Pew Abic Min Co v. Mason Marcus v. Same

• Decision Date: 16 May 1892
• Citation: 145 U.S. 349,36 L.Ed. 732,12 S.Ct. 887
• Parties: PEW ABIC MIN. CO. v. MASON et al. MARCUS v. SAME
• Court: U.S. Supreme Court

145 U.S. 349

12 S.Ct. 887

36 L.Ed. 732

PEW ABIC MIN. CO. v. MASON et al.

MARCUS

v. SAME.

May 16, 1892.

STATEMENT BY MR. JUSTICE BREWER.

These cases spring out of the same litigation, and may be considered together. The preliminary facts are these: On April 4, 1853, the Pewabic Mining Company was organized as a corporation or mining copper, under the laws of the state of Michigan. The term of the corporation was for 30 years, and expired April 4, 1883, The capital stock at that time consisted of 40,000 shares of $25 each. Notwithstanding the termination of the life of the corporation, the directors then in office continued its business without change. On March 26, 1884, at a meeting of the stockholders, by a vote of 27,919 against 6,754 shares, the directors were authorized to dispose of the property at a sum not less than $50,000, and a sale was directed to be made to a new corporation, to be organized on the basis of 40,000 shares, the shares in the old to be exchanged in full payment for shares in the new, the stockholders in the old, not electing to join the new, to receive their pro rata interest in money. The present appellees were stockholders in the old corporation, owning 2,650 shares, and protested against these resolutions. A new corporation was organized, but, before the transfer had been made, the appellees filed their bill in the circuit court of the United States for the western district of Michigan, the purpose of which was to enjoin the proposed transfer of the property of the old to the new corporation, and to have it sold at public auction, and the proceeds divided ratably among the stockholders. This bill was filed March 31, 1884. On final hearing a decree was entered sustaining the prayer of the bill, and directing a sale of the property at public vendue, for cash, to the highest bidder, and referring the cause to Peter White as special master, with power to ascertain the assets and debts of the mining company, and directing that, after ascertaining and making report thereof to the court, he should proceed to sell the property at public vendue. 25 Fed. Rep. 882.

From that decree an appeal was taken, and thereafter this court sustained the decree so far as it ordered a sale. In reference to the accounting before the master, it, however, directed that it should be widened so as to include the proceedings of the directors since the dissolution of the corporation. The opinion of this court was announced January 13, 1890. 133 U. S. 50, 10 Sup. Ct Rep. 224. The mandate was issued February 6, and was filed in the circuit court on March 14, 1890. In the execution of the decree a sale was made by the master on the 24th of January, 1891,—more than a year after its affirmance by this court,—the purchasers being Thomas Henry Mason and William Hart Smith, two of the original plaintiffs, and the price paid being $710,000. The sale was confirmed; and to set aside the confirmation and to open the sale were the matters sought to be accomplished by the three appeals taken in these two cases.

[Statement of Case from pages 351-354 intentionally omitted] Thos. H. Talbot, R. M. Morse, Jr., I. L. Stackpole, and Chas. E. Hellier, for appellants.

[Argument of Counsel from pages 354-355 intentionally omitted] Don M. Dickinson and Alfred Russell, for appellees.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.

The question in this case is whether the master's sale shall stand. It may be stated generally that there is a measure of discretion in a court of equity, both as to the manner and conditions of such a sale, as well as to ordering or refusing a resale. The chancellor will always make such provisions for notice and other conditions as will, in his judgment, best protect the rights of all interested, and make the sale most profitable to all; and after a sale has once been made, he will, certainly before confirmation, see that no wrong has been accomplished in and by the manner in which it was conducted. Yet the purpose of the law is that the sale shall be final; and to insure reliance upon such sales, and induce biddings, it is essential that no sale be set aside for trifling reasons, or on account of matters which ought to have been attended to by the complaining party prior thereto. And in this respect regard may properly be had to all that has transpired before, for the conduct of the parties, their acts and omissions, may largely interpret their action at the time of the sale. In order, therefore, to understand fully the merits of these present appeals, we must notice the course of the litigation and the conduct of the parties prior to the sale.

In 1883 the Pewabic Mining Company ceased to exist. Its property then belonged to the different stockholders as tenants in common. They could not agree among themselves. The minority appealed to the courts, and there the litigation was carried on for years; the minority insisting upon a sale, the majority upon the transfer of the property to a new corporation. At the end of six years the controversy was finally determined by this court; and in January, 1890, a decree of the circuit court directing a sale was affirmed. 10 Sup. Ct. Rep. 224. During these years each party was fully aware of the purpose and contention of the other, and therefore had ample time to prepare for whatever might be the outcome of the litigation. In January, 1890, as stated, the final decision was announced. At that time each party knew that a sale was to be had, and that, if it intended to buy, it must make all its arrangements therefor, and in such arrangement must be included a determination of the full amount it was willing to bid for the property. It cannot be tolerated that it be in the contemplation of either to wait until after the property has been struck off to the other, and then open the bidding and defer the sale by an increased offer. Though the final decision in favor of the sale was announced on January 13, 1890, the sale was not made until January 24, 1891, more than a year thereafter. It was advertised to take place first on October 30, 1890, but, on application of the defendant, was postponed till December 20th, and again, on like application, to January 24, 1891. It was fully advertised not only in the local, but also in Detroit, New York, Boston, and Chicago papers. There can be no pretense, therefore, of haste or a lack of notice, personal and general.

It is insisted by defendant that the plaintiffs were acting in the interest of the Quincy Mining Company, a corporation owning adjoining and rival mining property; that solely in its interest, and not for the benefit of the stockholders in the Pewabic Mining Company, they carried on this litigation, secured the sale, bought at it and, in final consummation of the wrong to their co-owners, have since their purchase conveyed the property to the Quincy Mining Company. There is a countercharge by the appellees that the majority of the stockholders who sought to convey the property to the new corporation, and who have been practically the adverse party in this litigation, and who may hereafter be considered as described by the term 'defendant,' were acting in the interest of the Franklin Mining Company, another corporation, also owning property adjacent to the Pewabic mine. We are inclined to think there is truth in each allegation, and that it is not difficult to read between the lines that the minority of the stockholders were interested in the Quincy and the majority in the Franklin Company, and that these respective corporations were seeking to obtain possession and control of the Pewabic. But there was no wrong or fraud in this, and no deception. Each party evidently knew the interests and relations of the other. In the answer originally filed by the defendant, in 1884, it was charged upon the plaintiffs that they were acting in the interest of a rival mining company.

It is also contended that the sale was made at a time when a severe financial condition existed in the country, especially affecting mining stocks and mining property. But the sale had once been postponed on this ground at defendant's instance, the affidavits as to such depression were met by counteraffidavits on the part of the plaintiffs, and it is a doubtful question, under those affidavits, whether such depression did in fact exist. Even if it were clear that it did, that would not necessarily be a reason for further postponement. There comes a time in the history of a litigation like this when, though the times may be depressed, there must be a sale. The rights of the one party are to be respected as well as those of the other; and it does not always lie in the mouth of one who, by strenuous and protracted resistance, has delayed for years a sale, to claim still futher delay on account of the then depressed financial condition. A speedy end of litigation, as speedy as is consistent with the rights of each party, is to be desired; and they who prolong litigation by appeal from court to court must not complain if sometimes they find themselves, at the end, under burdens which would not have rested upon them but for such delay. We think it must be affirmed that, so far as the general equitable considerations attending these cases are concerned, they made in favor of the appellees, and that a court should not for any light or technical reason disturb a sale consummated at the end of seven years of litigation.

We pass, therefore, to some of the special matters presented. First it is claimed that under the terms of the decree the sale was prematurely made. That decree directed 'that all the assets and property of the said Pewabic Mining Company be sold at public vendue, for cash, to the highest bidder; provided, however, that if at such sale the bid for the aggregate of the property and assets of said company should not be in excess of fifty thousand dollars above the amount of the debts...