Hodgson v. Duluth, Huron & Denver Railroad Co.
| Decision Date | 01 July 1891 |
| Citation | 49 N.W. 197,46 Minn. 454 |
| Parties | Edward J. Hodgson and others v. Duluth, Huron & Denver Railroad Company and others |
| Court | Minnesota Supreme Court |
A motion for a reargument of this case was denied July 16 1891.
This action was brought in Pope county. The defendants having demurred to the complaint, the demurrer was, by stipulation argued before Hooker, J., in Hennepin county. The demurrer was sustained and the plaintiffs appealed.
Order affirmed.
W Almont Gates, for appellants.
Davenport & Thian, for respondents.
The plaintiffs have appealed from an order sustaining a demurrer by the two defendant railroad corporations to the complaint. The three plaintiffs are stockholders of the defendant the Duluth, Huron & Denver Railroad Company, which is a Minnesota corporation. They own one-third of its paid capital stock the other two-thirds being owned by and under the control of the defendants Conkey and Evans. The plaintiffs have been members of the board of directors since the organization of the company, unless they were superseded by an election of others at the stockholders' meeting hereafter referred to. The defendant Conkey is the acting president of the company. In 1886 that company entered into a contract with the defendant Evans for the construction and equipment of its road. The contract provided for the payment for construction and equipment by the bonds of the company, secured by a trust-deed, which were to be executed to the trust company defendant for that purpose. Such bonds, secured by a trust-deed of all the property and rights of the corporation were executed and delivered to the trustee. Evans did not perform his contract, and did not acquire a right to receive any payment in such bonds. Under subcontracts made with Evans, a large amount of work was done in grading and building, which Evans did not pay for, and on account of which liens on the road were filed, and actions for the enforcement of the same are now pending. In 1887, Evans surrendered his contract to the board of directors, together with all the bonds, which had in fact been delivered to him; but, in 1888, Evans and Conkey, by falsely representing to the trustee that the contract had been extended, and that a large portion of the bonds had been earned, fraudulently and without any consideration procured the delivery to Evans of a large amount of such bonds. No other bonds of the company are outstanding. The complaint further shows that Conkey, as president and director, called an annual meeting of the stockholders to be held at Chicago, in the state of Illinois, in January, 1890, although the by-laws provided that such meetings should be held at Sauk Centre, in this state. At such meeting, these plaintiffs not being present, other persons, to the plaintiffs unknown, were in form elected as directors in their stead. In the following month a deed was executed (which was also recorded) by Conkey, as president, and Evans, as secretary, as the deed of the corporation, conveying the railroad and all the property and franchises of the company to the defendant the Duluth & Southwestern Railway Company, in consideration, nominally, of the payment by the latter of the outstanding...
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