Moore v. Bank of British Columbia

Decision Date02 January 1901
Docket Number12,941.
Citation106 F. 574
PartiesMOORE v. BANK OF BRITISH COLUMBIA et al.
CourtU.S. District Court — Northern District of California

Bishop & Wheeler and Pringle & Pringle, for complainant.

Smith &amp Pringle and Garber, Creswell & Garber, for respondents.

MORROW Circuit Judge.

In September, 1894, the Moore & Smith Lumber Company of San Francisco and the Bank of British Columbia entered into an agreement which recited that the Moore & Smith Lumber Company was indebted to the bank in the sum of $100,000, secured by a mortgage on the Port Discovery mill and certain lumber lands in the state of Washington, and in the sum of $70,000 secured by pledge to the bank of three notes of the Kings River Lumber Company, each for the sum of $56,250, and in the sum of $1,490, secured by pledge to the bank of a certificate of stock of the Pacific Pine Lumber Company, and that the Kings River Lumber Company was indebted to the bank in the sum of $10,000.

It was further recited that it was proposed among certain creditors of the Kings River Lumber Company to form a new corporation to be called the 'Sanger Lumber Company,' and that such creditors of the Kings River Lumber Company should assign their claims against the Kings River Lumber Company to the Sanger Lumber Company in exchange for the stock of the Sanger Lumber Company; that if such new corporation was formed, and the arrangement should go into effect among the creditors of the Kings River Lumber Company, then the bank would take stock in the Sanger Lumber Company, at its par value, to an amount equal to the three notes of the Kings River Lumber Company, the debt of $10,000 due the bank by the Kings River Lumber Company, and the debt of $1,490 due the bank from the Moore & Smith Lumber Company, amounting in all to $180,240, and that the bank would assign to the Sanger Lumber Company all of said notes and debts in payment for the stock of the new corporations. The agreement further provided, among other details, that the Moore & Smith Lumber Company would convey by a deed absolute, to the bank of its nominee, the Port Discovery mill and lands in the state of Washington, and that the bank would then cancel and deliver up to the company the note of the company for $100,000, which the bank held with that property as security, and would also cancel and deliver up to the company the note of the company for $70,000, which the bank held with the three notes for $56,250 each of the Kings River Lumber Company as security. It was further agreed that the bank would then open an account with the Moore & Smith Lumber Company, in which the company should be debited with the said sum of $100,000, and all taxes, insurance, and expenses connected with said mill and timber lands, and the sum of $81,491, being the actual cost to the bank of the stock of the Sanger Lumber Company, with interest on such amounts at the rate of 6 per cent. per year from July 1, 1894, and should credit the company with any dividends that might be declared on the stock of the Sanger Lumber Company, and with the proceeds of any sales of the stock or of the mill property or lumber lands made under the permission provided in the agreement. The company was also to be credited with all sums of money paid on said account, with interest on all credits at the rate of 6 per cent. per year. It was further provided that, at any time within five years from the date of the agreement (September 18, 1894), the company might pay the bank the balance of the debt shown by the account, and on such payment the bank should cause to be conveyed to the land all then remaining unsold of the mill and timber lands, and should transfer and deliver to the company all the stock of the Sanger Lumber Company remaining unsold. At the end of five years from the date of the agreement, the balance of the debt shown by the account should be due and payable by the company to the bank, and if not paid the bank might foreclose its lien for the same against said mill and timber lands, and might sell any or all of the stock of the Sanger Lumber Company then remaining unsold, at either public or private sale, with or without notice, and without any previous demand or notice to the company, and at any such sale might itself become a purchaser. It was further provided that the Moore & Smith Lumber Company would deliver to the bank, and cause to be transferred to it or to its nominees on the books of the corporation, sufficient stock of the Sanger Lumber Company, in addition to that which it was to take as security as provided in the agreement, to give the bank a majority of the issued stock and the control of the corporation. This latter stock to be delivered to the bank was not, however, to be held by the bank as security for the account of the Moore & Smith Lumber Company, but only in trust for the purpose of giving the bank the power to vote it. This agreement between the Moore & Smith Lumber Company and the bank contained other stipulations as to the account, but the foregoing are all that it will be necessary to refer to in determining the matter now in controversy.

Soon after this agreement was entered into the Sanger Lumber Company was formed as a corporation, with a capital stock of $600,000, divided into 24,000 shares, of $25 each. It appears that the number of shares of stock subscribed and actually issued was 23,849 1/4 shares, and among the shares so subscribed and issued were 7,209 1/2 shares issued on October 22, 1894, in certificate No. 1, in the name of Walter Young, trustee. The par value of these shares of stock amounted to $180,237.50, and were the shares which the Bank of British Columbia was entitled to receive under the terms of the agreement with the Moore & Smith Lumber Company. On December 17, 1894, certificate No. 1, for 7,209 1/2 shares of stock, was returned to the Sanger Lumber Company and canceled, and on that day two certificates were issued in lieu thereof, namely, certificate No. 69, for 7,208 1/2 shares, in the name of Walter Young, trustee, and certificate No. 70, for 1 share, in the name of Walter Young. On September 13, 1899, certificate No. 69, for 7,208 1/2 shares, was returned to the company and canceled, and one certificate, No. 142, for 5,000 3/4 shares, was issued; and on September 30, 1899, another certificate was issued for 2,207 3/4 shares, making the total of certificate No. 69 for 7,208 1/2 shares. The former of these last two certificates, namely, the one numbered 142, for 5,000 3/4 shares, is the property in controversy in this case. It appears, further, that prior to November 17, 1894, the Sanger Lumber Company issued the following certificates of stock in that corporation; No. 43, for 1,250 shares; No. 44, for 1,250 shares; No. 45, for 1,250 shares; No. 46, for 625 shares; No. 47, for 625 shares; and No. 48, for 625 3/4 shares,-- making a total of 5,625 3/4 shares. These shares were all issued in the name of A. D. Moore, trustee, for the Moore & Smith Lumber Company. On November 17, 1894, the Moore & Smith Lumber Company, by A. D. Moore, its president, executed three promissory notes to Frances J. P. Moore, the plaintiff in this case in the sum of $19,374.43 each, and as collateral security for the payment of the notes the company added to the notes a recital that it had deposited with Mrs. Moore the above-described shares of stock in the Sanger Lumber Company; that it would pay all assessments levied on the stock, and, failing to do so, the payee might pay the same, and add the amount, with interest to the notes. A. D. Moore, who, as president of the Moore & Smith Lumber Company, signed these notes, and deposited with Mrs. Moore the shares of stock of the Sanger Lumber Company, was also president of the latter company, and the husband of Mrs. Moore.

On December 19, 1894, certificate No. 43, for 1,250 shares certificate No. 45, for 1,250 shares, and certificate No. 48, for 625 3/4 shares, of the stock of the Sanger Lumber Company, making a total of 3,125 3/4 shares, were deposited with the Bank of British Columbia by Mrs. Moore. Prior to February 14, 1895, certificate No. 44, for 1,250 shares, appears to have been returned to the Sanger Lumber Company, and divided into two certificates, and reissued in certificate No. 91, for 450 shares, and certificate No. 92, for 800 shares, both certificates being issued in the name of A. D. Moore, trustee, for the Moore & Smith Lumber Company; and on February 14, 1895, this certificate No. 92, for 800 shares, was deposited with the Bank of British Columbia by Mrs. Moore, while on June 28, 1895, 1,075 shares were deposited with the same bank by Mrs. Moore, being certificate No. 91, for 450 shares, and certificate No. 46, for 625 shares. The total number of shares of the stock of the Sanger Lumber Company contained in these three deposits was 5,000 3/4 shares, Mrs. Moore retaining certificate No. 47 for 625 shares. For these shares of stock the bank issued to Mrs. Moore three receipts, the first dated December 19, 1894, for 3,125 (3,125 3/4) shares, the second dated February 14, 1895, for 800 shares, and the third dated June 28, 1895, for 1,075 shares. These receipts recited that these several certificates of stock so deposited were issued in the name of A. D. Moore, trustee, for the Moore & Smith Lumber Company, and so indorsed in blank by him as such trustee, and held by Frances J. P. Moore as collateral security for debts due to her by the Moore & Smith Lumber Company. With respect to the first deposit of certificates, aggregating 3,125 (3,125 3/4) shares, the receipt recited that the certificates were delivered by her to the bank with the consent of the Moore & Smith Lumber Company; that the stock might, at the option of the bank, be reissued in such other name as the bank might...

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3 cases
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    ... ... (Ala.) 21 So. 494; Co. v. Conklin, 126 F. 132; ... Ford v. Taylor, 137 F. 149; Moore v. Bank, ... (Cal.) 106 F. 574. It is respectfully submitted that ... this appeal should be ... ...
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    • October 5, 1903
    ...of British Columbia. Appeal from the Circuit Court of the United States for the Northern District of California. For opinion below, see 106 F. 574. suit was originally brought in the superior court of the city and county of San Francisco by Frances J. P. Moore against the Bank of British Co......

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