Leathers v. Janney

• Decision Date: 01 December 1889
• Docket Number: 10,392
• Court: Louisiana Supreme Court
• Parties: THOMAS P. LEATHERS v. JOHN JANNEY ET ALS

6 So. 884

41 La.Ann. 1120

THOMAS P. LEATHERS v. JOHN JANNEY ET ALS

No. 10,392

Supreme Court of Louisiana

December 1, 1889

APPEAL from the Civil District Court, for the Parish of Orleans Rightor, J.

O. B Sansum, for Plaintiff and Appellant.

Richard De Gray, on same side.

Farrar Jonas & Kruttschnitt, for Defendants and Appellees.

OPINION

FENNER, J.

Prior to June, 1885, there existed three distinct corporations viz: the New Orleans, Baton Rouge and Bayou Sara Packet Company, the Merchants' and Planters' Packet Company, and the Coast and Mississippi River Packet Company, each of which owned and operated a steamboat.

Desiring to put an end to disastrous competition, the stockholders in these three corporations, agreed to form a new corporation which should acquire the ownership of all three boats at valuations fixed in advance and run them in a common interest.

Accordingly on June 22, 1885, a new corporation was formed in accordance with the laws of the State, styled the Planters' and Merchants' Packet Company, having a stock equal to the combined valuation of the three boats above mentioned, viz: $ 110,000 in shares of $ 100 each, and its objects are declared to be "the building, running, purchasing, chartering, hiring, running and selling one or more steamboats, etc."

On June 30, 1885, at a special meeting of the stockholders and directors of the New Orleans, Baton Rouge and Bayou Sara Packet Company, a resolution was adopted authorizing John J. Brown, manager, to sell the steamboat Ed. J. Gay to the Planters' and Merchants' Packet Company, for the sum of fifty thousand dollars in full paid up stock of said company.

On the same day, in pursuance of above resolution, Brown, Manager, executed a deed of sale of the Gay to the Planters' and Merchants' Company, upon the consideration, by him declared in the act, "of fifty thousand dollars in full paid stock of the Planters' and Merchants' Packet Company, to represent which stock the said company have issued and delivered to me on behalf of said New Orleans, Baton Rouge and Bayou Sara Packet Company, certificates for 500 shares of the amount of $ 100 each of said capital stock paid up, the receipt of which I do hereby acknowledge, etc."

John Janney, the defendant, was a stockholder in the New Orleans, Baton Rouge and Bayou Sara Packet Company, and in 1884 had delivered to Thomas P. Leathers, to whom he was indebted, the certificate for 120 shares of said stock, in pledge.

The stock received from the Planters' and Merchants' Company in payment for the Ed. J. Gay, was distributed among the stockholders of the New Orleans, Baton Rouge and Bayou Sara Packet Company, by Brown, or under his direction, and Janney received the whole amount thereof coming to him, without being required to produce the certificate held in pledge by Leathers.

Brown was the manager of the New Orleans, Baton Rouge and Bayou Sara Packet Company, and was also chosen as manager of the new company.

The plaintiff filed the petition in this suit against John Janney, the New Orleans, Baton Rouge and Bayou Sara Packet Company and the Planters' and Merchants' Packet Company. This petition first sets forth the indebtedness of Janney and the pledge of the stock, and then sets up that Brown was president and manager of the New Orleans, Baton Rouge and Bayou Sara Packet Company, and that he was also president and manager of the Planters' and Merchants' Packet Company.

That, June 30th, 1885, Brown, as the manager of the New Orleans, Baton Rouge and Bayou Sara Packet Company, pretended to convey and sell all the property of that corporation, to wit: the steamer Edward J. Gay, to the Planters' and Merchants' Packet Company for 50,000 shares of the capital stock of the last named company, and that nothing was in fact paid by the latter to the former corporation.

That Brown being at the same time manager and president of both corporations, acted in the double capacity of seller for the one and buyer for the other corporation (10).

That the New Orleans, Baton Rouge and Bayou Sara Packet Company had no property but the steamer Edward J. Gay; and the sale thereof was ultra vires and void, and that it was a fraud against plaintiff's rights in the premises (11).

The petition prays citations against all the defendants and judgment against Janney for $ 4350 83, with interest from September 8th, 1886, and for a lien and privilege on the steamboat and a lien and privilege on all the property of the Planters' and Merchants' Packet Company, and that the same be seized and sold to pay plaintiff's demand, interest and costs, unless property of the defendant Janney be found to satisfy the demand, and for general relief (12).

The plaintiff recovered a judgment against Janney with lien and privilege on 120 shares of the stock of the New Orleans, Baton Rouge and Bayou Sara Packet Company, but was denied other relief, from which judgment he appeals.

Let us examine the grounds as set forth in the petition on which the claim against the Planters' and Merchants' Company and its property is based. They are:

1. That the sale of the Gay was pretended and fictitious. The sale was real, for a valuable consideration of amply sufficiency and...