Mecke v. Valley Town Mineral Co.

• Decision Date: 12 September 1898
• Citation: 89 F. 209
• Parties: MECKE v. VALLEY TOWN MINERAL CO. et al.
• Court: U.S. Court of Appeals — Fourth Circuit

89 F. 209

MECKE v. VALLEY TOWN MINERAL CO. et al.

United States Circuit Court, W.D. North Carolina.

September 12, 1898

J. H Dillard, for plaintiff.

T. P Axley and Merrimon & Merrimon, for defendants.

SIMONTON Circuit Judge.

This case comes up on a motion to remand it to the state court. The plaintiff, Herman Mecke, filed a complaint in the superior court of Cherokee county, N.C., in behalf of himself and all others, creditors of the Valley Town Mineral Company who will come in, etc., against that company, the Roessler &amp Hasslacker Chemical Company, and R. L. Cooper, Ben Posey, and J. P. Abernathy, trustees. It alleges: A purchase by A. H. Mugford and R. P. Getty, in the year 1895, from J. W. Cooper, G. K. Welch, and others, of certain lands in Cherokee county, N.C., for the sum of $10,000. For this they paid $5,000 in each, and gave notes for the remainder, secured by deed of trust, in which the defendants Cooper, Posey and Abernathy were trustees. That these lands were supposed to contain minerals, especially talc, and that, in order to mine the same successfully, Mugford and Getty on 15th October, 1895, organized a corporation, under the laws of the state of New Jersey, known as the Valley Town Mineral Company, a defendant, of which Mugford was made manager; Getty, superintendent; and plaintiff, the president. That on 2d October, 1895, Mugford and Getty executed to plaintiff a paper writing giving him a lien on these lands to secure him his advance of $5,000 towards the purchase money; plaintiffs agreeing at the same time to furnish other moneys to pay off the notes for the unpaid purchase money, for $2,500 each, due one and two years after date, one of which has been paid, but by whom is not stated. That subsequently plaintiff assigned all his interest in said paper writing to the Valley Town Mineral Company, it assuming to pay the said several notes for the purchase money. That on 26th September, 1896, Mugford and Getty conveyed all their interest in said lands to the Roessler & Hasslacker Chemical Company, a corporation of the state of New York, without offices, officers, or agents in the state of North Carolina. This conveyance is charged to have been as a security merely. That plaintiff from time to time advanced to the Valley Town Mineral Company other large sums, aggregating $19,000, which is still due to plaintiff, as also his salary of $1,000, and that the Valley Town Mineral Company is largely indebted to other persons, and is insolvent. That the only property of the Valley Town Mineral Company is the lien for $5,000 held by plaintiff, and assigned to it, and a lease on certain other mineral lands. The complaint then goes on to show the nature and character of talc mining, the inexpediency of stopping the work, the advantages of continuing it, and asks that a receiver be appointed, with authority to operate the mines, and, if need be, to borrow money on receiver's certificates. The prayer for judgment is: (1) That a receiver be appointed, with full power to conduct and operate the mines and dispose of the product, and with further power to borrow money on receiver's certificates, which shall constitute a first lien over all other liens on the property. (2) For judgment for plaintiff,-- presumably for $22,322.15, with interest. (3) For leave to receiver to sue. (4) For general relief.

It will be observed that this is a creditors' bill against the Valley Town Mineral Company. It asks for a receiver for this company. It does not pray a sale of the land, but, on the contrary, asks that the operations of the company be continued by the receiver. It prays no judgment against any party but the Valley Town Mineral Company. The summons was issued returnable to the spring term of Cherokee county, at which term the complaint was filed. The summons was served upon the Valley Town Mineral Company, by a copy of its treasurer. Service was accepted by Posey, Cooper, and Abernathy, trustees; and a copy summons was served upon a director of the chemical company, of which some notice will be hereafter taken.

Under the practice in North Carolina, the complaint must be filed during the first three days of the term, and defendants must answer some time during that term. During the term, and therefore before time for answering had expired, plaintiff moved for and obtained leave to file an amendment to his complaint. In that amendment, after reaffirming every allegation of the original complaint, he avers: That the Valley Town Mineral Company, finding itself without sufficient capital to conduct its business, and not being able to get any more advances from plaintiff, sought the aid of the Roessler & Hasslacker Chemical Company. That the result of this was an agreement between the two corporation, to which also Getty and Mugford were parties, by which the chemical company assumed all the obligations of the Valley Town Mineral Company which plaintiff had theretofore assumed, and took from the mining company, from plaintiff, and from Getty and Mugford an assignment of their interest in the mining lands. The chemical company further agreed to advance all moneys needed by the mineral company in its operations; that the chemical company should handle all the products of the mineral company, and share in the profits, thus constituting it a partner in the business. That, upon complaint on part of the plaintiff as to the terms of the contract, an agreement was prepared by the attorney of the chemical company, who was also a director therein, which agreement was in the name of the Valley Town Mineral Company, and in which it was declared that the indebtedness of that company to plaintiff was $19,813.59, with interest thereon from that time (15th October, 1896) at 6 per cent. per annum. The plaintiff then renews the prayer for judgment in his original complaint, and demands judgment against the Roessler & Hasslacker Chemical Company for said amount, and for general relief. When leave to amend was applied for and granted, plaintiff was allowed 30 days within which to file and serve his amendment, and defendants were allowed 60 days within which to answer the same. Within this period of 60 days the Roessler & Hasslacker Chemical Company filed its petition for removal into this court, with a proper bond. The term of the court of Cherokee county having expired, the petition was presented at chambers to the judge at Asheville, Buncombe county; and an order was made, entitled as of the superior court of Cherokee county, for the removal of the cause into this court. An appeal was taken from this order to the supreme court of North Carolina, and it was reversed. 29 S.E. 781. The record, however, having been transmitted to this court, this motion to remand was made.

The...