Powell v. North Missouri R.R. Co.
| Citation | 42 Mo. 63 |
| Parties | WILLIAM W. POWELL, Respondent, v. NORTH MISSOURI RAILROAD COMPANY, Appellant. |
| Decision Date | 31 October 1867 |
| Court | Missouri Supreme Court |
Appeal from St. Louis Circuit Court.
This was an action brought by plaintiff to recover of defendant his salary as secretary of the Chariton and Randolph Railroad Company. Testimony was introduced showing the election and services of plaintiff as secretary of that company. The remaining facts pertinent to this cause appear in the opinion of the court.
Hunton, Moss & Sherzer, for appellants.
I. A sale by the Chariton and Randolph Railroad to defendant, under the act of Feb. 10, 1864 (Adj. Sess. Acts, 1863-4), in the absence of fraud, vests a complete title to all effects and assets sold and transferred in defendant. ( Vide act cited; compare act April 2, 1853, Sess. Laws of New York, chap. 76; Eaton & Hamilton R. R. Co. v. Hunt's estate, 20 Ind. 463; 25 Ill. 353; Dwar. on Stat. 588; compare Ill. Laws of 1861, p. 480.)
II. Without such act the corporation had a right to sell and the other to purchase, the effects and assets not being in the nature of a franchise, both at common law and by virtue of their charter powers; and such a sale, being bona fide, passes title. R. H. Musser, for respondent.
I. The Legislature cannot be considered to have intended that this vast amount of property should have been transferred to defendant for so trivial a sum as one dollar, to the exclusion of the just claims of creditors.
II. If the Chariton and Randolph Railroad could not sell their property for a dollar and cut off all their creditors, they could not cut off a part of them by a limitation in favor of the grantee that only $25,000 of their debt should be paid.
III. The grantor and transferee seem, by their own acts, to have considered what they now claim to be a sale as an amalgamation. No trustees were appointed, nor receivers, against whom the plaintiff could have brought his action. Nothing was done after the transfer and acceptance except the fulfillment of the plain stipulations of the deed. If the parties had contemplated other than a transmigration of the corporate powers of the one company into the other, and a complete amalgamation of the one with the other, their acts, if guided by their duties, could not have other than provided for the winding up of the affairs of the grantor in the manner specified and demanded by the public statutes of the State. The act under which the amalgamation was effected cannot have contemplated a bargain and sale. If such had been its purpose, the words “surrender and transfer” would not have been used.
IV. The defendant, under that act, even if it did not amount to an amalgamation, would be a trustee by implication of these assets, and would, in any event, hold them for the benefit of the creditors of the defunct corporation. (Phila., Wil. & Balt. R. R. Co. v. Howard, 13 How. 307; Redf. Rail. 623 et seq.; 6 Rail. Cas. 136; Cham. & Pet. Rail. 582; Kean v. Johnson, 1 Stock. Ch. R. 405; 1 Port., Ind., 406.)
The petition is in the nature of a bill in equity, for an account of the assets of the Chariton and Randolph Railroad Company, in the hands of the defendant. It is alleged that this company, by an agreement with the defendant, and by virtue of the act of the General Assembly, approved February 10, 1864, for the consideration of one dollar and of the covenants contained in the instruments of transfer, surrendered and transferred to the defendant their franchises and property, of the value of $200,000, and that it was agreed that, upon the acceptance of such transfer, the other corporation should cease to exist. There was no allegation of fraud, nor that the transfer was not made for a valuable consideration, nor that the defendant was not a bona fide purchaser, nor that there was any trust for the benefit of creditors.
A demurrer to the petition was overruled.
An answer was then filed denying the averments of the petition, as therein stated, and alleging that the defendant, under the act aforesaid, did, on the 14th day of May, 1864, purchase, for a valuable consideration and in good faith, from the said Chariton and Randolph Railroad Company, all their rights, privileges, franchises, and property, but assumed no liability to pay the debts of the company; and it denied the right of the plaintiff to maintain this action.
There was some evidence tending to show that the value of the property sold and conveyed was between fifty and a hundred thousand dollars. The deed of sale and transfer was expressed to be “in consideration of the premises and the agreements herein contained, and of the sum of one dollar.” Among the covenants there was one for the payment of $25,000, for the liquidation of the debts of the company to that amount, and no more, and it was proved that this sum had been paid. Another covenant was to the effect that the defendant would issue certificates of stock in the “West Branch of the North Missouri Railroad Company,” to the stockholders in the other corporation, to the amount of the actually paid up stock held by each one, upon a surrender of the old certificates for cancellation. It was further covenanted that the defendant would accept the transfer in pursuance of the act, and agree to undertake the construction of the West Branch Railroad, and proceed at once to the construction and completion thereof, as rapidly as the moneys to be raised by means of the bonds authorized, or from other sources, would enable them to do.
The court gave an instruction, which we may take as indicating the principles upon which the decision was grounded, to the effect that the act of the Legislature did not authorize a sale of the effects of the Chariton and Randolph Railroad Company, but merely an amalgamation and consolidation of the two roads, and that therefore the assets were subject, in the hands of the defendant, to the plaintiff's claim; and judgment was given for the plaintiff for the sum of $37.35, for which execution was awarded against the property, real and mixed, of the Chariton and Randolph Railroad Company, found in the hands of the defendant.
This corporation was authorized by the act to transfer and assign, by a vote of a majority in interest of the stockholders, all their effects and assets, rights and privileges, and all the work done in the construction of their road, to the North Missouri Railroad Company; and upon such transfer and acceptance the...
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