Schantz v. Oakman

• Decision Date: 15 May 1900
• Citation: 57 N.E. 288,163 N.Y. 148
• Parties: SCHANTZ v. OAKMAN et al.
• Court: New York Court of Appeals Court of Appeals

163 N.Y. 148

57 N.E. 288

SCHANTZ

v.OAKMAN et al.

Court of Appeals of New York.

May 15, 1900.

Appeal from supreme court, appellate division, First department.

Action by John S. Schantz against Walter G. Oakman and others. From a judgment in favor of the defendants, affirmed by appellate division, plaintiff appeals. Affirmed. See 41 N. Y. Supp. 746.

John McCrone, for appellant.

Lloyd McK. Garrison and H. L. Stimson, for respondents.

GRAY, J.

One of the grounds of the demurrer to the complaint was that it did not state facts sufficient to constitute a cause of action, and that has been approved by the courts below, and from a final judgment entered in favor of the defendants the plaintiff has now appealed to this court.

It appears from the complaint that on October 16, 1889, the plaintiff, possessing an option for the purchase of a majority of the capital stock of certain street-railway companies in the city of Milwaukee, Wis., of which the Milwaukee Cable Railway Company was one, entered into an agreement with the defendants Oakman and Ryan, who held a majority of the capital stock of the Milwaukee City Railroad Company and controlled its affairs, and who were desirous, by a union of interest, to form a new company, to be known as the Consolidated Company; the object of the agreement being alleged to be ‘the promotion of the interests of the Consolidated Company.’ Its consideration was described to be ‘the mutual covenants and agreements to do and to refrain from doing the things and acts therein specified.’ It provided that the plaintiff was to deliver the entire capital stock of the cable company to the Consolidated Company. Other provisions are referred to, which provide for certain things to be done upon the formation of the Consolidated Company, and that of its capital stock fourfifths should be issued to its stockholders and to the city railroad company, and one-fifth to the plaintiff and his associates. The agreement itself is not exhibited, and all we know of it is from the allegations of the complaint, which have been referred to, and it is not alleged that it contained any agreement on the part of the defendants Oakman and Ryan to form the Consolidated Company. The complaint proceeds to show that the provision bearing upon the cable company, by reason of the condition of its business and affairs, was not carried out, but was varied by the plaintiff and his associates, as he alleges, in furtherance of the agreement. It is not alleged, however, that the assent of the defendants Oakman and Ryan was had to that; although it is stated that the difficulties of the cable company were understood by them, and that the plaintiff's performance of the agreement, and the delivery of the cable company's stock, were dependent upon such changes and delay as were required by reason thereof. The complaint then charges that while arrangements were in progress by the plaintiff, as he says, ‘in the interest of the Consolidated Company,’ a combination was made between the defendants Oakman and Ryan and the defendants Villard and Payne for ‘the purchase and sale, or consolidation, of street-railway companies in the city of Milwaukee,’ or of the city and cable railway companies, or for the formation of companies to take over and operate street-railway companies in Milwaukee, and that they ‘thereby joined themselves together as partners by a joint contribution of capital or labor, for the purpose of such business,’ etc., which was in violation, on the part of Oakman and Ryan, of their said agreement with the plaintiff. It is alleged that this combination was for the purpose of forming the North American Company, a corporation designed to own the capital stock of railways throughout the United States, and to operate them; that it was formed with a large capital stock, and with Ryan and Villard as the principal officers; that thereupon the defendants Oakman and Ryan ceased and refused to co-operate with the plaintiff ‘in the business of promoting the interests of said Consolidated Company,’ and ‘did not at any time form or organize the said Consolidated Company, as they had agreed with this plaintiff to do.’ The plaintiff then sets forth arrangements between the defendants Oakman and Ryan and the defendant Villard, which resulted in the formation of a company called the Milwaukee Street-Railway Company of Wisconsin; to which were transferred the common stock, property, and franchises of the Milwaukee City Railroad Company, and alleges that, as a consequence of the combination between these parties and of their transactions, the defendants received large gains or profits. Other acts and transactions of the defendants are alleged in furtherance of the purpose of their combination, from which large profits accrued to them. The complaint alleges that the plaintiff, or the plaintiff and his associates, did all that the agreement required on their part, ‘except in so far as anything * * * was rendered impossible of performance by the acts of the defendants Oakman and Ryan’; that the defendants Oakman and Ryan by their acts deprived the plaintiff of his rights and benefits under the agreement between them; and that they, by having engaged in the business of consolidating street railways in the city of Milwaukee, in combination with the defendants Villard and Payne, ‘in violation of their said agreement with the plaintiff for the formation of the Consolidated Company in combination with him,’ have acquired great gains and profits. Judgment is prayed for an accounting as to all the transactions of the defendants, and each of them, and as to the moneys received and paid out by them, respectively, in relation to the business prosecuted by all of the defendants in combination, to the end that the amount received by the defendants Oakman and Ryan may be ascertained; that that amount be decreed the property of the defendants Oakman and Ryan and of this plaintiff jointly; and that therefrom the plaintiff be paid a share equal to the interest which he was to receive in the Consolidated Company.

A fuller analysis of the complaint has been made in the learned opinions of the courts below, and sufficient...