Liggett v. Glenn

• Decision Date: 13 June 1892
• Docket Number: 62.,61
• Citation: 51 F. 381
• Parties: LIGGETT v. GLENN. GLENN v. LIGGETT.
• Court: U.S. Court of Appeals — Eighth Circuit

51 F. 381

LIGGETT v. GLENN.

GLENN v. LIGGETT.

Nos. 61, 62.

United States Court of Appeals, Eighth Circuit.

June 13, 1892

Statement by SHIRAS, District Judge:

On the 12th of December, 1865, the general assembly of the state of Virginia adopted an act entitled 'An act to amend and re-enact an act to incorporate the Southern Express Company passed March 22, 1861, and to incorporate the National Express & Transportation Company;' it being therein provided that the company known by the latter name should be a corporation with authority to engage in the express and transportation business, with an authorized capital stock of $5,000,000, divided into shares of $100 each. The company organized under the provisions of the act, and subscriptions to its capital stock were made by many persons residing in different states. On the 8th day of August, 1866, Josiah Reynolds, a stockholder in the corporation, filed a bill in equity in the circuit court of the United States for the eastern district of Virginia, on behalf of himself and all other stockholders of the company, averring that the provisions of the charter of the corporation had not been observed by the officers of the company; that its assets had been wasted and misapplied; that the company was insolvent and unable to further carry on the business for which it was created; and for these reasons an injunction and appointment of a receiver was asked, to the end that the affairs of the corporation might be settled and the company be dissolved. On the 18th of August, 1866, an injunction was granted restraining the company, its directors and officers, from using the property of the company for any other purpose than carrying on the regular and legitimate express and transportation business for which the company was organized.

On the 18th of September, 1866, the board of directors of the corporation authorized and directed the execution of a general deed of assignment of the property of the company to trustees for the benefit of creditors; and on the 20th of September, 1866, the president of the company executed a general deed of assignment to John B. Hoge, John J. Kelly, and C. Oliver O'Donnell, as trustees, in accordance with the action of the board of directors previously had. On the 31st of December, 1866, the United States circuit court entered an order appointing Westel Willoughby a 'receiver of the said National Express & Transportation Company, and of the money, property and effects of the said National Express & Transportation Company, with all the powers, rights, and obligations usual in such cases, subject to the control of this court, until the affairs of said company be fully and finally closed up.'

On the 4th of December, 1871, there was filed in the chancery court of the city of Richmond, Va., by W. W. Glenn, a creditor of said express company, suing in his own behalf and in that of such other creditors as should become parties, a bill in equity against said corporation, wherein it was charged that said company was insolvent; that it was heavily indebted to various parties, including said W. W. Glenn; that 20 per cent. of the capital stock had been called in, but only a small part thereof had been paid; that the remaining portion of the capital stock was subject to assessment and collection for the payment of the debts of the corporation; that it was doubtful whether the trustees named in the general deed of assignment had the legal right to collect the portion of the capital stock not previously called for by the corporation itself; that the validity of the deed of assignment was questioned and in dispute; that the rights of the creditors were in danger, and that for their protection the question of the validity of the assignment should be set at rest; that the trustees should be required to render an account; that a receiver or trustee should be appointed, with full power to collect all assessments that might be made upon the capital stock, and otherwise care for and collect the assets and credits of said company. On the 4th of August, 1879, an amended and supplemental bill was filed in said cause by the administrator of W. W. Glenn, and on the 14th of December, 1880, after due service upon the corporation and the trustees named in the deed of assignment, the court entered a decree holding the deed of assignment to be valid, relieving the said trustees from further duty or responsibility, appointing John Glenn trustee in their place, and making an assessment upon the capital stock of 30 per cent., and authorizing and directing the said John Glenn, as trustee, to collect such assessment and to sue for the same in all jurisdictions.

On the 10th of December, 1880, four days before the entry of the decree by the city court of Richmond, the receiver appointed by the United States circuit court in December, 1866, filed a brief report in that court, in which he stated that none of the creditors had submitted their claims to him; that no action had been asked at his hands by any one for at least 10 years past; that he had only collected about $1,000, all of which had been expended in endeavoring to procure the books and papers of the company, in which efforts he had been unsuccessful. On the filing of this report by the receiver, and on the same day, the said circuit court of the United States in the case of Reynolds v. National Express & Transp. Co., entered the following order:

'Upon the report of receiver W. Willoughby being filed, on motion of the defendants, John Blair Hoge and J. J. Kelly, by John Howard, their counsel, it is adjudged, ordered, and decreed that the order of the 31st of December, 1866, filed on the 22d day of January, 1867, appointing a receiver in this case, be, and the same is hereby, vacated, annulled, and set aside, and said receiver, W. Willoughby, be discharged and exonerated, the injunction heretofore granted in this cause be dissolved, and this suit be dismissed.'

On the 27th of June, 1884, by an order duly made by the chancery court of the city of Richmond, Va., the cause pending before it was removed to the circuit court of Henrico county, Va., to be there proceeded with according to law; and on the 26th of March, 1886, a decree was entered in said cause by the last-mentioned court, making a further assessment and call for 50 per cent. of the capital stock of said corporation, and authorizing the trustee to enforce the collection thereof. In 1884, John Glenn, trustee under the appointment made by the chancery court of the city of Richmond, brought suit against John Liggett in the United States circuit court for the eastern district of Missouri, to collect from him the 30 per cent. assessment upon 63 shares of stock in said corporation, and on the 15th of July, 1885, the plaintiff Glenn suffered a nonsuit in that action.

On the 12th of July, 1885, the said Glenn, trustee, brought the present action in the United States circuit court for the eastern district of Missouri against John Liggett; and on the 14th of December, 1886, filed an amended petition in said action, wherein it is averred that said Liggett, in the year 1866, acquired by assignment 63 shares of the capital stock of the National Express & Transportation Company, and as the owner thereof became bound to pay the 30 and 50 per cent. assessments made upon said capital stock by the chancery court of the city of Richmond and the circuit court of Henrico county, Va. To this petition the said Liggett answered, denying the several allegations of the petition, and further pleading that the chancery court of the city of Richmond never had or acquired any jurisdiction of the subject-matter or of the parties defendant in the cause of W. W. Glenn v. National Exp. & Transp. Co., by reason of the pendency in the circuit court of the United States for the eastern district of Virginia of the cause of Reynolds v. Said Express Co., and the proceedings had therein; that, more than 10 years having elapsed since the entry of the decree or order in said cause, this action is barred by the provisions of the statutes of Missouri.

The case was tried before the court, a jury being waived, and, judgment being in favor of the plaintiff, the defendant, Liggett, brings the case before this court, assigning error in several particulars, but which can be all considered under four general heads.

The decrees of the state court of Virginia are void, because said courts were without jurisdiction to pass them.

Wiswall v. Sampson, 14 How. 52; Peale v. Phipps, Id. 368-374; Vaughan v. Northup, 15 Pet. 1; Gaylord v. Railroad, 6 Biss. 286; Barton v. Barbour, 104 U.S. 126; Heidritter v. Oilcloth Co., 112 U.S. 294-302, 5 S.Ct. 135.

The federal court for the district of Virginia had jurisdiction and lawful authority to render the decree in the suit of Reynolds v. National Exp. & Transp. Co., of date December 31, 1866, and that decree is not open to collateral attack in this cause.

2 Wat.Corp.par. 356; Stevens v. Davison, 18 Grat. 828; Thompson v. Greeley, (Mo. Sup.) 17 S.W.Rep. 962; Buck v. Insurance Co., 4 Fed.Rep. 849; In re Suburban Hotel Co., L.R. 2 Ch.App. 737, per Lord CAIRNS loc. cit. 750; Mor. Priv. Corp. (2d Ed.) Secs. 284, 285; Beach, Rec. Sec. 404; Lawrence v. Insurance Co., 1 Paige, 587; Freem. Judgm. Sec. 124; High, Rec. Sec. 203; Greeley v. Bank, 103 Mo. 212, 15 S.W.Rep. 429; Ames v. Trustees, 20 Beav. 353; Vermont, etc., R. Co. v. Vermont Cent. R. Co., 46 Vt. 795, and cases there cited; Russell v. Railway Co., 3 Macn.& G. 104; Beverley v. Brooke, 4 Grat. 187; Jay v. De Groot, 17 Abb.Pr. 36, note; Barbour v. Bank, 45 Ohio St. 133, 12 N.E. 5; Neall v. Hill, 16 Cal. 146; Murray v. Vanderbilt, 39 Barb. 147; Mining Co. v. Edwards, 103 Ill. 475; Cook, Stocks, Sec. 648; Dodge v. Woolsey, 18 How. 341....