Lyman v. Northern Pac. Elevator Co.

• Decision Date: 29 August 1894
• Citation: 62 F. 891
• Parties: LYMAN v. NORTHERN PAC. ELEVATOR CO. (CULLIFORD, Intervenor).
• Court: U.S. District Court — District of Minnesota

62 F. 891

LYMAN v. NORTHERN PAC. ELEVATOR CO. (CULLIFORD, Intervenor).

United States Circuit Court, D. Minnesota.

August 29, 1894

John B Sanborn, for intervenor.

Davis Kellogg & Severance, for defendant Northern Pac. Elevator Co. and for M. J. Forbes, Receiver.

WILLIAMS District Judge.

This cause has been heard upon a motion by the intervenor for judgment upon the petition of intervention and answer. The following facts appear:

On or about August 15, 1890, the Northern Pacific Elevator Company was a corporation created under and by virtue of the laws of the state of Minnesota, owning a line of elevators through the states of Minnesota, North Dakota, Idaho, Washington, and Oregon; and being in need of money to carry on its business and owing a large amount of money, the stockholders of the company made and entered into an agreement with each other whereby they subscribed for a loan to said company for $275,235, pro rata, according to the number of shares held by each, and signed an agreement, agreeing to take the company's note at 12 months, bearing 7 per cent. interest per annum. The agreement was in the following words and figures.

'Minneapolis August 15th, 1890.

'The undersigned stockholders in the Northern Pacific Elevator Company hereby each agree to loan to said company our pro rata share of the sum of two hundred and seventy-five thousand two hundred and thirty-five dollars, which the number of the shares held by each bears to the total number held by the signers thereof. The company's note, at twelve months, with interest at seven per cent. per annum, shall be issued for the loan, and paid out of the first net earnings of the company before dividend. Owners of ten thousand shares to subscribe to make this binding.'

The said agreement was signed by all the stockholders making said loan, exceeding 10,000 shares. One of the stockholders so signing said agreement was L. Fletcher, and he received the company's note therefor, which was renewed, and which said original note and renewal note read as follows: '1,996.74 Minneapolis, Minn., Sept. 1st, 1892.

'One year after date, we promise to pay to the order of L. Fletcher nineteen hundred and ninety-six 74/100 dollars at our office in Minneapolis, Minnesota, in accordance with the terms of his subscription to the loan of Aug. 15, 1890, with interest at the rate of 7%, payable semiannually.

'(Signed) Northern Pacific Elevator Company,

'By C. H. Graves, President.'

The intervenor is the immediate indorsee of Fletcher.

It further appears that the company is insolvent, that there have been no net earnings, and that the debts exceed the property by several hundred thousand dollars. On this state of facts, I think the intervenor cannot recover.

At the date of the agreement of August 15, 1890, and of the note of which the one under present consideration is a renewal, the...