Crozier v. Freeman Coal Min. Co.
| Decision Date | 03 June 1936 |
| Docket Number | Nos. 23348,23190.,s. 23348 |
| Parties | CROZIER v. FREEMAN COAL MIN. CO. McELVAIN et al. v. HOYNE. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Suit by Clara A. Crozier against the Freeman Coal Mining Company, James W. McElvain, and others, wherein James W. McElvain and others filed cross-bills, and Clara A. Crozier and James W. McElvain and others filed a supplemental bill and a cross-bill against the United States Fidelity & Guaranty Company and Maclay Hoyne and the United States Steel Corporation and others, and the United States Steel Corporation filed a cross-bill. From the decree, Maclay Hoyne appeals, and James W. McElvain and others and the United States Fuel Company, a cross-defendant, prosecute separate cross appeals.
Reversed and remanded, with directions.
SHAW, J., dissenting.Appeal from Superior Court, Cook County; Harry A. Lewis, judge.
Winston, Strawn & Shaw, and Maclay Hoyne, pro se, all of Chicago (John D. Black, of Chicago, C. C. Craig, of Galesburg, and Angus Roy Shannon, of Chicago, of counsel), for appellant.
John J. Healy and John H. S. Lee, both of Chicago, for appellees James W. McElvain and others.
Kemper K. Knapp, of Chicago, for appellees United States Steel Corporation and others.
Harlan L. Hackbert, of Chicago, for appellee United States Fuel Co.
A decree entered by the superior court of Cook county on March 26, 1935, among other things, sustained two injunctions issued in January, 1933, restraining Maclay Hoyne from prosecuting his claim for the recovery of an attorney's fee in two suits, one in the Supreme Court of New York initiated by Frank Crozier, who made Hoyne a defendant; and the other, a suit which he (Hoyne) filed in the United States District Court of New Jersey, allowed him $84,639.53 in full payment of his fee out of a fund held by the United States Steel Corporation and Gordon L. Edwards, its nominee, allowed the sum of $170,000 to James W. McElvain, J. William McElvain, and Thornton H. McElvain, and denied the claims of other claimants, including the United States Fuel Company. From that decree Hoyne prosecutes this appeal. The McElvains and the United States Fuel Company prosecute separate cross-appeals.
A consideration of the issues presented for decision requires a review of previous litigation between some of the parties named, and also certain other parties.
December 22, 1922, Clara A. Crozier filed a bill in equity in the superior court of Cook county against the Freeman Coal Mining Company, John J. Sherlock, individually and as trustee, the Burton Coal Company, and Fred A. Burton. The bill was amended on November 28, 1923, and the McElvain-Hoy Company, James W. McElvain, J. William McElvain, Thornton H. McElvain, and Carley H. Hoy were added as parties defendant. On the same day, namely, November 28, 1923, James W. McElvain, and his sons, J. William and Thornton H. McElvain, filed a cross-bill against the Freeman Coal Mining Company, the Burton Coal Company, Fred A. Burton, John J. Sherlock, individually and as trustee, and Carley H. Hoy. Various answers, replications, amended bills, and amended cross-bills were subsequently filed by the respective parties.
The original complainant, Mrs. Crozier, by her pleadings sought, among other relief, to obtain a decree setting aside a transfer to Burton by herself in January, 1922, of $50,000 of bonds executed by the Freeman Company in February, 1921, payable to bearer, with 7 per cent. interest, payable semiannually, secured by a trust deed conveying to Sherlock, as trustee, certain leasehold premises in Williamson county, and also the transfer of a promissory note for $50,000 executed by the Freeman Company on November 1, 1921, payable to the order of Mrs. Crozier thirty days after date, with 7 per cent. interest per annum, and guaranteed by McElvain and Hoy, officers and stockholders of the Freeman Company, and further secured by a collateral promissory note of the McElvain-Hoy Company dated November 1, 1921, for $70,000, payable to the Freeman Company six months after date, which recited the delivery to the Freeman Company of accounts receivable as collateral of the value of $50,000, and was also guaranteed in writing by McElvain and Hoy and indorsed in blank by the Freeman Company. The bill charged that the transfer of the bonds and notes was obtained by Burton and Sherlock by fraud, misrepresentation, and duress.
The object of the cross-bill was to set aside certain transactions and transfers of stock by the McElvains in January, 1922, and agreements executed thereafter ratifying and confirming such transactions and transfers, and certain other transactions to require the return of shares of stock and an accounting by the defendants to the cross-bill. By their cross-bill the McElvains alleged a conspiracy of Burton, Hoy, and Sherlock to obtain from them by fraud, blackmail, threats, and false representations, the mine, assets, business, and capital stock of the Freeman Company, and to release the Burton Company from a large debt which it owed to the Freeman Company, and set out in detail threats of criminal prosecution and immediate arrest and false representations used to accomplish these purposes, and the result that they (the McElvains) were coerced into delivering to Burton their shares of stock in the Freeman Company and turning over to him the management and control of the company, and that, by obtaining such control of the Freeman Company, Burton fraudulently prevented it from asserting its claim against the Burton Company for a large amount of money.
The important question before this court revolves around a judgment recovered in the United States Court of Claims by the Burton Company against the United States for coal sold during the war. 60 Ct.Cl. 294. A portion of the proceeds of that judgment is now in the hands of the United States Steel Corporation in the state of New York. Out of this fund Hoyne claims a fee equal to one-third of the amount of the judgment actually paid to the steel corporation in satisfaction of the judgment. It becomes important to set out in concise form the nature of this claim and the fund involved, inasmuch as it enters into the subsequent acts and pleadings of the parties hereinafter set forth in this opinion.
From the facts it must be borne in mind that this court, in its decision in Crozier v. Freeman Coal Mining Co. (No. 16832, not published), clearly distinguished between the obligation of Burton individually, and the Burton Company, to the complainant and cross-complainants in that suit. From the facts it appears that on September 10, 1920, the Burton Company entered into a contract with the United States to sell to it 150,000 tons of coal, including 60,000 tons of Freeman Company coal. Frank Crozier, an attorney and husband of the complainant, acted as attorney for both the Freeman Company and the Burton Company in the preparation of the contract. The Burton Company delivered a part of the coal sold, but before complete delivery the United States refused to accept or pay for the balance. For this breach the Burton Company recovered judgment against the United States in the Court of Claims for $445,428.40.
A decree was entered on April 3, 1925, by which certain issues were decided in favor of Mrs. Crozier and the McElvains upon their bill and cross-bill, respectively. In particular, it was decreed that there was then due to the Freeman Company $219,762 of the judgment mentioned, and the Burton Company was directed to assign to the receiverof the Freeman Company appointed by the trial court the sum named. The Freeman Company, the Burton Company, Burton, Sherlock, individually and as trustee, and Hoy, appealed to this court. On the day the decree was entered, the parties last named presented their appeal bond in the sum of $750,000, which was approved by the court and filed. The appeal bond provided, among other things, that if the appellants ‘shall duly prosecute their said appeal with effect, and moreover, pay the several amounts in said decree provided * * * and * * * shall do and perform the several things in said decree provided to be done * * * in case the said decree shall be affirmed in said Supreme Court, then the above obligation to be void, otherwise to remain in full force and virtue.’
The opinion of this court in the original proceeding (Crozier v. Freeman Coal Mining Co., supra) was filed February 20, 1929. A rehearing was, in the language of the court, ‘improvidently allowed,’ and upon the filing of an additional opinion on October 19, 1929, the opinion of February 20 was confirmed. The decree of the superior court was reversed and the cause was remanded to that court, with directions to enter a decree setting aside the transfer of the bonds, the $50,000 note, and the $70,000 collateral note by Mrs. Crozier to Burton and her release to him in January, 1922; directing the return of the notes and release to Mrs. Crozier; declaring her to be the legal owner of the bonds; directing that Burton and the Burton Company deliver them to the clerk of the court; decreeing that the Freeman Company pay to Mrs. Crozier the amount due on them, principal and interest, to the date of the decree, as provided on the face of the bonds and by the interest coupons attached, and that execution issue therefor; also setting aside the transfers of James W., J. William and Thornton McElvain to Burton of their shares of stock in the Freeman Company and in the McElvain-Hoy Company, and all the contracts, releases, and receipts of the McElvains, or either of them, concerning the transfer of the capital stock of the Freeman Company and the McElvain-Hoy Company to Burton or purporting to confirm or ratify the transanctions under which the control of the Freeman Company was turned over the Burton; setting aside, also, the contract of September 28, 1922, between McElvain and Hoy purporting to transfer to Hoy stock in the ...
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