Rhorer v. Middlesboro Town & Lands Co.

• Decision Date: 08 February 1898
• Citation: 103 Ky. 146,44 S.W. 448
• Parties: RHORER v. MIDDLESBORO TOWN & LANDS CO.
• Court: Kentucky Court of Appeals

44 S.W. 448

103 Ky. 146

RHORER v. MIDDLESBORO TOWN & LANDS CO.

Court of Appeals of Kentucky.

February 8, 1898

Appeal from circuit court, Bell county.

"To be officially reported."

Action by M. H. Rhorer, receiver, against the Middlesboro Town &amp Lands Company. Judgment dismissing petition on demurrer, and plaintiff appeals. Affirmed.

G. W Saulsberry, for appellant.

Chapman & Sampson, for appellee.

BURNAM J.

This action was brought by appellant, as receiver of the First National Bank of Middlesboro, against the Middlesboro Town &amp Lands Company, as successor to the Middlesboro Town Company to recover on a guaranty made by the Middlesboro Town Company to the holder of stock issued by the investment Company of Middlesboro, the plaintiff being the holder of 30 shares of that stock. The lower court dismissed the appellant's petition on special and general demurrer, and we are asked to reverse that judgment.

The petition alleges that the appellant is the receiver of the bank; that in the year 1890 the Investment Company of Middlesboro was organized, principally to purchase real estate from the Middlesboro Town Company, and to improve and sell same; that as an inducement to purchasers of stock in the Investment Company, the Town Company guarantied to each and every stockholder in the Investment Company payment of dividends at the rate of 7 per cent. per annum, payable semiannually, the guaranty being in these words: "For value received, the Middlesboro Town Company hereby guaranties to the holder hereof payment of dividend at the rate of seven per cent. per annum, payable semiannually, on the first days of January and July, at the Coal & Iron Bank of Middlesboro, Ky. for a period of ten years from the first day of July, 1891. [Signed] C. M. Woodberry, Vice President,"-the corporate seal being affixed and attested by the secretary; further alleging that there were due and payable from the defendant Town Company on this guaranty a number of past-due semiannual dividends, which had not been paid, and seeking judgment against the Town & Lands Company upon this allegation; that the defendant Town & Lands Company is the successor of the Town Company, and that it had assumed all liabilities of the Town Company, and is liable for the payment of the overdue dividends. It is further alleged that the guaranty by the Town Company was made simultaneously with the issuing of the stock upon which such interest was guarantied, for a valuable consideration passing from the Investment Company of Middlesboro to the Town Company; that the Town Company was the promoter of the Investment Company of Middlesboro, and held and owned a large amount of stock in the Investment Company; that the Town Company was directly instrumental in the sale of the stock of the Investment Company, and was beneficially interested in all moneys realized from the sale of such stock; and that the Investment Company was insolvent, and had ceased to do business. It seems to us that the allegations of this petition are not sufficient to support a cause of action. We will consider the special and general demurrer separately.

First, as to the special demurrer: A receiver, in order to maintain an action, must set out facts showing his appointment, and by what jurisdiction appointed; setting out, also, so much of the proceedings in the cause as will show that his appointment is legal, as the defendant may insist that the facts constituting the appointment as receiver which are set out shall be sufficient to show that an appointment has been made, and that these facts must be so stated, and with such certainty, that they can be traversed. See Newm. Pl. & Prac. 305, 306, and Bliss, Code Pl. §§ 262, 263. The petition is wanting in these essential averments, and the special demurrer was, therefore, properly sustained.

Second the general demurrer: Here...