State v. Barnett

• Decision Date: 02 July 1912
• Citation: 149 S.W. 311
• Parties: STATE ex rel. BOWLING GREEN TRUST CO. et al. v. BARNETT, Circuit Judge.
• Court: Missouri Supreme Court

149 S.W. 311

STATE ex rel. BOWLING GREEN TRUST CO. et al. v. BARNETT, Circuit Judge.

Supreme Court of Missouri.

July 2, 1912.

1. PLEADING (§ 214)— DEMURRER — ADMISIONS.

A demurrer admits all facts well pleaded.

2. PROHIBITION (§ 25)—PROCEEDINOB — DTERMINATION ON DEMURRER.

Where the pleaded facts in a petition for a writ of prohibition, admitted by demurrer, show relator's right to the writ, the demurrer should be overruled and the writ made permanent, without tolerating further pleadings.

3. PLEADING (§ 214) — DEMURRER — ADMISION—CONCLUSION OF LAW.

A demurrer does not admit conclusions of law, since the averment of a mere conclusion of law raises no issue.

4. PROHIBITION (§ 10)—GROUNDS—WANT OF JURISDICTION.

On application for a writ of prohibition against a suit in equity, want of jurisdiction in the cause sought to be prohibited may be shown by the petition therein, or by a failure of the record to show service of process.

5. PLEADING (§ 34)—CONSTRUCTION—PRAYER FOR RELIEF.

The court cannot be guided by the prayer of a bill in determining the relief sought.

6. PROHIBITION (§ 28)—WANT OF JURISDITION—AVERMENTS AS TO JURISDICTION.

A bill in the circuit court sought to have the court declare that a mortgage bond, securing debenture bonds held by plaintiffs, was a lien prior and superior to a refunding mortgage bond; but the bill itself pleaded and set out portions of the refunding mortgage, showing conclusively that it recognized the superior lien of the debenture mortgage, that in law and fact it was a prior lien by reason of prior execution and record, and that the refunding mortgage was a junior mortgage, as declared on its face; and there was no averment that any person had ever attempted a different construction as to priority. Held, on prohibition to restrain further proceedings by the circuit court, that its equity jurisdiction could not be invoked by plaintiffs to determine a priority shown by their own pleadings, and that jurisdiction of other matters, which the court might not have but for such question, could not be so foisted upon the court.

7. COURTS (§ 12)—JURISDICTION—PERSONAL PROPERTY BEYOND TERRITORIAL LIMITS.

Upon a bill to adjudge a debenture mortgage, securing bonds held by plaintiffs and constituting a prior lien, had been paid by exchange for new bonds and stock under the terms of a refunding mortgage, it appeared that the mortgagor issuing the new bonds and another party defendant, holding new bonds and stock taken in exchange for debenture bonds, were Missouri corporations, who had had proper personal service, that the debenture bonds were held in New York under a trust agreement by which they were to be held as security for the new bonds until exchange of the full amount of the debenture bonds had been effected, that the plaintiffs, the trustee, and most of the interested defendants lived in New York and had not been personally served in the proceeding, and that the bonds issued in exchange for such debenture bonds were held by many persons other than the named defendants, who were unknown to plaintiffs, and most of whom were without the jurisdiction of the court. Held that, regardec' as a suit to cancel debenture bonds held by a trustee in New York under an agreement to be performed there, the circuit court was without jurisdiction.

8. PROCESS (§ 86)—SERVICE—PUBLICATIOJURISDICTION OF PERSON.

Where personal property, as to which a decree or judgment is sought, is not within the state, no jurisdiction of the person can be obtained by publication or other substituted service.

9. COURTS (§ 493)—CONFLICTING JURISDICTION—STATE COURTS AND UNITED STATES COURTS—SUIT ON BONDS.

A bill in the circuit court to cancel certain debenture bonds, securing plaintiffs' bonds, held in New York under a trust agreement to be performed there, and in which most of the defendants and parties interested were residents of New York, without personal service, averred that, prior thereto, a suit by the trustee had been commenced in the United States Circuit Court for the Eastern Division of Missouri for an accounting against the mortgagor, and had not been brought to final hearing; but there was no averment that the plaintiffs had demanded of the trustee to go forward with that suit, or that it had declined to proceed with it. Held that, as every question presented by plaintiffs' bill could be adjudged and the rights of the plaintiffs and of all claimants fully protected in the suit in the federal court, the circuit court was precluded from taking jurisdiction.

10. MORTGAGES (§ 186)—RIGHT OF CESTUI AGAINST TRUSTEE —ACTION — REFUSAL OF TRUSTEE.

The trustee under a mortgage securing debenture bonds, empowered by the mortgage to bring action, can alone sue to adjudicate the rights of bondholders; and a cestui cannot sue until he shows the trustee's refusal to sue.

In Banc. Prohibition by the State of Missouri, on the relation of the Bowling Green Trust Company and others, against Honorable James D. Barnett, Judge of the Circuit Court of Audrain County. Permanent writ of prohibition granted.

This is an original proceeding, the purpose of which is to prevent the respondent herein, judge of the circuit court in and for Audrain county, from further proceeding in a cause in said court pending, wherein the Continental Securities Company and Clarence H. Venner are plaintiffs and the relators in this case are defendants.

In the application for our writ, the relators have set out in full the bill in equity in the circuit court case, as well as the different attempts at service upon the several defendants in the bill named. The sufficiency of the bill itself to confer jurisdiction upon the circuit court is challenged, as is also the sufficiency of the service upon the respective defendants in that case. The bill pending in the circuit court is exceedingly voluminous; but counsel for relators have given us as succinct and fair an analysis of it as we could make, and their analysis, not being criticised by counsel on the other side, we adopt. It thus reads:

"The petition states:

"(a) That the Continental Securities Company (herein called the Continental Company) is a New Jersey corporation, with its place of business in the city of New Jersey, In that state; that Venner is a citizen bands resident of the state of New York; that the Wabash Railroad Company (herein called the Wabash Company) is a corporation consolidated under the laws of Ohio, Illinois, Indiana, Michigan, and Missouri, with its place of business in the city of St. Louis; that the-Bowling Green Trust Company (herein called the Bowling Company), the Equitable Company (herein called the Equitable Company), the Metropolitan Trust Company (herein called the Metropolitan Company), are corporations of the state of New York, with their places of business in the city of New York; that the St. Louis, Iron Mountain & Southern Railway Company (herein called the Iron Mountain Company) is a Missouri corporation, with its place of business in the city of St. Louis.

"(b) That the Wabash Company, on July 1, 1889, executed a mortgage (herein called the debenture mortgage), whereby it conveyed to the Mercantile Company, as trustee (we quote from the petition 4), `certain lines of railroad, roadbed, rolling stock, rights of way, and other property, both real and personal, as in said mortgage more particularly described, a large part of which said real property, and much of said personal property, then was and is now situated in Missouri,' to secure debenture A bonds of the par value of $3,500,000, and debenture B bonds of the par value of $26,500,000, to bear interest at 6 per cent. but to be paid only out of the net income of the company, as defined by the mortgage; that the debenture bonds, debenture mortgage, and articles of consolidation and by-laws of the Wabash Company provided that the holders of the debenture bonds shall have the right to elect one half of the highest even number of directors of the Wabash Company, and that the stockholders shall have the right to elect the other half; that the directors thus elected shall have the right to elect an additional director, who shall become president of the company, but, in the event that they fail to agree, the Mercantile Company shall select the additional director, who shall become president of the company, and that the holders of the debenture bonds shall have the right to cast one vote for each $100 per value of bonds held by them at all stockholders' meetings of the Wabash Company.

"(c) That during the years 1896 to 1899, inclusive, the net income from the property covered by the debenture mortgage, applicable to the payment of interest on the debenture bonds, was more than $600,000, and since 1899 has been several million dollars; that 1 per cent. was paid on debenture A bonds in the year 1896, and 6 per cent. in each of the years 1900, 1901, 1902, 1903, and 3 per cent. in the year 1904; that prior to July 1, 1907, no interest had been paid on debenture B bonds."

"(e) That on the 29th day of June, 1906, the board of directors of the Wabash Company unanimously adopted a resolution authorizing the creation of an issue of 50-year

4 per cent. refunding gold bonds, to not exceed in amount $200,000,000, to be secured by a mortgage on its property, for the purpose of making provision to refund and retire, all of its outstanding indebtedness and obligations secured by lien, including the exchange of debenture bonds.

"(f) That on August 16, 1906, the Wabash Railroad Company, by order of its board of directors, called a special meeting of its stockholders and debenture bondholders, to be held at Toledo, Ohio, on the 22d day of 'October, 1906, for the following purposes: To obtain authority to create said issue of 4 per cent. 50-year refunding gold bonds; to increase the preferred capital stock by the amount of $16,500,000; to increase the common capital stock by the amount of $31,500,000; to...