company a corporation created by and existing under the laws of the state of New Jersey, and a citizen and resident of said state of New Jersey. The said petition was filed by leave of the court, and a rule awarded returnable at Harrisonburg on the 6th day of December, 1892.

The complainant company, the Central Trust Company of New York, has filed an elaborate answer to said petition, denying under oath all the material allegations therein. The defendant company, the Virginia, Tennessee & Carolina Steel & Iron Company, also has filed its separate answer to said petition, denying under oath all the material allegations therein; denying that the funds and assets of the Virginia, Tennessee & Carolina Steel & Iron Company have been diverted and used in the interests of the other corporations named; that there has been any intermingling or confusion of the assets of the several corporations in question, but asserting that they are several distinct, and independent corporations. that their officers are different, and that the business of the said several companies has been carried on separately and distinctly. The other two defendant companies, the South Atlantic & Ohio Railroad Company and the Bristol Land Company, also John C. Haskell and D. H. Conklin, have also filed their separate answers to said petition, and adopt as the greater part of their answers the answer of the Virginia, Tennessee & Carolina Steel & Iron Company.

R. A. Ayres, J. B. Richmond, Adrian H. Joline, and Henry W. Calhoun (Butler, Hillman & Hubbard and Henry Crawford, on the brief,) for complainant.

Blair & Blair and A. H. Blanchard, (Richard C. Dale and Geo. H. Towle, on the brief,) for petitioner.

PAUL, District Judge, (after stating the facts as above.)

The foregoing statement of the facts presents the questions involved in such a confused and unsatisfactory condition as to require the court to separate the several matters at issue, and consider them in their respective relations to the several causes. The causes are certainly not such, in their present condition, as can be consolidated and heard together. The interests involved in the several suits pertain to separate and distinct corporations, as far as the same appear from the record. The parties are different. The complainant in one of the causes appears as defendant in another of the causes; and the complainant in the two other causes brings suits against separate and distinct defendants in each of said causes. It is true that the petitioners for intervention have asked the court to consolidate all these causes and hear them together, and in the pleadings the counsel for said petitioners seem to have assumed that the causes have been consolidated. But this is anticipating the court, and is an assumption, in advance of the court's consideration of the question, that the court would decide as requested. In the condition of the record, and in view of the weight of authorities on the question, the court must decline to consolidate these causes, because it does not appear to the court that it would be reasonable to do so. Rev. St. U.S. Sec. 921; Conk. Treatise, (5th Ed.) 385.

The cause of the Central Trust Company of New York v. the Virginia, Tennessee & Carolina Steel & Iron Company being the only one of these...