McGeorge v. Bigstone Gap Imp. Co.

• Citation: 88 F. 599
• Parties: McGEORGE et al. v. BIGSTONE GAP IMP. CO.
• Decision Date: 27 July 1898
• Court: U.S. Court of Appeals — Fourth Circuit

88 F. 599

McGEORGE et al. v. BIGSTONE GAP IMP. CO.

United States Circuit Court, W.D. Virginia.

July 27, 1898

H. S K. Morison, for petitioners.

Bullitt & Kelly, for defendant.

PAUL District Judge.

These petitions, and the evidence taken thereon, present the following facts:

On May 27, 1893, the bill was filed in this suit, and the following persons were named as plaintiffs, to wit: William McGeorge Jr., who sues in his own right and as trustee, etc., John C Bullitt, Samuel Dickson, Joseph I. Doran, Joseph B. Altimus George Burnham, Charles C. Harrison, Dr. William Pepper, John H. Dingee, Sabin W. Colton, Jr., and Henry Lewis, all citizens of the state of Pennsylvania, suing for themselves and all other creditors and stockholders who would become parties and contribute to the cost,-- against the Bigstone Gap Improvement Company (hereafter called the 'Improvement Company '), a corporation under the laws of Virginia. The bill alleged mismanagement of the business of the defendant company, its insolvency, and prayed for the appointment of a receiver. Temporary receivers were appointed, a temporary injunction order issued, and a rule awarded requiring the defendant company to appear on the 13th of June, 1893, to show cause, if any, why the temporary appointment of receivers should not be made permanent. The rule to show cause was heard on the 13th of June, 1893, and on September 4, 1893, a decree was entered by Judge Goff dissolving the injunction, providing for the settlement of their accounts and the discharge of the temporary receivers, and dismissing the bill at the costs of the complainants. At the May term, 1895, of this court, a decree was entered against the complainants McGeorge, Altimus, Burnham, and Lewis for the whole of the costs of the suit, and execution was awarded in favor of the defendant company. The names of Bullitt, Dickson & Dale, a law firm of Philadelphia, appeared on the bill as solicitors for the plaintiffs. These attorneys appeared by counsel before the court on the 13th of June, 1893, and stated that their names had been used without their authority; and, on motion, their names as attorneys were withdrawn from the record. On the 4th of September, 1893, in the decree entered as of that date, the names of J. C. Bullitt, Joseph I. Doran, and Samuel Dickson were stricken from the bill for the reason that they had been made complainants without their authority. At the October term, 1893, for the same reason, the names of John H. Dingee and Sabin W. Colton, Jr., were stricken from the bill. And subsequently the names of Dr. William Pepper and Charles C. Harrison disappeared from the proceedings in the cause,-- Pepper's by death, and Harrison's by request. Thus, when the decree for costs was entered at the May term, 1895, the only remaining complainants on the record were the said William McGeorge, Jr., Joseph B. Altimus, George Burnham, and Henry Lewis, against whom the decree was entered.

The evidence shows that, a short time prior to the institution of the suit, Mr. M. B. Wood, of Bristol, Va., who held some of the bonds and stock of the Bigstone Gap Improvement Company, had a conference with the complainant McGeorge about bringing a suit and having receivers appointed for the Improvement Company; that, in that conference, McGeorge said he wished F. S. Blair, a prominent attorney of Wytheville, Va., to be employed as counsel. McGeorge gave Wood the names of the persons to be made parties complainant in be bill. After the conference between Wood and McGeorge, the latter returned to Philadelphia; and shortly afterwards he had a conference with his co-trustee, Samuel Dickson, in a deed of trust executed by William D. Hones to secure a loan (which trustees held some of the bonds of the Improvement Company as collateral for said loan), as to the propriety of joining the people they represented in the proposed suit; having previously agreed with Wood that, if he (McGeorge) and Dickson agreed as to the appointment of a receiver for the Improvement Company, he (Mcgeorge) was to telegraph Wood, using a cipher message, saying, 'Wheat is going up.' After McGeorge had met and talked with Dickson on the subject, he wrote to Wood as follows:

'Philadelphia, May 22d, 1893.

'Hon. M. B. Wood-- My Dear Judge: I had an opportunity to-day, for the first time to talk over the matter of the receivership of Big S.G. Imp. Co. with Mr. Dickson. Dr. Bailey was present. Mr. Dickson wanted us to agree on J. K. Taggart for receiver. He thought the V.C.& I. Co. would insist upon that as a sine qua non. We suggested Major Wood, and it was finally agreed that Major Wood and J. K. Taggart should be made receivers. In that event it would be proper to have the Virginia Coal & Iron Co. made parties, as Taggart would represent them. I did not dare to telegraph all this, and so write promptly. Yours, very truly,

'(Signed) Wm. McGeorge, Jr.'

On the 25th of May, 1893, Mr. Blair, in order, he says, to be sure that the list of names was correct, sent from Richmond, Va., to McGeorge the following telegram: 'May 25, 1893.

'To William McGeorge, Jr., Bullitt Building, Philadelphia, Pa.: If Judge Goff will appoint Wood and Taggart on a bill by you as trustee, and any other noncitizens, must I file it and get order? Give names of plaintiffs.

'F. S. Blair.'

The complainant McGeorge not being in the city of Philadelphia at the time, the telegram was delivered to his son, Arthur McGeorge, who answered as follows:

'Dated Philadelphia, Pa., 26 May, 1893.

'To F. S. Blair, Richmond, Va.: McGeorge in New York. Dickson says take instructions from Judge Wood.

Arthur McGeorge.'

Wood having previously furnished Blair with the list of names given him by McGeorge, Blair presented the bill, with the names inserted, to Judge Goff; and the temporary receivers were appointed, and the injunction granted.

For convenience, the court will consider first the joint petition of Altimus, Burnham, and Lewis. The evidence, taken in connection with this petition, establishes certain facts about which there can be no question. It is clearly shown that the petitioners, Altimus, Burnham, and Lewis, who were made complainants in the bill filed in this suit, did not themselves employ counsel to bring the suit, or authorize the same to be brought, either themselves or through McGeorge that they did not know such a suit had been instituted until over two years after the suit had, by decree entered by Judge Goff, been dismissed at the costs of the plaintiffs; that, on learning that they had been made parties complainant in this suit, they took immediate steps to have their names stricken from the record, and to be relieved from the payment of costs, and from any other liability accruing therein, on the ground that the use of their names as complainants was without their authority, and was an imposition upon the court. Of these three petitioners, Altimus testifies that the first time he heard of the pendency of the suit was on October 15, 1895. Burnham and Lewis testify that they knew nothing of the institution of such a suit until December 9, 1895. McGeorge testifies that prior to these dates he had not spoken to any of them about the institution or pendency of the suit. But counsel for the defendant insist that McGeorge had authority to institute this suit in the name of himself, Altimus, Burnham, and Lewis, on the ground that these persons were trustees in what is known as the 'Altimus-Benson-McGeorge Trust.' Under this trust deed, entered into in 1883, it appears that eight or ten persons owning undivided interests in certain lands in Virginia and Kentucky, for the purpose of being able to handle it conveniently, agreed to convey it to these trustees,-- the conveyance to be made to the trustees as individuals; that the public was not to know that they held the land in trust; that the trustees were to have full power to sell, lease, and convey these lands, and full power to bring and defend any and all suits in reference to the trust property; that a part of this trust property was sold to ...