State ex rel. Attorney-General v. Wood

• Decision Date: 02 January 1883
• Parties: STATE OF MISSOURI, EX REL. ATTORNEY-GENERAL, Appellant, v. THOMAS W. WOOD ET AL., Respondents.
• Court: Missouri Court of Appeals

13 Mo.App. 139

STATE OF MISSOURI, EX REL. ATTORNEY-GENERAL, Appellant,

v.THOMAS W. WOOD ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

Jan. 2, 1883.

APPEAL from the St. Louis Circuit Court, HORNER, J.

Affirmed.

ALEX. MARTIN and FRANK K. RYAN, for the appellant.

JOHN G. CHANDLER, for the respondents.

BAKEWELL, J., delivered the opinion of the court.

This is a proceeding in the name of the state at the relation of the attorney-general, to deprive of its franchises, the Wood Medicine Company, a corporation of which the other defendants are stockholders. The petition alleges that it was alleged in the articles of incorporation that all the stock has been subscribed and paid up in lawful money of the United States, and that this allegation was false; that none of the stock had ever been paid up; and that, for this reason, the procuring of the issuance of a certificate of incorporation was a fraud and a usurpation of franchises in violation of the statute.

James Maguire, one of the defendants, filed no answer. Defendants Wood, Driskell, and the corporation, the Wood Medicine Company, answered, admitting the execution, acknowledging, and recording of the agreement of incorporation, and the issuing of the certificate of incorporation. They say that Wood and Driskell, as corporators, are carrying on the business of the corporation, and that James Maguire, the other corporator, did so with them from the organization until June, 1880, when, under cover of these proceedings, he set to work to destroy the corporation. They admit that, by the articles, the capital stock was fixed at $10,000. They deny all allegations as to false statements in the articles of incorporation. The answer contains allegations as to how and when the stock was paid, and how it was owned, and says that defendant James Maguire, who has withdrawn from the management of the corporation, and is infringing its property rights, has, by false allegations, induced the attorney-general to institute these proceedings, which are really being prosecuted by the attorneys of Maguire. There was a reply denying the new matter.

The cause was tried by the court, a jury being waived. No declarations of law were asked or given, and the finding was for the defendants, and the information was dismissed. Nothing is saved as to the rulings as to evidence.

As this is not an equitable proceeding, we have nothing to do with the weight of the evidence; and, as every presumption is in favor of the action of the trial court, we are only to determine whether, upon the evidence in the case, the finding was illegal.

It appeared that for a long period of years before the organization of the Wood Medicine Company, J. & C. Maguire had been in co-partnership as druggists in St. Louis, and had been largely engaged in manufacturing certain preparations known as Maguire's Family Medicines. These proprietary medicines had been very extensively advertised, at a great expense, and had an established reputation. They derived their value mainly from the notoriety they had acquired, and they were well known to the trade. If properly managed, a clear income of $10,000 a year could be made out of their manufacture and sale. A wholesale druggist testified that he was well acquainted with the medicines, and that to have a right to manufacture and to use the receipts, cuts, and labels would be worth a year's profit, or $10,000. It was admitted by the state that this testimony would be corroborated by three other witnesses, who, for this reason, were not examined.

Just before the articles of incorporation were executed, James Maguire was carrying on this medicine business, in which his brother, Constantine Maguire, had a nominal, but no real, interest. James Maguire had then on hand about $700 worth of goods, and also a boiler and other furniture used in the business, worth $600 to $800. He had besides hypothecated about $2,800 of goods to secure notes to the amount of $1,800. It was then proposed that Wood and Driskell should purchase of Maguire fifty-five one-hundredths of this property and form a corporation to carry on the business; the capital stock was to be $10,000, to be subscribed by these three corporators. James Maguire admits that he said to Wood and Driskell that the property was very valuable, and Wood swears that Maguire named $40,000 as its value.

Constantine Maguire then assigned in writing to James Maguire all his interest in the firm and its medical preparations and property, and all right to use the name of J. & C. Maguire, and bound himself not to put up or sell these medicines. James Maguire then assigned to Wood fifty-five one-hundredths in the same property, and rights to use of receipts and name; and Wood assigned to Driskell ten one-hundredths of the same property. Wood paid the money ($2,000) to take the goods out of pledge, immediately after the organization of the company. The...