Silver Valley Min. Co. v. Baltimore Gold & Silver Mining & Smelting Co.

• Decision Date: 26 May 1888
• Citation: 6 S.E. 735,99 N.C. 445
• Parties: SILVER VAL. MIN. Co. v. BALTIMORE G. & S. M. & S. Co.
• Court: North Carolina Supreme Court

6 S.E. 735

99 N.C. 445

SILVER VAL. MIN. Co. v. BALTIMORE G. & S. M. & S. Co.

Supreme Court of North Carolina

May 26, 1888

Appeal from superior court, Davidson county; MACRAE, Judge.

Action by the "Silver Valley Mining Company" against the "Baltimore Gold & Silver Mining & Smelting Company" to have a deed of trust set aside as fraudulent. From a decree declaring the deed of trust fraudulent, and awarding plaintiff $18,000 and interest, and both parties appeal.

Morrison & Bond, Robbins & Raper, and M. H. Pinnix, for plaintiff.

Strong Gray & Stamps, J. J. Alexander, and R: W. Applegrath, for defendant.

MERRIMON J.

The plaintiff and the defendant corporations were created by and organized, respectively, under statutes (Pr. Acts 1860-61, c 107; Pr. Acts 1883, c. 41) of this state. "The Baltimore Gold & Silver Mining & Smelting Company of Baltimore City," mentioned in the pleadings in important connections, is a corporation created by and organized under the laws of the state of Maryland, and has the same corporate name as the defendant corporation, omitting the words "of Baltimore City." This action is brought to have declared void for fraud a deed of trust executed on the 27th day of April, 1882, by the plaintiff, through the contrivance and fraudulent conduct of its principal officers and agents of the said "The Baltimore Gold & Silver Mining & Smelting Company of Baltimore City," to the defendants trustees, to recover a large debt therein mentioned as due to the last-mentioned corporation, and which debt, and the security therefor, the last-named corporation sold and assigned to the defendant corporation, the latter having knowledge of the fraud alleged, and the plaintiff's rights in respect thereto; and likewise to recover $75,000, the balance of the proceeds of the sale of 60,000 shares of the capital stock of the plaintiff, which it is alleged the said "The Baltimore Gold & Silver Mining & Smelting Company of Baltimore City," through the like contrivance and fraud of its principal officers and agents, and the same of the officers and agents of the plaintiff, got possession of and sold for $90,000. It is contended for the plaintiff that it is entitled to the relief demanded as to the deed of trust mentioned against the defendant corporation, and the defendant trustees of said deed, upon the ground that the said "The Baltimore Gold & Silver Mining & Smelting Company of Baltimore City," for whose benefit this deed was made, sold and assigned its debt mentioned in the deed, and all its right and interest in the latter, to the defendant corporation, with notice of the plaintiff's rights as to the alleged debt and deed; and likewise to recover the money mentioned, because the deed of assignment conveyed to the defendant corporation the same and all its property, both real and personal, of every kind and nature whatsoever, with like notice of the plaintiff's right in respects thereto. And it is further contended that the defendant corporation in this deed of assignment assumed liability to the plaintiff in the several respects mentioned, and covenanted to and with the said "The Baltimore Gold & Silver Mining & Smelting Company of Baltimore City" to discharge the liability of the latter to the plaintiff. So much of this deed of assignment as need be set forth here is as follows: "This deed made this 19th day of June, in the year 1883, between the Baltimore Gold & Silver Mining & Smelting Company of Baltimore City, a corporation incorporated under the laws of Maryland, of the first part, and the Baltimore Gold & Silver Mining & Smelting Company, a corporation duly incorporated by the general assembly of North Carolina, by an act entitled 'An act to incorporate the Baltimore Gold & Silver Mining & Smelting Company,' ratified the 21st day of February, A. D. 1883, of the second part. Whereas, the party hereto of the first part, at a general meeting of its stockholders held in the city of Baltimore on the 31st day of May, 1883, agreed to transfer and convey, to the party hereto of the second part, all its property, affairs, rights, credits, and business, provided that in consideration thereof the six hundred thousand shares of the capital stock of the said party of the first part shall be held and taken as if issued by the said party of the second part as and for its capital stock, at the par value of five dollars a share, a share full paid, and that all the proceedings held and done by the party hereto of the first part shall be held and taken as if done under the charter of the said party of the second part, and in the assumption by the said party of the second part of all the debts and obligations and liabilities of the said party hereto of the first part, so that the party hereto of the second part shall succeed, to all intents and purposes, to the affairs, rights, obligations, interests, and business of said party hereto of the first part: now, therefore, in consideration of the premises, and of the sum of five dollars," etc., "the party hereto of the first part hath granted, bargained, and sold, aliened and enfeoffed, released and confirmed, and by these presents doth grant," etc., "the party hereto of the second part, its successors and assignees," etc., (sundry tracts of land described,) "and all the property, affairs, rights, credits, chattels, interest, and business wheresoever situated, to it, the said party of the first part, belonging, or to which it may have any right, title, interest, or demand whatsoever in law or equity, to have and to hold," etc., "to the party hereto of the second part, its successors and assigns, forever; and the said party of the first part covenants to and with," etc., "and the said party hereto of the second part unite herein for the purpose of assenting, contracting, and agreeing to perfect and carry into execution the contract, agreement, and consideration hereinbefore recited," etc.

The pleadings are very voluminous. The complaint demands judgment that the deed of trust be decreed to be null and void; that an account be taken; that a perpetual injunction be granted; that the plaintiff have judgment for the money, the proceeds of the sale of shares of the capital stock of the plaintiff; for general relief, and for costs. At the appearance term the court granted an injunction pending the action until the final hearing thereof, restraining the defendants as to the deed of trust, etc.; and, by consent of parties, it was "further ordered that it be referred to John C. King, of the city of Baltimore and state of Maryland, to take and state an account of the dealings and transactions between the said plaintiff and defendant companies, and report the result thereof to the next term of this court, and this reference is made under the Code, with the right of each party to have issues arising on the pleadings tried by a jury." Afterwards, the referee named made his report, of which the following is a copy:

""To the Honorable, the Judge of the Superior Court of Davidson County, N C.: The undersigned, John C. King, referee, would respectfully report that, under order of this honorable court passed in the above-entitled cause, wherein I am directed to 'take and state an account of the dealings and transactions between the said plaintiff and defendant companies, and report the result thereof to this court,' I notified the respective parties, plaintiff and defendant, to appear at my office at the city of Baltimore and state of Maryland, on the 18th day of August, A. D. 1885, at which time and place the respective parties and their respective counsel did appear, and I proceeded under the said 'order' to hear the said parties; to take the depositions of witnesses, who were first duly sworn according to law; to examine all vouchers produced, all books of account, and documents and exhibits, and the stated account marked 'X' and the stated account marked 'Y' and I continued the proceedings under said order from day to day till the close of the same, February 18, A. D. 1886, when the respective counsel of the parties, both plaintiff and defendant, were heard. I hereby return the court papers in the cause, the depositions of the witnesses, the books of account, the minute-books, the cash-book of the Silver Valley Mining Company, the cash-book of the Baltimore Gold & Silver Mining & Smelting Company of Baltimore City, the stock certificates and stubs of the Silver Valley Mining Company, the vouchers of the Silver Valley Mining Company, the 'checks,' the accounts 'X' and 'Y,' and all other papers and accounts produced before me; and I, in compliance with the said order, report as follows: As a matter of fact, that there were no dealings between the plaintiff and defendant companies prior to the 19th of June, 1883, on which day a deed was executed wherein the Baltimore Gold & Silver Mining & Smelting Company of Baltimore City (a corporation chartered under the laws of Maryland) is grantor, and the Baltimore Gold & Silver Mining & Smelting Company (a corporation chartered by the laws of North Carolina) is grantee, in which deed I find it recited 'that the said party of the second part assumes all the debts and obligations and liabilities of the party of the first part, so that the party of the second part shall succeed, to all intents and purposes, to the affairs, rights, interest, and business of the party of the first part.' I find that under the above assignment the Baltimore Gold & Silver Mining & Smelting Company claim the sum of $53,010.17, with interest from the 2d of May, 1882, as a debt due by the Silver Valley Mining Company, the plaintiff in this case, for and on account of that money advanced by the Baltimore Gold & Silver Mining & Smelting Company of Baltimore City to the said Silver Valley Mining

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