Distilling & Cattle Feeding Co. v. People ex rel. Moloney

• Decision Date: 13 June 1895
• Citation: Distilling & Cattle Feeding Co. v. People ex rel. Moloney, 156 Ill. 448, 41 N.E. 188 (Ill. 1895)
• Court: Illinois Supreme Court
• Parties: DISTILLING & CATTLE FEEDING CO. v. PEOPLE ex rel. MOLONEY, Attorney General.

156 Ill. 448

41 N.E. 188

DISTILLING & CATTLE FEEDING CO.

v.PEOPLE ex rel. MOLONEY, Attorney General.¹

Supreme Court of Illinois.

June 13, 1895.

Appeal from circuit court, Cook county; John Gibbons, Judge.

Quo warranto by the people of the state of Illinois, on the relation of M. T. Moloney, attorney general, against the Distilling & Cattle Feeding Company.There was judgment of ouster.Defendant appeals.Affirmed.Stevens & Horton and Runnells & Burry, for appellant.

M. T. Moloney, Atty. Gen. (Samuel Richolson, T. J. Scofield, and M. L. Newell, of counsel), for appellee.

This was a proceeding by quo warranto, brought in the name of the people of the state of Illinois, by the attorney general, against the distilling & Cattle Feeding Company.The defendant appeared and filed a number of pleas, to all of which demurrers were sustained; and, the defendant electing to abide by its pleas, judgment was rendered against it, ousting it from its franchises, and for costs.From that judgment, the defendant now appeals to this court.

The information alleges that on May 10, 1887, there were existing and doing business in various parts of this state five different corporations organized under our laws, also one corporation organized under the laws of the state of Missouri, and one corporation organized under the laws of the state of Ohio, and a copartnership and an individual also doing business in that state, all of which were then engaged in operating distilleries, in the purchase of grain, and in the manufacture and sale of alcohol and other distillery products, and that for the purpose of forming and creating a trust, and with the design of controlling and regulating the output, manufacture, and sale of distillery products, and of establishing a monopoly in the manufacture and sale of the same, the owners of the capital stock of those corporations, together with the firm and individual above mentioned, entered into and executed a trust agreement as follows:

‘Whereas, it is designed to form a trust to be known as the ‘Distillers' and Cattle Feeders' Trust,’ for the purpose of securing intelligent co-operation in the business of distilling spirits from grain or other material, malting, and the feeding of live stock, and the sale of the products thereof in home and foreign markets, and to do all other business incidental to those enumerated: Therefore, it is mutually agreed by all who may sign this agreement,or become at any time the holders of the certificates of trust herein provided for, as follows:

‘First.The trust herein created shall be vested in nine trustees.

‘Second.William H. Hobart, George K. Duckworth, Lewis H. Green, Peter J. Hennessy, Alfred Davis, Joseph B. Greenhut, Warren H. Corning, Adolph Woolner, and John H. Francis are hereby appointed trustees, to hold their office until the 1st day of May, A. D. 1888, or until their successors are elected and qualified.

‘Third.The trustees shall prepare certificates which shall show the interest of each beneficiary in said trust, and deliver them to the persons entitled thereto.The certificates shall be divided into shares of the par value of $100.00 each, and shall be known as the ‘Distillers' and Cattle Feeders' Trust Certificates.’The trustees shall have full power to agree upon and direct the form and contents of said certificates, and the mode in which they shall be executed, attested, and transferred.The certificates shall contain an express stipulation that the holders thereof shall be bound by the terms of this agreement, and by the by-laws herein provided for.

‘Fourth.No certificates shall be issued except for stock, as hereinafter provided, and the par value of the certificates issued shall represent as nearly as possible the actual cash value of the stock held by the trustees in trust.The certificates shall be the best evidence of the amount of interest of the beneficiaries in the trust.No duplicate certificates shall be issued by the trustees except upon surrender of the original certificate and cancellation of the same, or upon satisfactory proof of the loss thereof, and the giving of a satisfactory bond of indemnity.

‘Fifth.Each subscriber hereto agrees to assign and transfer absolutely to said trustees the number of shares of capital stock of the particular corporation or corporations indicated in article 6 of this agreement, in consideration of which said trustees do hereby agree to execute and deliver to each subscriber trust certificates, as above specified, for the number of shares, which certificates, at the par value thereof, shall represent the cash value of the stock so delivered.The value of the capital of any corporation whose stock shall be assigned to said trustees shall be first agreed upon between said trustees and the stockholders willing to transfer the same, and, after it is agreed upon, there shall be no discrimination in the purchase price as between stockholders of the same corporation transferring their shares at the same time.

‘Sixth.This agreement shall take effect as soon as those holding a majority of stock in the following corporations, formed or to be formed, to wit: The Storrs Distilling Company, by the Mill Creek Distilling Company; the Maddux-Hobart Company, by Maddux, Hobart & Co.; the White Mills Distilling Company, by George K. Duckworth; the Great Western Distilling Company; Monarch Distilling Company; Woolner Brothers' Distilling Company; Peoria Distilling Company; Birmingham Distilling Company, by Chicago Distilling Company; Missouri Distilling Company, by Mound City Distilling Company,-have transferred the same to said trustees.Thereafter the said trustees and their successors shall have power to purchase other stocks of the same companies, or of companies organized for conducting the same business, or any of the businesses hereinbefore specified, and may issue therefor certificates of trust equal at par value to the cash value of the stocks so purchased, or shall have power to lease the premises of such companies, paying therefor such rental as they may deem proper, whenever, in their judgment, it is for the best interests of the trust to lease rather than purchase.

‘Seventh.All stocks sold and transferred to said trustees shall be held by them and their successors for the benefit of all the owners of said trust certificates.No stocks so held by said trustees shall be sold or surrendered by said trustees, during the continuance of this trust, without the consent of a majority, in number and value, of the holders of trust certificates: provided, however, that said trustees may from time to time assign such shares of stock as may be necessary to qualify any person or persons chosen or desired to be chosen as directors of any companies, the stocks of which are held by said trustees.

‘Eighth.That said trustees shall have power to cause corporations to be formed for the purposes and with all or any of the powers specified in section 1 of this agreement: provided, that the stock of such corporation shall be issued for cash or for property at its cash value, and shall be issued to or be purchased by said trustees in the manner provided in section 6 of this agreement.

‘Ninth.Said trustees shall receive and safely keep all moneys received from dividends or interest upon stocks or moneys held in trust, and shall distribute the same, as well as all moneys received from sales of trust property, by declaring and paying monthly dividends upon said trust certificates as funds accumulate which are not needed for the uses and expenses of the trust.The trustees shall, however, keep separate accounts of receipts from dividends and interest, and of receipts from sales of trust property, and, in declaring any dividend in which moneys derived from sales of trust property are included, shall render the holders of trust certificates a statement showing what amount of the fund distributed was derived from such sales or transfers.

‘Tenth.The trustees shall render to the holders of trust certificates at each annual meeting a statement of the receipts and disbursements of the trust for the year.They shall, also, whenever demanded by a majority in value of the holders of trust certificates, furnish a true and perfect inventory and appraisement of all property held in trust, and a statement as full as possible of the financial affairs of the various companies whose stocks are held in trust.

‘Eleventh.Said trustees shall exercise supervision, so far as their ownership of stocks enables them to do, over the several corporations or associations whose stock is held by said trustees.As stockholders of said corporations, they shall elect, or endeavor to elect, honest and competent men as directors and officers thereof, who shall be paid a reasonable compensation for their services.They may elect themselves as such officers and directors, and shall endeavor to secure such judicious and efficient management of such corporations as shall be most conducive to the interests of the holders of trust certificates.

‘Twelfth.None of the powers of the trustees can be exercised except by unanimous vote of their full number, either in person or by proxy, except in the election of officers as provided in the by-laws: provided, that no proxy to represent a trustee can be given to or be voted by any person other than a trustee.And, in case of a disagreement among the trustees upon any matter, a majority of such trustees may call a special meeting of the holders of the certificates, as herein provided for, to whom shall be submitted the matter of disagreement; and a decision of a majority in value of the holders of trust certificates present in person or by proxy shall be final, or such matter of disagreement may be submitted at any regular meeting.The whole or any part of the foregoing provision of this article may be modified by any by-law now or hereafter adopted by the certificate holders.The said trustees may...