Chicago Hansom Cab Co. v. Yerkes

• Decision Date: 24 March 1892
• Citation: 30 N.E. 667,141 Ill. 320
• Parties: CHICAGO HANSOM CAB CO. et al. v. YERKES.
• Court: Illinois Supreme Court

141 Ill. 320

30 N.E. 667

CHICAGO HANSOM CAB CO. et al.

v.YERKES.¹

Supreme Court of Illinois.

March 24, 1892.

Appeal from circuit court, Cook county; LORIN C. COLLINS, Judge.

Bill by Charles T. Yerkes against the Chicago Hansom Cab Company, Warren Springer, Rose Abernethy, and others, to set aside a conveyance, and for an injunction and the appointment of a receiver. Complainant filed a supplemental bill to wind up the affairs of the cab company. Complainant obtained a decree, and Springer and Abernethy appeal. Affirmed.Miller, Starr & Leman, for appellants.

Goudy, Green & Goudy, for appellee.

The other facts fully appear in the following statement by SCHOLFIELD, J.:

Charles T. Yerkes, a stockholder of the Chicago Hansom Cab Company, filed his bill in chancery in the Cook circuit court against that company, Warren Springer, Rose Abernethy, and others, to have a sale and conveyance of real estate and personal property of the company to said Rose Abernethy declared void and set aside, and for an injunction and the appointment of a receiver. A temporary injunction was issued, and a receiver appointed, as prayed. Answers were filed to the bill, putting in issue its material allegations. By consent of parties before the hearing the receiver was directed by the court to inventory the personal property, an appraiser was appointed to assess the value of the personal property, and it was further dercreed that the property should thereafter be turned over to Rose Abernethy, upon her giving bond, all of which was done. Upon final hearing, Yerkes filed, by consent of court, a supplemental bill to wind up the corporation and sell the real estate, apply the proceeds to the payment of the corporate debts, and distribute any surplus there might be after such payment among the stockholders. The court decreed as prayed in the original and supplemental bills, and Springer and Abernethy appeal from that decree. The facts deemed material to the questions discussed in the opinion are, in brief, these:

The Chicago Hansom Cab Company was organized in 1884, under the general law, as a corporation, for the purpose of carrying on the business of transportation of persons and property by hansom cabs, and other vehicles drawn by animals, in Cook county, and carried on this business from the time of its organization until in 1889. Its capital stock was $100,000, divided into 1,000 shares of $100 each. It acquired the real estate in controversy for a cab barn, soon after its organization, and immediately thereafter erected a cab barn thereon; and it acquired the cabs, horses, harness, and other personal property now in controversy, for the transaction of its business, as that business, from time to time, required. The business of the company proved unprofitable. The company became largely indebted, some portion of which was reduced to judgment, and other portions of it were secured by mortgage upon the company's property. All of the stockholders were in favor of closing up the affairs of the corporation. A meeting of the stockholders was called at the instance of Yerkes for the 13th of April, 1889, to consider the feasibility of selling off the property and closing out the business of the company. At that meeting, Yerkes was instructed by resolution to consult with an attorney as to the proper and legal way to close the business of the company, and to report to an adjourned meeting at 2:30 P. M., on the then following Monday, (April 15, 1889;) and it is proved that at that time Yerkes requested Needham to inform all of the stockholders that he would sell his stock, or purchase the stock of the other stockholders, for 35 cents on the dollar. On the evening of the 13th of April, 1889, C. A. Needham commenced negotiations with Warren Springer, as Needham testified, first informing him that he had a speculation which he thought would pay, which resulted in their entering into the following agreement in writing before the meeting of the stockholders at the adjourned meeting on the 15th of April, namely: ‘This agreement, made April 15, 1889, between Warren Springer, party of first part, and Charles A. Needham, party of second part, witnesseth, that said parties mutually agree to purchase the stock of the Chicago Hansom Cab Company, and thus obtain control of its property, real and personal, and then to pay the debts of, and wind up the affairs of, the said company, and divide the property of the same as hereinafter provided. To accomplish this, said first party agrees to furnish the sum of $60,000 to purchase said stock and pay the debts of said company, $35,000 to purchase the stock of said company, and $20,000 to pay the debts of said company, except two judgments,-one in favor of Sophia Havlick, for the sum of $3,500, and one in favor of John McCarthy, for the sum of $1,500,-and to pay said judgments, in case they or either of them shall be affirmed, with interest. Second party agrees to furnish the money required to pay all of the debts of said company, and to purchase the stock of the same, except that above agreed to be furnished by first party. It is further agreed that said stock shall be bought in the name of _____, and duly and legally transferred to the said first party, to be held by him, as security for the money advanced by him to purchase said stock and pay said debts, till the division of said property as hereinafter provided. When said stock shall have been all acquired, and said debts paid, as aforesaid, it is mutually agreed that the real estate belonging to said company, consising of 75 feet front on Clinton street by 150 feet deep, and now occupied as the barn and office of said company, shall be deeded to the party of the first part, free and clear, of all liens and incumbrances except the judgments above mentioned, and that all the personal property now belonging to said company shall be legally and properly transferred to said second party. It is mutually agreed that said Needham shall have the right to carry the appeals already taken from said judgments to the appellate courts or supreme courts, if he shall see fit so to do; he agreeing to pay all costs and expenses of the same. In case said judgments, one or both, shall be affirmed, the said first party agrees to pay the same, with interest; but if either one or both shall be defeated, and said company saved from liability on account of the same, then the amount saved shall be divided equally between the parties hereto, the expense from this time being first paid by said Needham. Said second party agrees that, at the time said personal property is transferred to him, be will make, execute, and deliver to the said first party his three notes for $5,000 each, payable on or before 8, 16, and 24 months after date, and as a part of the purchase price of said personal property, and payment for the aid given by said first to said second party in settling the affairs of said company; said second party agrees that, if said notes of $5,000 are not paid within those dates, he will pay to said first party the sum of 1 1/2 per cent. per month upon the amount unpaid as liquidated damages. Said second party agrees also to make, execute, acknowledge, and deliver to said first party, to secure his said notes and agreement, a chattel mortgage upon the entire amount of said personal property, and to insure the same in the sum of $15,000 for the benefit of said first party, and keep the same so insured until the said notes are paid. It is mutually agreed that said second party shall have the bills receivable, cash on hand, and the earnings of said company until said property shall be divided, and that he shall have the right to sell 50 hansom cabs, 20 harnesses, and 40 horses, for such prices and upon such terms as he shall see fit; said Needham agreeing to turn over the avails of said sale, except the sum of $2,500, to the said first party, to apply on said notes. Said Needham guaranties that the debts of said company do not exceed $23,000, exclusive of said judgments. Until said personal property is transferred, said second party is to pay said first party the sum of 300 dollars per month for rent of said real estate from date hereof.’ This was signed and sealed by Springer and Needham.

Before the making of this contract the stock of the company was owned as follows: Charles T. Yerkes, 375 shares; A. B. Pullman, 265 shares; William M. Van Nortwick, 100 shares; Edward Leger, 30 shares; George L. Dunlap, 100 shares; N. L. Jones, 50 shares; J. W. Cotton, 60 shares; Walter Flagg, 5 shares; Anderson, 5 shares; J. N. Cutler, 10 shares. At the time the stockholders' meeting was held, on the 15th of April, Needham had bought up all the certificates of shares of stock, except those standing in the names of Yerkes and Pullman, having paid Springer's money therefor; and Pullman had at that time given Springer an option for the purchase of his stock at 35 cents on its par value, for which Springer paid him, through Needham, $1,000, and he was finally paid in full therefor, by Needham for Springer, on the 8th day of May following. By Springer's direction, 290 of the shares of stock so purchased by him were transferred to Kirk Himrod, and 30 of them were transferred to Thomas A. Hagerty, under previous agreements between Springer and those parties that they should hold such shares for him. On the 6th of May, 1889, the original certificates of stock were taken up and canceled, and new ones were issued in lien thereof directly to Himrod and Hagerty. The directors of the company elected in January, 1889, for the ensuing year, were Albert B. Pullman, William M. Van Nortwick, J. W. Cotton, Charles A. Needham, and Charles T. Yerkes; and Albert B. Pullman was elected its president and treasurer, and Charles A. Needham its secretary, for that year. At the adjourned meeting of the stockholders held on the 15th of April the record of the meeting shows there were present Yerkes, Pullman,...