In re Minnesota & Arizona Construction Co.

• Decision Date: 28 March 1900
• Docket Number: Civil 713
• Citation: In re Minnesota & Arizona Construction Co., 60 P. 881, 7 Ariz. 137 (Ariz. 1900)
• Parties: In the Matter of the MINNESOTA AND ARIZONA CONSTRUCTION COMPANY, a Corporation, in Bankruptcy. v. S. R. H. ROBINSON, Respondent and Appellee LINTON et al., Petitioners and Appellants,
• Court: Arizona Supreme Court

60 P. 881

7 Ariz. 137

In the Matter of the MINNESOTA AND ARIZONA CONSTRUCTION COMPANY, a Corporation, in Bankruptcy.

LINTON et al., Petitioners and Appellants, v. S. R. H. ROBINSON, Respondent and Appellee

Civil No. 713

Supreme Court of Arizona

March 28, 1900

APPEAL from a judgment of the District Court of the Third Judicial District in and for the County of Maricopa.Webster Street Judge.Affirmed.

The facts are stated in the opinion.

C. F Ainsworth, and J. K. Doolittle, for Appellants.

That the Minnesota and Arizona Construction Company was principally engaged in trading or mercantile pursuits within the purview of the present Bankruptcy Law, seeIn re San Gabriel Sanatorium Co.,90 F. 271;In re Odell,18 Fed. Cas. No. 10,426;Groves v. Kilgore,72 Me 489;Graham v. Hendricks,22 La. Ann. 524;Winter v. IowaR.R. Co., 30 Fed. Cas. No. 17,890;Wendel v. State,62 Wis. 300, 22 N.W. 435;Heyneman v. Blake,19 Cal. 579;In re Pinkney, 47 Kan. 89, 27 P. 179.

Baker &amp Bennett, for Respondent.

The Minnesota and Arizona Construction Company is neither a trader nor a merchant.In re Duff,4 F. 519;In re Merritt,7 F. 853;In re Smith, 2 Lowell, 69, Fed. Cas. No. 12,981.

OPINION

DOAN, J.

-- On the sixth day of February, 1899, S. R. H. Robinson filed his complaint in the territorial district court of Maricopa County against the Minnesota and Arizona Construction Company, a corporation, to recover $20,500 for services rendered the corporation as general manager and superintendent of the construction work then being prosecuted by it, and on second cause of action $510 on an assigned claim of James A. Fleming against the defendant for office rent.On March 21st the defendant answered, and admitted the services rendered by the plaintiff, but denied any indebtedness thereon in excess of $3,541, and alleged that at the time of the organization of the defendant company the plaintiff received seven hundred and fourteen shares of the capital stock of the defendant corporation, -- an equal amount with his co-organizers; and that it was the agreement and understanding that plaintiff should receive his compensation for services rendered by way of dividends on stock.Ancillary to his action, plaintiff sued out a writ of attachment, which was levied on personal property of the defendant.The defendant corporation was organized under the laws of the territory of Arizona by articles executed on the thirtieth day of March, 1895, by Donald Grant, R. B. Langdon, A. H. Linton, D. W. Grant, C. S. Langdon, S. R. H. Robinson, and Samuel Grant, who, by the articles, became the board of directors, with Donald Grant president, A. H. Linton vice-president, C. S. Langdon secretary and treasurer.The capital stock was divided into five thousand shares of the par value of one hundred dollars.Said organizers and directors subscribed for the same in equal amounts.On the eighteenth day of March, 1899, A. H. Linton brought an action in the district court against the defendant corporation to recover the sum of $31,006.86.On the twenty-second day of March, 1899, A. H. Linton filed a petition in bankruptcy on the federal side of the court against the defendant corporation, as a creditor thereof, alleging that at various times between the twenty-fifth day of March, 1895, and the 15th of March, 1899, he had loaned the said corporation money aggregating the sum of $31,006.86; that the corporation was insolvent, and that within four months next preceding the date of his petition the said corporation committed an act of bankruptcy, in that they had permitted one S. R. H. Robinson to institute a suit against them to obtain a writ of attachment, which was levied on the property of the defendant company, of the value of more that eight thousand dollars, and moneys in bank of more than seven hundred dollars, and that neither was the attachment vacated nor suit dismissed.He further alleged that on the eighteenth day of March he had commenced an action against the defendant corporation to recover the sum of $31,006.86, and that thereupon the said corporation, by resolution of its board of directors, admitted the justice of the claim, and admitted in writing the inability of the corporation to pay its debts, and its willingness to be adjudged a bankrupt.The schedule attached to said petition shows the debts to be the petitioner's claim in the amount aforesaid, to secure which the corporation had transferred to him a promissory note of the Rio Verde Canal Company, dated March 15, 1899, in the sum of $120,273.64, valued at one dollar; claim in favor of R. B. Langdon, deceased, $2,547.50, for moneys loaned and advanced; claim in favor of Donald Grant in the sum of $32,169.10, for moneys loaned and advanced; claim in favor of Cavour S. Langdon in the sum of $16,279.92, for moneys loaned and advanced; claim in favor of D. W. Grant in the sum of $16,084.55, for moneys loaned and advanced; claim in favor of James A. Fleming $495, for rent of office rooms.Robinson intervened, and contested the petition, and alleged that it was not a corporation, either organized for the purpose of or engaged in any trade or mercantile business, but was a corporation organized for and engaged in the work of construction only.The articles of incorporation of the defendant corporation provide as follows: "Know all men by these presents, that we, the undersigned incorporators, desiring to form a corporation under the Revised Statutes of the territory of Arizona relating thereto of March 8th, 1887, and all acts amendatory thereof, do hereby associate ourselves for that purpose, and have signed, adopted, and acknowledged the following articles of incorporation, to wit: Article 1.The names of the persons so associating themselves for the purpose of forming said corporation are Donald Grant, R. B. Langdon, A. H. Linton, D. W. Grant, C. S. Langdon, S. R. H. Robinson, and Samuel Grant.Art. 2.The name of this corporation shall be the Minnesota and Arizona Construction Company.Art. 3.The principal place for transacting the business of said corporation within the territory of Arizona shall be the city of Phoenix, but said corporation expressly reserves the right to itself to carry on a part of its business in the city of Minneapolis, in the county of Hennepin, state of Minnesota, and at such other places within such other territories and states of the United States, or foreign countries, as may hereafter be deemed expedient for the best interest of said corporation.Art. 4.The general nature of the business proposed to be transacted by said corporation is as follows: To make and enter into contracts for the construction and equipment of railroads, railroad bridges, toll roads, and toll bridges, canals for navigation, water power, irrigation, or other purposes, public, private, municipal, or domestic, either in the territory of Arizona, or in such other states and territories, or foreign countries, as said company may from time to time deem expedient, and for that purpose to undertake the construction and erection of railroads, turnpikes, railroad bridges, toll bridges, canals, dams, flumes, reservoirs, tanks, ditches, aqueducts, sewers, hydrants, or other hydraulic or electric appliances necessary for carrying on and transacting said business.Said company shall also be authorized and empowered to undertake the construction, erection, and equipment of telegraph and telephone lines, and the generating, creating, accumulating, storing, distributing, using, and selling electricity for any and all purposes to which the same is or may be applied, and the buying, constructing, owning, using, leasing, operating, and selling any and all motors, machinery, mechanical appliances, or devices by means of which electricity may be generated, stored, transmitted, applied, or used for any lawful purpose, and to use and operate the same; and for that purpose and to that end shall be empowered to buy, lease, rent, or otherwise acquire, appropriate, enjoy, and use lands, tenements, and hereditaments, water and water rights, and rights to use of water for water power, mining, manufacturing, irrigating or any other lawful purpose.And said company shall be fully authorized and empowered to sell, lease, rent, or otherwise dispose of any of said lands, tenements, hereditaments, or appurtenances, water, water rights, or rights to the use of water for water power, mining, manufacturing, irrigating, or other purposes, and to improve the same by erecting and constructing thereon such railroads, bridges, toll roads, toll bridges, canals, dams, flumes, reservoirs, ditches, aqueducts, sewers, or any other erections, constructions, or buildings necessary or expedient to enhance the value thereof, or to improve the same; and in like manner, and to the same extent, said corporation shall be empowered to sell, convey, lease, let, mortgage, or otherwise dispose of, charge or encumber such lands, tenements, and hereditaments, real and personal property and estate, or any of the same, or any right or interest therein, at pleasure, and in such manner and on such terms as such corporation or association may determine by order of its directors, or establish by its by-laws, and for that purpose to make and deliver, and in like manner accept and receive, all necessary and proper deeds, conveyances, mortgages, leases, and other contracts in writing obligatory, and to have and exercise all the necessary rights, franchises, muniments, states, powers, and privileges necessary to that end.And such association or corporation is authorized to loan money and funds to secure such loans by mortgage or other security, and to do and perform any and all things incidental to or expedient for the best interest of said corporation, and in carrying on...