Cole v. Seaman

• Decision Date: 11 May 1920
• Docket Number: 5525.
• Citation: 266 F. 846
• Parties: COLE et al. v. SEAMAN et al.
• Court: U.S. Court of Appeals — Eighth Circuit

266 F. 846

COLE et al. v. SEAMAN et al.

No. 5525.

United States Court of Appeals, Eighth Circuit.

May 11, 1920

Ford W Thompson, of St. Louis, Mo. (W. B. Thompson, of St. Louis Mo., on the brief), for appellants.

William R. Gentry and Ephrim Caplan, both of St. Louis, Mo., for appellee Seaman.

Before HOOK and STONE, Circuit Judges, and LEWIS, District Judge.

STONE Circuit Judge.

This is an appeal from a denial of an application to intervene in the consolidated case of John W. Seaman v. Richard McCulloch et al. For a full statement of the pleadings and facts in the consolidated case, reference is made to the opinion on the appeal of Samuel W. Adler v. Seaman (also decided at this time) 266 F. 828. For the purposes of the present appeal, it is necessary to consider only a portion thereof, together with certain additional circumstances peculiar to this case.

Seaman filed his bill as a stockholder against certain officers and directors of the United Railways Company, alleging fraudulent diversion of corporate assets, and also wrongful acts and course of conduct of the directors and officers, resulting in arousing public encity, to the detriment of the company's business. He sought recovery of such wasted assets, the election of a new board of directors, and the submission to the stockholders, for adoption or rejection, of certain power contracts, alleged to have been fraudulently entered into by the directors. The bill also prayed a receiver, in the event that during the litigation the street railway system of the company should be threatened with dismemberment by creditors. This bill was filed January 7, 1918, and followed by an amended and a supplemental bill and answers. February 15, 1919, complainant moved the appointment of a receiver, and two days later a master was appointed to take testimony and report upon the advisability of appointing such receiver. March 27, 1919, and April 1, 1919, certain bondholders of the company were permitted to intervene, and, inter alia, prayed a receiver in their intervening petitions. April 11, 1919, Samuel W. Adler as a bondholder, filed a bill against the company and its predecessor, the St. Louis Transit Company, praying a receivership. The same day these two defendants answered admitting the allegations of the Adler bill, and the Railways Company joined in the prayer for a receiver. The day following a receiver was appointed, who qualified and has since...