Fluker v. Emporia City Ry. Co.

• Citation: 30 P. 18,48 Kan. 577
• Parties: JOHN FLUKER et al. v. THE EMPORIA CITY RAILWAY COMPANY et al
• Decision Date: 07 May 1892
• Court: United States State Supreme Court of Kansas

30 P. 18

48 Kan. 577

JOHN FLUKER et al. v. THE EMPORIA CITY RAILWAY COMPANY et al

Supreme Court of Kansas

May 7, 1892

Error from Lyon District Court.

THE opinion states the case.

Judgment affirmed.

C. N Sterry, and J. Jay Buck, for plaintiffs in error.

L. B Kellogg, for defendants in error.

SIMPSON C. All the Justices concurring.

OPINION

SIMPSON, C.:

The plaintiffs in error, owning a minority interest in the Emporia City Railway Company, a corporation organized under the laws of this state, commenced this action in the Lyon county district court on the 12th day of October, 1889. The principal question in the case determined by the trial court, and the sole question here is, whether a receiver should be appointed. At the trial the court made the following special findings of fact:

"1. The Emporia City Railway Company is a corporation duly organized under the laws of the state of Kansas, and was incorporated about November 3, 1881. It capital stock is composed of 250 shares of $ 100 each. When this suit was commenced these shares were distributed and owned as follows, viz.:

By the plaintiff John Fluker

60 shares

By the plaintiff D. W. Holderman

16 shares

By the plaintiff John Holderman

8 shares

By the plaintiff Magdalene Holderman

8 shares

By the plaintiff Elizabeth Holderman

8 shares

By the plaintiff J. L. Patty

4 shares

By the plaintiff John H. Patty

4 shares

By the plaintiff D. W. Holderman, administrator, etc.

4 shares

By the plaintiff H. C. Cross, guardian, etc.

8 shares

Total

120 shares

By the defendant Van R. Holmes

50 shares

By the defendant C. V. Holmes

1 shares

By the defendant A. F. Crowe

28 shares

By the defendant J. D. Holden

51 shares

Total

130 shares

120 shares

250 shares

"2. At the time of the trial the plaintiff D W. Holderman had sold 14 of his 16 shares, and they were then owned by a person not a party to the suit. Eighty-five per cent. of the capital stock only has been paid in.

"3. The plaintiff John Fluker purchased his said 60 shares of stock about May 17, 1887, of his co-plaintiff D. W. Holderman, at 100 cents on the dollar, at which time the defendants were and ever since have been the owners of a majority of the capital stock, and in the control and management of said corporation.

"4. The board of directors of said corporation are: Van R. Holmes, J. D. Holden, John Fluker, D. W. Holderman, A. F. Crowe, and C. V. Holmes. The officers are: Van R. Holmes, president; John Fluker, vice-president; and J. D. Holden, secretary, temporary treasurer, and manager of the railroad.

"5. The 85 per cent. of stock paid in, amounting to $ 21,375, was all consumed in placing the road and equipments in operation. A large part of the rails were 'second-hand,' but with that exception the entire road and its equipments were new and in good condition when the road began to be operated, and up to May or June, 1887, when the last dividend was paid, the road was a fairly successful enterprise, but at that time its business decreased, and ever since it has been operated at a loss. In 1889 its expenses exceeded its receipts $ 1,235.74. In 1890 the receipts were sufficient to pay operating expenses, but on account of expenses by way of repairs the expenses exceeded the receipts in the sum of $ 707.21. The deficit for 1887 was $ 550. The deficit for 1888 was $ 2,100. Since the corporation began the operation of its street railway, the entire road and its equipments have run down and materially depreciated in value. It being impossible for the officers to make repairs out of the receipts of the road, none were made, except such as were necessary in order to keep the road in operation.

"6. The present assets of this corporation consist of the franchise from the city of Emporia, for the use of its streets in the operation of said railway for 20 years from 1881, together with 3 1/4 miles of track used and operated by said company, which track is worth $ 2,850; 20 mules, worth $ 920; one stable, lot, and building, $ 600; eight cars, $ 2,320; 15 per cent unpaid stock, $ 3,625; total, $ 10,315.

"7. The liabilities of said corporation are as follows: One note to A. F. Crowe, one of the defendants, for $ 3,000, with interest from August 17, 1889, at 10 per cent., which represented the entire indebtedness at that date, $ 3,000,; one note in bank, March, 1891, $ 1,150; unpaid taxes, $ 132; total, $ 4,282.

"8. The plaintiffs John Fluker and D. W. Holderman have, ever since soon after said Fluker purchased his stock, been dissatisfied with the management of the defendant officers of said corporation, and have sought to induce the board of directors to extend the lines of said road and change the manner of operating the road, but the defendants were in the majority, and persisted in pursuing their own methods. This disagreement caused considerable feeling and dissatisfaction on the part of Fluker, and he tried to buy of defendants enough of their stock to give him a controlling interest, and to that end made various offers of purchase, offering as high as two dollars for one for 28 shares; but said defendants refused to accept said offer, or any offer which did not include the entire stock of all the said defendants. The said defendants claim to have had no confidence in said Fluker's business capacity, and agreed together not to permit him to become the owner of a majority of the stock unless he would purchase all the said defendants owned. Said Fluker then tried to sell his stock to said defendants at different times and prices, until a short time before this suit was brought he offered to take 40 cents on the dollar for all of his stock, and D. W. Holderman offered to sell to said defendants his stock at 85 cents on the dollar; but the defendants declined to accept any of the offers made. Said Fluker then sought to be employed as manager of said road, and to this end proposed to operate said road without pay for his services, unless he should make the road pay a dividend of 6 per cent. per annum on all the stock; and to protect the corporation in the fulfillment of this proposition by...