Slover v. Coal Creek Coal Co.

• Decision Date: 16 November 1904
• Parties: SLOVER et al. v. COAL CREEK COAL CO.
• Court: Tennessee Supreme Court

82 S.W. 1131

113 Tenn. 421

SLOVER et al. v. COAL CREEK COAL CO.

Supreme Court of Tennessee.

November 16, 1904

Appeal from Chancery Court, Anderson County; Hugh G. Kyle Chancellor.

Suit bye Parthena Slover and another against the Coal Creek Coal Company. From a decree for defendant, complainants appeal. Affirmed.

Webb McClung & Baker and Ingersoll & Peyton, for appellant Slover. Charles T. Cates, Jr., R. E. L. Mountcastle, and H. B Lindsay, for appellee.

NEIL J.

The bill in this case was filed by Parthena Slover, the widow of Wm. H. Slover, and by L. Slover, the widow of J. B. Slover.

The bill charges, in substance, that Wm. H. Slover and J. B Slover came to their death in 1902, through an explosion in the Fraterville mine in Anderson county; that this explosion was caused by the negligence of the defendant company and E. C. Camp and George N. Camp, officers of the company; that over 180 people were killed at the same time in the mine; that more than 150 suits have been brought, and are now pending in the circuit courts of Knox and Anderson counties, to recover damages for the death of said persons; that the aggregate amount of the damages thus sued for exceeds $1,000,000, a sum in excess of all of the assets of the defendant company; that the suits of complainants were not among the first brought; that perhaps 100 actions antedated their suits; that it is therefore probable that many judgments for damages will, in the due course of proceedings at law, be obtained, before they recover judgment; that, if the ordinary course of law be pursued, several hundred thousand dollars of assets will be required to satisfy such preceding judgments, and this will, in all probability, exhaust all of the assets of the defendant company, and that nothing will be left for the complainants.

It is further alleged that the defendant company is the owner in fee of only a very small amount of real estate, if any; that the total value of real estate supposed to belong to it is less than $50,000; that the chief assets of the defendant company consist of leases and mining privileges in certain coal lands owned by other persons, with certain railway rights and privileges which yield large revenues; that complainants believe and fear that at the time when defendant's property, in due course of law, shall be brought to sale for the satisfaction of such judgments as they may recover, the same will realize less than $100,000; that they will thus be deprived of realizing anything upon their hoped-for recoveries.

The bill further alleges "that complainants are informed and believe that the said defendant company is now mining upon said property leased by it more than seven hundred tons of coal daily, all of which is sold under a permanent contract with the Southern Railway Company for its own supply of fuel, and that its profits for each ton of coal thus sold is fifteen cents; that thus the net profits upon each day's operation of said Coal Creek Coal Company is fully $100; that this contract with the Southern Railway Company does not consume the entire product of the defendants' operations, but, as complainants are informed and believe, said defendants sell a large quantity to other consumers, so that usually the annual profits of this contract with the said railway company amounts to $30,000 of steady revenue to the defendant company, and its sales to other persons aggregate a profit of about $20,000 additional, thus making their annual net profits fully $50,000."

The bill further alleges that the defendant company has a large revenue from the rent of its houses to miners.

The bill further proceeds: "The only other asset belonging to said defendant from which complainants and said other plaintiffs can expect payment of their just claims consists of the mines which are located on coal lands belonging to the Coal Creek Mining & Manufacturing Company, and leased from that company by the Coal Creek Coal Company; that the coal in the leased lands constitutes its only value, and the land will become valueless when the coal is taken out of it.

"Complainants are informed, believe, and charge that the Coal Creek Coal Company has, since said actions at law were begun, declared it to be its policy to delay said suits as long as possible, and draw the coal out of said mines as rapidly as possible, and pay the profits out in dividends to its stockholders; so that when recoveries shall be had in said actions at law there will be nothing but an empty shell for your complainants and said other plaintiffs in said actions to make their money out of, and said company is now doing this.

"As hereinbefore stated, said mine explosion occurred on May 19, 1902. Immediately thereafter, E. C. Camp, who owned over fifty per cent. of the $200,000 of capital stock of the Coal Creek Company, and his brother G. N. Camp, who owns more than $25,000 of the stock of the said company, conceived the plan of delaying the said actions at law as long as possible, and in the meantime of working out and exhausting the coal in the said mines as rapidly as possible, and with this purpose and end in view, so complainants aver and charge, that they did, within seven days after the occurrence of said mine disaster on May 26, 1902, declare and pay out to themselves and the other stockholders a dividend of $10,000, and they did, on October 14, 1902, declare and pay out a second dividend, amounting to $16,000, and that on December 2, 1902, they declared and paid out a third dividend of $20,000, thus making a total of $46,000 paid out in dividends between May 26 and December 31, 1902, and they had, just previous to said mine disaster on March 27, 1902, declared and paid out a dividend of $20,000; making a total of $56,000 in cash paid out in dividends during the year 1902.

"Your complainants further aver and show, upon information and belief, that said Coal Creek Coal Company and its stockholders are now engaged as rapidly as possible in robbing said mines, that is, not mining them in such a way as to produce the greatest ultimate profit out of the coal therein, and are drawing the pillars and otherwise mining said property in such a way as to produce the greatest profit in the shortest possible space of time; and complainants aver that they are doing this in pursuance of their fixed plan and policy and design to reduce to cash the assets of said company as quickly as possible, and pay the same out in dividends among the stockholders, so as to leave no funds or assets with which to pay the judgments which will be obtained against the defendant company by your complainants; and complainants are further informed, believe, and charge that the Coal Creek Coal Company, and its stockholders, if permitted to mine out such coal at the rapid rate at which they are now exhausting same, will mine out the entire body of the coal in the lands covered by their leases within the next four years, or five years at most."

The bill further alleges: "That complainants are informed, believe, and charge that the lease from the Coal Creek Mining & Manufacturing Company to the defendant Coal Creek Coal Company, under and by virtue of which said defendant holds and operates the mines, provides that, in case execution shall be levied upon the same, the lessor shall have the right to declare said lease terminated, and resume possession of said leased premises. This provision was, no doubt, inserted for the purpose of preventing the working of said mines and the payment of royalties to the lessor from being stopped; but the operation of said mine by a receiver of your honor's court would not stop the work of said mines and the payment of royalties. If, however, complainants and the other plaintiffs in said actions at law must wait until they recover judgments at law, and then levy upon said leasehold, the lessor may instantly terminate the defendant's title, and defeat complainants altogether in the collection of their claims."

The bill does not charge any debts to exist, but only the several actions for damages above referred to. Speaking in respect of these claims for damages so preferred, the bill charges as follows:

"Complainants charge, in view of the heavy liabilities hereinbefore mentioned [those involved in the damage suits], and the smallness and character of its assets, that said defendant Coal Creek Coal Company is insolvent, and should be wound up as an insolvent corporation in this court and in this cause."

The bill prays that it may be taken and maintained as a general creditors' bill filed in behalf of the present complainants, and in behalf of the plaintiffs in all the other actions at law, and in behalf of all the creditors of the corporation; "that a receiver be appointed at once to take charge of all the assets of the defendant Coal Creek Coal Company, and operate said mines, and collect the rents of said other lands and the houses on the said defendant Coal Creek Coal Company and any and all other property belonging to said defendant, and to preserve said property and all the rents and income thereof until adjudication of the rights of said parties shall be made; that an order be made assuming jurisdiction of this bill as a general creditors' bill to wind up the defendant as an insolvent corporation for the benefit of complainants and said other plaintiffs in said actions at law; that said plaintiffs in said actions at law shall be permitted to prosecute their said suits to final judgments, but requiring them to file transcripts of such judgments in this cause for payment, and inhibiting and enjoining them and all other creditors and claimants from otherwise suing the said defendants or attempting to subject the property and assets of said defendant by levy or otherwise except in...