Combes v. Milwaukee & M. R. Co.

• Decision Date: 05 February 1895
• Citation: 62 N.W. 89,89 Wis. 297
• Court: Wisconsin Supreme Court
• Parties: COMBES v. MILWAUKEE & M. R. CO. (KEYES, INTERVENER).

89 Wis. 297

62 N.W. 89

COMBES

v.MILWAUKEE & M. R. CO. (KEYES, INTERVENER).

Supreme Court of Wisconsin.

Feb. 5, 1895.

Appeal from circuit court, Milwaukee county; D. H. Johnson, Judge.

Action by Richard Carman Combes against the Milwaukee & Minnesota Railroad Company. From an order, on intervention of Dwight W. Keyes, refusing to set aside the order authorizing service of summons by publication on defendant, and the service made in pursuance thereof, intervener appeals. Reversed.

It appears from the record: That for some years prior to June 1, 1858, the La Crosse & Milwaukee Railroad Company was duly incorporated by the legislature of Wisconsin, and organized as such to build and operate a railroad from Milwaukee to La Crosse, and was given the right to mortgage its road by divisions. That it accordingly divided the road into two divisions,--the eastern, extending from Milwaukee to Portage City, a distance of 95 miles; and the western, extending from Portage City to La Crosse, a distance of 105 miles. That the eastern division was incumbered by three mortgages, to secure bondholders on that division, and the western division was incumbered by two mortgages, to secure bondholders on that division. That the whole road was incumbered by several judgments, one of which was in favor of Newcombe Cleveland, hereinafter mentioned. That June 1, 1858, that company executed a mortgage to William Barnes, as trustee, to secure an issue of bonds which covered the whole road, and August 11, 1858, executed a mortgage supplemental to said last-named mortgage, by way of further assurance. That the Barnes mortgage, though last, was first foreclosed. That sale under it was made May 21, 1859. to said trustee, who became the purchaser for the bondholders, and the bondholders thereupon, and on May 23, 1859, organized a new company under the general statutes of this state, by the name of the Milwaukee & Minnesota Railroad Company, to which Barnes conveyed the property so purchased by him. That said new company was so organized for the purpose of acquiring title to the railroad formerly owned by the said La Crosse & Milwaukee Railroad Company, extending from Milwaukee to Portage City, in the state of Wisconsin, a distance of about 95 miles, and for operating said road and paying off said prior incumbrance. That October 24, 1864, for the purpose of raising money to pay off prior incumbrances upon the property of said corporation, and for other purposes of the corporation, the said Milwaukee & Minnesota Railroad Company duly executed, under its corporate seal, a trust deed whereby it conveyed all of its property and franchises to James H. Fonda and G. Hilton Scribner, of New York, to secure certain bonds to be issued by said company to the aggregate amount of $600,000, each bond to be for $1,000, payable July 1, 1884, with interest at the rate of 8 per cent. per annum, payable semiannually. That October 24, 1864, the defendant, the Milwaukee & Minnesota Railroad Company, duly executed its bond, under its corporate seal, bearing date on that day, whereby it acknowledged itself indebted to the bearer thereof in the sum of $1,000, which sum it thereby agreed to pay to the bearer thereof on July 1, 1884, at the office of the company in New York, with interest at the rate of 8 per cent. per annum, payable at the same place semiannually, on the 1st days of January and July in each year. That said bond was duly registered and countersigned by said trustees November 8, 1864. That annexed to said bond were 39 coupons, for $40, each of which was payable six months after the date of the preceding one. That annexed to the same bond was one coupon for $26.67, payable January 1, 1865. That October 24, 1864, the Milwaukee & Minnesota Railroad Company duly executed, under its corporate seal, 331 other bonds, bearing date on that day, and duly registered and countersigned by said trustees, of the same amount, form, tenor, and effect as the bond above described, except that each was designated by a different number, and each had 40 coupons attached, of the tenor and effect of those annexed to said bond so described. That the said 331 bonds were designated by the numbers stated. That December 1, 1864, the said 332 bonds were duly issued by the Milwaukee & Minnesota Railroad Company, and sold and transferred to various third parties, who paid a valuable consideration therefor. That payment of said first series of coupons, when they fell due, was refused. That, upon the organization of the Milwaukee & Minnesota Railroad Company, that company claimed to have succeeded to all the rights, property, and franchises of the La Crosse & Milwaukee Railroad Company, subject to all prior mortgages and judgments. That the first mortgage on the western division was subsequently foreclosed, and that division sold. That the purchasers at such sale thereupon organized a new company, by the name of the Milwaukee & St. Paul Railroad Company, which company went into possession of that division. That subsequently, and on April 18, 1866, Frederick P. James, as the assignee of the said judgment against the La Crosse Company, in favor of Newcombe Cleveland, mentioned, commenced a suit in equity in the circuit court of the United States for the district of Wisconsin, against the Milwaukee & Minnesota Railroad Company, to enforce the lien of said judgment on the said eastern division. That such proceedings were had in that suit that January 11, 1867, a decree was entered adjudging that there was due to said James on the judgment $98,801.51, and ordering a sale of the eastern division, subject to all prior liens, for its payment. That, under that decree, the property was, March 2, 1867, sold and conveyed to the Milwaukee & St. Paul Railway Company, for $100,920.94, and from that time the said last-named company, whose name has since been changed to the Chicago, Milwaukee & St. Paul Railway Company, has been in the possession of said road from Milwaukee to Portage City, as owner, under such sale and purchase. That since the sale of said road under said judgment and decree, as aforesaid (more than 26 years before the commencement of this action), the said Milwaukee & Minnesota Railroad Company has not conducted any of the ordinary business theretofore conducted by said corporation, or any business. That the law governing the election of the directors of said company, to wit, chapter 28, Private & Local Laws 1862, provided, in effect, that the regular annual meeting of the stockholders of the Milwaukee & Minnesota Railroad Company, for the election of directors of said company, should be held on the last Wednesday of May, at 10 o'clock in the forenoon of that day, in each year, in the city of Milwaukee. That the secretary of said company should give 30 days' notice of the place and time of said election, in at least two newspapers printed in Milwaukee, and the other at Madison. That the governor should annually appoint three inspectors for said election, who should take an oath faithfully and impartially to discharge the duties devolved upon them by said act. That the inspectors should meet at the time and place appointed for said election, and proceed to receive such votes for directors of said company as might legally be offered and received under said act. That the board of directors of said company should consist of nine persons authorized to vote at said election, and such nine persons receiving the highest number of votes at said election should be the board until another election should be held and their successors elected. That the said Dwight W. Keyes was elected secretary of the Milwaukee & Minnesota Railroad Company at the time of its organization. That he continued to act as such secretary so long as said company pretended to transact any business in Wisconsin, and was acting as such in 1865 and 1866. That he was never notified of the election of any successor, and never had any knowledge or information that any other person was elected as secretary of said company. That there never was after April, 1867, any meeting of the stockholders of said company, in Wisconsin or elsewhere, for the purpose of electing a board of directors, or for any other purpose. That after that time there never was a meeting of the board of directors. That no inspectors of election have ever been appointed since 1865. That no notice of the time and place of the meeting of stockholders of said defendant for the election of directors, or for any purpose, was ever published in any newspaper in Milwaukee or Madison since 1865. That no such notice has been published since 1865. That said Milwaukee & Minnesota Railroad Company has not, for more than 26 years prior to the commencement of this action, owned, possessed, or had any property within Wisconsin, nor has it been engaged in any business whatever. That April 12, 1893, the plaintiff caused a complaint to be made out and verified against the said Milwaukee & Minnesota Railroad Company, and, in addition to the issuance of said 332 bonds and the mortgage to secure the same and the nonpayment thereof, in effect alleged that, before the commencement of this action, the said 332 bonds were sold and transferred to this plaintiff for a valuable consideration, and he is now the owner thereof. That no part of the principal or interest thereon has been paid to him, and that there was then due to him from said defendant, the Milwaukee & Minnesota Railroad Company, upon said bonds, the sum of $332,000, together with interest thereon from December 1, 1864, and also interest upon each of said coupons from the date of its maturity, and demanded judgment against the Milwaukee & Minnesota Railroad Company for such amount. That thereupon a summons was issued in this action, and delivered to the sheriff of Milwaukee county, who returned the same, with the following indorsement, to wit: “State of Wisconsin, Milwaukee County--ss.: I hereby...