Foss v. People's Gas Light & Coke Co.

• Decision Date: 14 October 1909
• Citation: 89 N.E. 351,241 Ill. 238
• Court: Illinois Supreme Court
• Parties: FOSS v. PEOPLE'S GAS LIGHT & COKE CO.

241 Ill. 238

89 N.E. 351

FOSS

v.PEOPLE'S GAS LIGHT & COKE CO.

Supreme Court of Illinois.

June 16, 1909.

Rehearing Denied Oct. 14, 1909.

Appeal from Appellate Court, First District, on Appeal from Circuit Court, Cook County; J. W. Mack, Judge.

Bill by John P. Foss against the People's Gas Light & Coke Company. From a decree dismissing the bill, affirmed by the Appellate Court, complainant appeals. Affirmed.

Knight, Barbour & Adams, Francis W. Walker, Robert F. Pettibone, and Feed H. Raymond (H. S. & F. S. Osborne and Albert G. Welch, of counsel), for appellant.

Sears, Meagher & Whitney (James F. Meagher and Jesse J. Ricks, of counsel), for appellee.

VICKERS, J.

John P. Foss filed a bill in the circuit court of Cook county against the People's Gas Light & Coke Company, to which a general demurrer was interposed and sustained. Afterwards Foss filed an amended bill, to which a general demurrer was sustained, the complainant's application to further amend his bill denied, and the bill dismissed. The decree dismissing the bill for want of equity having been affirmed by the Appellate Court for the First District, by his further appeal Foss has brought the record to this court for review.

Only two questions are presented for our consideration: First. Did the court err in sustaining the demurrer to the amended bill? Second. If the bill was defective, did the court err in denying the appellant's application for leave to amend?

The amended bill states that the defendant gas company is an Illinois corporation, organized under a special act of the Legislature approved February 12, 1855 (Priv. Laws 1855, p. 614), and amended in 1865 (Priv. Laws 1865, p. 589); that said gas company is engaged in the manufacture and sale of gas for illuminating and other purposes in the city of Chicago; that said company has since 1865 been extensively engaged in the manufacture and sale of gas, from which large revenues and profits have been derived which by right ought to have been distributed to the stockholders; that about the year 1887 the gas company by merger or consolidation acquired the property and franchises of the Illinois Light, Heat & Power Company, and that subsequently, between 1887 and 1899, a number of other gas companies were merged into or consolidated with the appellee company; that appellee, as such consolidated company, has been engaged in the manufacture and sale of gas in the city of Chicago, and elsewhere in Cook county, all the time since the mergers or consolidations occurred, and that from such business the company has derived large profits and incomes, the surplus of which, after the payment of its debts and obligations, is and by right ought to be the property of its stockholders; that the original capital stock of appellee was $500,000; and that since the company was organized under the authority of the amendatory act of February, 1865, the capital stock has been increased from time to time, as the exigencies of its business and the purchase of other properties required, until now the capital stock of appellee is $35,000,000, of which shares to the amount of $32,969,100 have been issued and are now outstanding. The amended bill then avers ‘that in or about 1857 complainant became, ever since has been, and now is a stockholder of the People's Gas Light & Coke Company and the owner of 1,500 shares, of the par value of $50 each, of the original capital stock of said defendant corporation, which were and are full paid and nonassessable, and that complainant, since the year 1857, has been, and now is, entitled to receive his proportionate share of the surplus profits earned by the defendant corporation whenever any distribution of the surplus profits of defendant has been made to the stockholders of said corporation.’

The amended bill then proceeds as follows: ‘That at various times since 1857, which times complainant is unable to state definitely, said corporation has declared dividends of stock and money and has made distributions of profits among its other stockholders to the exclusion of complainant; that complainant has participated in none of such distributions of stock, money, or other property; that complainant has inquired of said corporation, and of its officers and managers, the time and amount, character, and extent of such distributions of stock, money, and property, but, although complainant has so as aforesaid demanded to know the times, extent, and character of said distributions, yet defendant, its officers and managers, have hitherto failed and refused to inform complainant thereof, and still do so refuse, to the manifest injury of complainant and in fraud of his rights as stockholder of said corporation. Complainant is informed and believes, and so states, that defendant has acquired stocks, bonds, and other securities of the aforesaid corporations by consolidation or otherwise, which were and are of great value, and which complainant is informed and believes have, either in whole or in part, been distributed to various favored stockholders of defendant, but complainant has been excluded from such distribution; that complainant, before the commencement of this suit, demanded from defendant a statement of such acquisitions and distributions, but defendant failed and refused to make any statement thereof to complainant; that the complainant also demanded, before the commencement of this suit, his proportion of such stocks, bonds, and other securities and property, but defendant failed and refused, and still fails and refuses, to distribute to complainant his proportionate share of the same; that, before the commencement of this suit, complainant demanded of defendant that it account with him for the profits of its said business and concerning the management thereof; and that it inform the complainant of the terms and conditions upon which defendant acquired the properties, privileges, franchises, and effects of the aforesaid companies, and of the terms and conditions upon which it holds the same, and the amount, character, and value thereof, and also, before the commencement of this suit, demanded of the defendant opportunity to examine the books, records, and papers of the defendant, and demanded a statement of the conditions of the business of defendant and of the conditions upon which the defendant acquired the aforesaid securities, properties, franchises, privileges, and effects of the aforesaid companies, and demanded the proportion of the capital stock of said company distributable to complainant by reason of his original holdings, and demanded an account by defendant of and concerning its business and affairs since complainant became a stockholder therein, and of the amount of its profits distributed to its stockholders, as aforesaid, and of the amount and disposition of the profits distributable to complainant on account of his said holding and ownership, as aforesaid, and the privilege of inspecting the books, records, and papers of defendant to which complainant is entitled as a stockholder, as aforesaid, but the complainant further shows that defendant failed and refused, and still does fail, neglect, and refuse, to account to complainant for the profits of its said business or concerning the management thereof, and to inform complainant of the terms and conditions upon which the said defendant has acquired the property and franchises of the aforesaid companies, or the terms or conditions upon which defendant holds the same, or the amount, character, or value thereof, and has heretofore failed, neglected, and refused, and still does, to permit complainant to ascertain from the books, records, and papers of defendant the past or present condition of its business or the conditions upon which defendant acquired the aforesaid securities, properties, and franchises of the aforesaid companies, and failed and refused, and still does fail and refuse,to distribute to the complainant his proportion of the capital stock of said company distributable to him by reason of his original holdings, and the increase thereof, and failed and refused, and still does fail and refuse, to render complainant an account concerning its business and affairs and the amount of its profits distributable to its stockholders, as aforesaid, and of the amount and disposition of the profits distributable to complainant upon account of his said holdings, as aforesaid, and defendant failed, neglected, and refused, and still does fail, neglect and refuse, to allow the complainant the privilege of inspecting the books, records, and papers of defendant; that the officers and agents of defendant are fraudulently diverting the revenue, gains, and profits of said corporation from the proper channels and from its stockholders proportionately, and are applying said revenue, gains, and profits to the benefit of certain of the stockholders of said company, and thereby defrauding complainant and others of said stockholders of his and their rights in the premises, and that defendant is conspiring with various persons to complainant unknown, but who, when discovered, he prays may be made parties to this bill, to deprive complainant of his proportionate share of the revenues, gains, and profits of defendant and of his rights as a stockholder, and, so conspiring, is distributing to such other unknown persons certain of the moneys and profits and things valuable which of right belong to complainant, and thereby defrauding complainant, to his irreparable loss and injury, and complainant fears and charges that he is in danger of losing the amount due him as his proportionate share of said revenue, gains, and profits of said corporation unless some suitable person is appointed by this honorable court, as receiver, to receive and take charge of the books of account of said corporation and collect the amounts due the same, and receive and take charge of said corporation's assets and collect and receive the revenue, gains,...