Gillett v. Chicago Title & Trust Co.
| Decision Date | 06 December 1907 |
| Citation | 230 Ill. 373,82 N.E. 891 |
| Court | Illinois Supreme Court |
| Parties | GILLETT v. CHICAGO TITLE & TRUST CO. WEAVER v. SAME (two cases). STUART v. SAME. BREWSTER v. SAME. BODMAN v. SAME. DE CAMP v. SAME. LOBDELL v. SAME. MAXWELL v. SAME. HATELY v. SAME. BUTLER v. SAME. LOGAN v. SAME. HENRY v. SAME. MERCHANTS' LOAN & TRUST CO. v. SAME. LYON v. SAME. CUDAHY v. SAME. HALBERT v. SAME. HINKLEY v. SAME (three cases). LEE v. SAME. McCLURG v. SAME. PORTER v. SAME. PECK v. SAME (two cases). STEENBERG v. SAME. THRALL v. SAME. VALENTINE v. SAME. DEERE v. SAME. McNALLY v. SAME. KNAPP v. SAME. HYNES v. SAME. SICKEL v. SAME (two cases). BERRIMAN v. SAME. GAGE v. SAME. PHELPS v. SAME. SCHMITT v. SAME. TWITCHELL v. SAME. TAYLOR v. SAME. BARBOUR v. SAME. FREES v. SAME. AMERICAN TRUST & SAVINGS BANK v. SAME. WARE v. SAME. RANDALL v. SAME. NELSON v. SAME. KIRK v. SAME. |
OPINION TEXT STARTS HERE
Appeals from Appellate Court, First District, on Appeal from Circuit Court, Cook County; M. F. Tuley, Judge.
Bill by the Buda Foundry & Manufacturing Company against the Columbian Celebration Company, Egbert W. Gillett, for whom Charles W. Gillett, executor, was substituted upon his death, and others, in which the Chicago Title and Trust Company was appointed receiver. From a judgment of the Appellate Court, for the First District, affirming a decree for complainant, defendant Charles W. Gillett appeals. With this case have been consolidated in this court cases bearing titles and general numbers as follows, to wit: 5,339, Weaver v. Chicago Title & Trust Co., Receiver of Columbian Celebration Co., et al.; 5,370, Weaver v. Same; 5,383, Stuart v. Same; 5,384, Bodman v. Same; 5,385, Brewster v. Same; 5,386, De Camp v. Same; 5,387, Hinkley et al. v. Same; 5,388, Lobdell v. Same; 5,389, Maxwell v. Same; 5,390, Merchants' Loan & Trust Co. v. Same; 5,391, Hately v. Same; 5,392, Lyon v. Same; 5,393, Butler v. Same; 5,394, Cudahy v. Same; 5,395, Hinkley v. Same; 5,396, Halbert v. Same; 5,397, Logan v. Same; 5,398, Hinkley v. Same; 5,399, Henry v. Same; 5,400, Lee v. Same; 5,401, McClurg v. Same; 5,402, Porter v. Same; 5,403, Peck v. Same; 5,404, Peck v. Same; 5,405, Steenberg v. Same; 5,406, Thrall v. Same; 5,407, Valentine v. Same; 5,408, Deere v. Same; 5,409, McNally v. Same; 5,410, Knapp v. Same; 5,411, Hynes v. Same; 5,412, Sickel v. Same; 5,413, Berriman v. Same; 5,414, Gage v. Same; 5,415, Phelps v. Same; 5,416, Schmitt v. Same; 5,417, Twitchell v. Same; 5,418, Taylor v. Same; 5,419, Barbour v. Same; 5,420, Frees v. Same; 5,421, American Trust & Savings Bank v. Same; 5,422, Ware v. Same; 5,423, Randall v. Same; 5,424, Sickel v. Same; 5,425, Nelson v. Same; 5,430, Kirk v. Same. Affirmed in each case, except that of Edward L. Brewster, in which case judgment is reversed and rendered.
Leroy D. Thoman, for appellants.
Scott, Bancroft & Stephens, E. R. Bliss, Herrick, Allen, Boyesen & Martin, and Horace K. Tenney (Raymond D. Stephens, E. R. Bliss, Edgar A. Bancroft, and I. K. Boyesen, of counsel), for appellees.
On June 10, 1893, the Buda Foundry & Manufacturing Company, an Illinois corporation doing business in the city of Chicago, filed a bill in the circuit court of Cook county against the Columbian Celebration Company, a corporation, and a large number of its stockholders, under section 25, c. 32, Hurd's Rev. St. 1905, on behalf of itself and all other creditors of said company, for the appointment of a receiver, the dissolution of said corporation, and the enforcement of stockholders' liability. Certain other creditors were later joined as co-complainants. To the bill as amended a large number of defendants interposed general demurrers, which, on June 25, 1894, were sustained by the court, and the bill dismissed for want of equity. An appeal was taken by the complainant to the Appellate Court for the First District. The decree was reversed and the cause remanded by that court, and on February 15, 1895, was redocketed in the said circuit court, and the demurrer was thereafter overruled. On May 20, 1905, the cause came on for hearing upon the amended bill, the answers of a large number of defendants, and the replications thereto, the report and supplemental report of the master made in accordance with orders of reference theretofore entered, and the exceptions filed thereto, and on that day a decree was entered by the court which finds, among other things, that during the latter part of the year 1891 Steele MacKaye, who was at that time a playwright and who was a man of small means, conceived the project of producing a spectacular show or panorama at Chicago during the World's Columbian Exposition, which panorama should exhibit on a lifelike scale the discovery of America by Columbus; that said MacKaye planned that he would write a story of said panorama and construct an enormous building near the expositiongrounds, in the said city, in which to give said exhibition, and he proposed to invent certain devices which would be improvements in the methods of scene shifting and in the production of realistic spectacular performances and to use said devices and improvements in said building; that for the purpose of carrying out said project said MacKaye joined with him, as promoters of the scheme, Benjamin Butterworth and Powel Crosley, and secured the services of defendant William L. B. Jenney, an architect of Chicago, who was to work out MacKaye's ideas and put them into practical form; that on January 13, 1892, the said three promoters obtained a charter from the Secretary of State of the state of Illinois for a corporation called the ‘Spectatoria Company,’ with an authorized capital stock of $100,000, consisting of 1,000 shares, of the par value of $100 each; that said stock was subscribed for as follows, to wit: Steele MacKaye 998 shares, Powel Crosley 1 share and Lewis H. Utz 1 share,-and that said three subscribers formed the first board of directors of said corporation; that at the time of the incorporation of said company the said promoters planned that they would procure patents on MacKaye's proposed stage improvements, and when so procured they would turn over said patents to said Spectatoria Company as pretended payments for the capital stock of said corporation subscribed for by MacKaye, and would then divied the said stock among themselves; that shortly thereafter the said promoters decided that they would organize a second corporation, with a capital stock of $2,000,000, and that MacKaye should subscribe for all of said stock with the exception of 4 shares, and should pretend to pay for the same by transferring to said corporation the right to use for a limited time in a limited territory all of said MacKaye's inventions and letters patent which might thereafter be issued on said inventions, subject, however, to a royalty of 10 per cent. on the gross receipts secured by said second corporation from the use of said inventions and patents, which should be paid daily to MacKaye; that said promoters planned that said inventions, and the patents to be issued thereon, and the right to said royalty, should be transferred by said MacKaye to the aforesaid Spectatoria Company, subject to the right of the said second corporation to use said patents as hereinbefore mentioned; that said promoters planned to procure money to secure a site and construct a building thereon by having said second corporation issue and sell $800,000 of bonds secured by a first mortgage on the said site, building, and patents; that in order to facilitate the sale of said bonds the said promoters proposed that MacKaye should turn back to said second corporation $800,000 of the capital stock of said corporation when received by him, which stock should be issued by said corporation as bonus for bonds to be sold; that, in order to start and carry out said plan, Butterworth and MacKaye, in 1892, secured loans of several thousand dollars from defendants Edward B. Butler and Egbert W. Gillett, severally, and through them secured the co-operation of defendants J. Foster Rhodes, Henry E. Weaver, Bernard A. Eckhart, and Edward L. Brewster in promoting said plan, and gave to the most of them stock in the Spectatoria Company, and promised each of them stock in the new corporation in return for their assistance, and that with the money so raised a miniature model of the proposed stage and proposed panorama was constructed from the plans drawn by defendant Jenney and was exhibited in the early months of 1892 in a room secured by the promoters in the Auditorium Hotel, in Chicago; that a large proportion of the defendants visited the model show and listened to lectures by MacKaye, in which he explained the enterprise and the plan for financing the same.
The court further finds: That in pursuance of said plan, on May 6, 1892, the Columbian Celebration Company was incorporated, with a capital stock of $2,000,000, divided into 20,000 shares, of the par value of $100 each. That said MacKaye subscribed for 19,996 shares of said stock, and defendants Sidney C. White, Jr., Howard O. Edmonds, Powel Crosley, and Benjamin Butterworth 1 share each, and that said five men constituted the first board of directors of said corporation. That thereafter, on May 16, 1892, at the first meeting of said directors, a contract was entered into between MacKaye and the said corporation, by which MacKaye, in consideration of the payment to him of 19,996 shares of the capital stock of said company, full-paid and nonassessable, and the payment to him of said royalty, as heretofore planned, assigned to said company the right to use his said inventions and the manuscript which he would prepare for a term of 15 years in certain states. That thereafter, on May 21, 1892, said MacKaye assigned to said Spectatoria Company, in consideration of the 998 shares of said stock issued to him, his right to said 10 per cent. royalty and all rights in his patents and inventions heretofore mentioned, subject only to the use of the same by the Columbian Celebration Company as hereinbefore mentioned. That on the same day the said ...
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