Morrill v. Little Falls Manufacturing Co.
| Decision Date | 01 June 1893 |
| Citation | 55 N.W. 547,53 Minn. 371 |
| Parties | Ashley C. Morrill v. Little Falls Manufacturing Co. et al |
| Court | Minnesota Supreme Court |
Argued May 12, 1893.
Application for reargument denied June 16, 1893.
Appeal by defendants, Little Falls Manufacturing Company, Charles A Bullen and Charles F. Mayhew, from a judgment of the District Court of Morrison County, D. B. Searle, J., entered June 11 1892, decreeing that neither of them had any title to, or estate in, a large amount of lands and town lots in and near Little Falls in said county.
The plaintiff, Ashley C. Morrill, brought this action, November 15, 1888, under 1878 G. S. ch. 75, § 2, and Ex. Sess Laws 1881, ch. 81, against the defendants above named, and others, and also all other persons or parties unknown claiming any right, title, estate, lien or interest in the real estate described in the complaint. A notice of the pendency of the action was filed for record and published with the summons. An answer was filed in behalf of the three defendants above named, denying plaintiff's title, but asserting no title in the defendants, or in any of them. On August 24, 1889, the defendants Bullen and Mayhew were permitted by order of the court to serve an amended answer. The plaintiff replied and afterwards moved for judgment on the pleadings. The court granted the motion, judgment was entered and defendants appealed. That judgment was reversed, 46 Minn. 260, and the issues were tried October 27, 1891. Findings of fact and conclusions of law were made and filed April 23, 1892, on which judgment was entered for the plaintiff June 11, 1892, decreeing that he was the owner in fee of the real estate described in the complaint, and that defendants had not, nor had either or any of them, any right, title or interest in, or lien upon, the property or any of it, and that neither Bullen nor Mayhew was entitled to answer or defend for the corporation, and that they by their acts had estopped themselves from in any manner questioning the plaintiff's title. They made and settled a case containing exceptions and moved for a new trial, which was denied November 5, 1892.
The Little Falls Manufacturing Company was a corporation created by Act of the Legislature of the Territory of Minnesota, Laws 1856, ch. 138, p. 221. It was empowered to buy, hold and sell real estate, and to construct a dam across the Mississippi River at Little Falls, create a water-power, build mills, and carry on manufacturing and other business. Its capital stock was $ 100,000, divided into shares of $ 100 each. All the capital was taken and fully paid in. It constructed the dam, built a mill, acquired the title to all the real estate in question in this action, and made extensive improvements. Reverses followed. The dam and mill were swept away in a flood. The panic of 1857, and the war of 1861, enhanced the difficulties. The organization of the corporation was kept up until 1864, when both the president and secretary died, and from that time until 1881, no effort was made to elect officers or hold meetings. About this time the property advanced rapidly in value and the plaintiff took measures to acquire title to it. He procured one Samuel Thayer who owned, or held proxies for, one hundred and fifty shares of the stock, to go on the day provided by the by-laws for holding the annual meeting of stockholders, and to alone elect a board of directors, to each of whom he transferred one share of his stock. They elected him president and one Reuben Tomlinson, secretary, and they conveyed the property to William Eustis, and Eustis conveyed it to Thayer, and Thayer conveyed an undivided half to the plaintiff. Afterwards in January, 1883, Thayer quitclaimed the whole to the plaintiff and assigned to him his stock, and he was made president in Thayer's stead. These deeds were not recorded, and other stockholders appeared and attempted to gain possession of the corporation, and its property, now worth many thousands of dollars. This contest between the two factions is not yet closed. Other and subsequent facts are stated in the opinion. The discussion here was largely upon the facts.
Judgment reversed, and new trial ordered.
W. F. Bailey and F. W. Lyons, for appellants.
Taylor, Calhoun & Rhodes, for respondent.
OPINION
This was the ordinary statutory action to determine adverse claims to real property, the plaintiff alleging generally that he was the owner in fee and in possession, and that the defendants claimed some interest adverse to him. Bullen and Mayhew, as stockholders, were admitted to defend on behalf of the defendant corporation, for reasons assigned when the case was here on a former appeal. 46 Minn. 260, (48 N.W. 1124.)
Their answer, in brief, is that the corporation is the owner of property in controversy; that the interest claimed by plaintiff is by virtue of a deed purporting to have been executed by the corporation to one Eustis on July 11, 1882, and recorded June 18, 1883, which deed they attack on two grounds: (1) That the party by whom it was executed was not an officer of the corporation, and had no authority to execute conveyances in its behalf; and (2) that it was executed without consideration, for the purpose of defrauding the corporation out of the property. On the first ground, if established, the deed would, of course, be absolutely void; on the second ground, it would be voidable only. Upon the trial it was admitted that all the property in dispute, except one tract called the "Hayes Land," formerly belonged to the corporation; hence the plaintiff had to deraign his title from that source. For that purpose, in addition to the deed or deeds executed in 1882, (and which it appears did not cover all the property,) the plaintiff introduced in evidence: (1) Sundry conveyances purporting to have been executed in 1886 and 1887, by or on behalf of the corporation, to various parties to whose rights he had succeeded by mesne conveyance; (2) the records of various sales on execution to one Herrick, (to whose rights he had also succeeded,) on judgments against the defendant corporation, and which have been the subject of much litigation in this court. See Herrick v. Ammerman, 32 Minn. 544, (21 N.W. 836;) Herrick v. Churchill, 35 Minn. 318, (29 N.W. 129;) Herrick v. Morrill, 37 Minn. 250, (33 N.W. 849.)
The attorneys have stipulated into this case the record in the case last cited, but we do not feel called upon to wade through it, to ascertain which of these execution sales were valid, or what part of the property they covered, even if the record contained (which is doubtful) the data from which these facts could be ascertained.
All we deem necessary to consider, for the purpose of a determination of this appeal, are the conveyances purporting to have been made by the corporation to plaintiff's grantors in 1882 and in 1886 and 1887, upon which alone the court below seems to have based its decision in favor of the plaintiff.
To a full understanding of the case, it is necessary to refer briefly to the history of the Little Falls Manufacturing Company. It was a corporation organized in 1856, under a special charter, (Laws 1856, ch. 138,) with power to adopt by-laws determining the amount of its capital stock, and providing for the transfer thereof. It was made the duty of the president, under the authority of the by-laws, or under the direction of a majority of the directors, to execute conveyances, etc., in behalf of the corporation. The corporation adopted by-laws, which provided, among other things, that the shares of stock should be transferable only on the books of the company at Little Falls, in person or by attorney, legally authorized, in presence of the president or secretary, on surrender of the certificate of stock, and that the secretary should certify on the certificate that the transfer had been made. They also provided that the directors should be elected at the office of the company at Little Falls, either in person or by proxy, on the second Monday of August in each year, all votes to be given in proportion to the amount of stock. There was nothing in the by-laws requiring any notice to be given of this annual meeting. The company acquired a considerable amount of real estate in or near what is now Little Falls, and continued in business, or at least kept up its organization, until 1864, by which time it seems to have become hopelessly insolvent, its business wholly abandoned, and the organization practically defunct without any effort on part of any of the stockholders to revive it, or to look after its property, until 1881, -- a period of about seventeen years. In the mean time plaintiff, who as yet had no connection with the company, had been attempting to acquire title to its lands through tax titles, and through the Herrick execution sales. Finally, in 1881, and at the suggestion of plaintiff, one Thayer, for himself and as proxy for certain other stockholders, went to Little Falls, on the second Monday of August, (the time and place fixed by the by-laws for the annual meeting,) and cast the votes of himself and those for whom he was proxy for a board of directors. Thayer was the only person present at the meeting. The same thing was done on the second Monday of August, 1882, by one Tomlinson, who was the only stockholder who was personally present. During these years Thayer acted as president of the company, and, as such, in June, 1882, executed in its behalf the deeds to Eustis already referred to. In June, 1883, a special meeting was called, when, for the first time, the appellants Bullen and Mayhew appeared on the scene; but, as the regularity of this meeting is not here involved, it may be passed over without...
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