The Wayne Pike Co. v. Hammons

• Decision Date: 29 April 1891
• Docket Number: 15,117
• Citation: 27 N.E. 487,129 Ind. 368
• Parties: The Wayne Pike Company v. Hammons et al
• Court: Indiana Supreme Court

27 N.E. 487

129 Ind. 368

The Wayne Pike Company v. Hammons et al

No. 15,117

Supreme Court of Indiana

April 29, 1891

Petition for a Rehearing Overruled Oct. 17, 1891.

From the Jay Circuit Court.

The judgment is affirmed.

D. T Taylor, R. H. Hartford, J. B. Jaqua, J. A. Jaqua, F. Winter and J. B. Elam, for appellant.

J. M Smith, T. Bosworth, F. H. Snyder and J. R. Perdieu, for appellees.

OPINION

Coffey, J.

This was an action by the appellees, as stockholders in the Wayne Pike Company, a gravel road corporation organized under the laws of this State, against said company and Alonzo L. Jaqua James B. Jaqua, Judson A. Jaqua, Christopher S. Arthur and Daniel Miller, as the officers of said corporation, to compel an accounting, and to obtain the appointment of a receiver.

Among other things, the first paragraph of the complaint alleges that after the construction of the gravel road the defendant Alonzo L. Jaqua became the owner of one hundred and seventy-five shares of the capital stock of said corporation; that defendant James B. Jaqua became the owner of two shares, and the defendant Judson A. Jaqua became the owner of one share of said capital stock, which shares of said stock held by them constituted a majority of the shares of stock subscribed in said corporation; that said defendants so holding said stock, conspiring together for the purpose of cheating and defrauding the plaintiffs and other holders of shares of stock in said company and to render their stock in said corporation worthless, elected themselves directors of said corporation; that on the day of -----, 188-, as such board, they assumed and took the sole and exclusive control and management of said gravel road and elected and appointed the defendant Alonzo L. Jaqua secretary and treasurer, and the defendant James B. Jaqua president thereof; that said defendants, having thus conspired together to cheat and defraud the plaintiffs, and, in pursuance of such conspiracy, having obtained possession of the property of said corporation, its books, papers and records thereto belonging, have been guilty of fraudulent, illegal and oppressive acts in the management of said corporation, as follows, to wit:

First. That they take all the revenues, income, profits and earnings of said corporation, derived from the toll collected thereon and therefrom, and fraudulently and illegally appropriate the same to their own use and benefit, and wholly refuse to permit the plaintiffs to have anything to do or say in the management of the affairs or business of said corporation.

Second. That, although the earnings of such gravel road are largely in excess of what it takes to keep the same in repair and pay the expenses of its officers and their salaries, the said defendants (Jaqua, Jaqua and Jaqua), acting as its officers, refuse to keep said road in repair and refuse to pay any dividends, but appropriate the said undivided proceeds to their own private use and benefit.

Third. That said defendants, acting as such officers of said corporation as aforesaid, to further cheat and defraud these plaintiffs, refuse and fail to keep accurate accounts of the receipts and disbursements, and refuse to keep the books thereof open for examination by the said plaintiffs or either of them.

Fourth. That said defendants Jaqua, Jaqua and Jaqua fraudulently conspire together, elect and keep in office Alonzo L. Jaqua, as secretary and treasurer of said corporation for the purpose of absorbing the earnings, profits, effects and moneys belonging to such corporation.

Fifth. That said defendants Jaqua and Jaqua, acting as the majority of the board of directors, under such conspiracy, have from time to time since the 1st day of January, 1880, and the day of -----, 1888, allowed and caused to be allowed large and exorbitant sums of money to Alonzo L. Jaqua, as his salary as secretary and treasurer, aggregating in the amount of five thousand dollars, which sum of money for such salary was unreasonable and unjust and was made and ordered to be paid by them for the purpose of absorbing the earnings, proceeds, profits and moneys belonging to said corporation.

Sixth. That the earnings, profits and moneys have amounted to the sum of twenty thousand dollars since the 1st day of January, 1880, which sum of money has been absorbed by the said defendants Jaqua, Jaqua and Jaqua, and to each of them, for the sole purpose of cheating and defrauding these plaintiffs and the other stockholders, not herein named.

Seventh. That said defendants Jaqua, Jaqua and Jaqua, having conspired together as aforesaid, to cheat and defraud these plaintiffs as aforesaid, have diverted the moneys, profits and earnings belonging to said corporation for the purpose of further absorbing the same, in this, to wit: The said Alonzo L. Jaqua caused to be purchased and did purchase a large fire and burglar proof safe at and for the price of fifteen hundred dollars, which safe was not needed in the business of the corporation, and was purchased without the knowledge or consent of the stockholders or the board of directors of said corporation, and which safe has been used since its purchase by the said Alonzo L. Jaqua in his own private business.

Eighth. That the said defendants Jaqua, Jaqua and Jaqua refuse to allow these plaintiffs to participate in any of the business transactions of said corporation, and refuse to make known any of the business meetings of said corporation to the stockholders, and refuse and neglected to give notice thereof to any of the stockholders, and especially these plaintiffs.

Ninth. That the said defendants Jaqua, Jaqua and Jaqua, having thus conspired as aforesaid to cheat these plaintiffs and the other stockholders, not named herein, refuse to permit these plaintiffs to examine any of the books or papers or accounts belonging to said corporation, but keep the same concealed and within themselves.

Tenth. That said defendant Alonzo L. Jaqua, having conspired as aforesaid with the defendants Judson A. and James B. Jaqua, for the purpose of cheating and defrauding the plaintiffs as aforesaid, has appropriated to his own private use as aforesaid moneys, rights, credits, effects, choses in action and property belonging to said corporation, the sum of ten thousand dollars.

Eleventh. That the said defendants Jaqua and Jaqua, having a majority of said stock, and having conspired together as aforesaid to cheat and defraud these plaintiffs and other stockholders aforesaid, refuse to elect any stockholder a director in said corporation who will not agree to elect the said Alonzo L. Jaqua secretary and treasurer of said corporation.

Twelfth. That the said defendants Jaqua, Jaqua and Jaqua have failed and refused to collect from persons travelling on said road toll to the amount of one thousand dollars.

Thirteenth. That said defendants Jaqua, Jaqua and Jaqua have failed and refused to account to the stockholders of said association for money, credits and effects and property received by them as officers of said corporation.

Fourteenth. That said defendants Jaqua, Jaqua and Jaqua, acting as directors of said association, have failed, neglected and refused to establish salaries of the officers of said corporation, have failed, neglected and refused to make and pass ordinances and by-laws as required by law for the government of said corporation, and have failed, neglected and refused to make correct financial statements to the recorder of Jay county, as required by law; that all statements that were made and recorded in the recorder's office of Jay county were incorrect and untrue.

Fifteenth. That the said defendants Jaqua, Jaqua and Jaqua refuse to bring any suit to compel an accounting by the officers, the secretary and treasurer of said corporation, but knowingly permit the said secretary and treasurer, the defendant, Alonzo L. Jaqua, to absorb, appropriate to his own use and benefit, and divert the income, earnings and profits of said corporation.

Sixteenth. That said defendants Jaqua, Jaqua and Jaqua, further conspiring together to cheat and defraud these plaintiffs and other stockholders not named herein, refuse to keep any books and accounts at the toll-houses and toll-stations by the gate-keepers on said road.

Seventeenth. That by the articles of association it is required that there should be elected from among the stockholders a board of five directors; that to fulfill such requirement, the said defendants Jaqua, Jaqua and Jaqua cause to be elected, and did elect, the defendants Christopher S. Arthur and Daniel Miller, as directors, well knowing that neither of them would take any part in the business of said corporation, or in the meetings of said board, and that they have wholly failed to have anything to do with the business transactions of said corporation, and knowingly stand by and witness the transactions of the said officers Jaqua, Jaqua and Jaqua, and refuse to bring any suit to compel any accounting from them, or either of them.

Eighteenth. That all orders for the payment of money out of the treasury of said corporation has been allowed by the defendants Jaqua, Jaqua and Jaqua, and no other persons.

Nineteenth. That the said defendant Alonzo L. Jaqua threatens to allow said gravel road to go down and become out of repair and worthless, and that he threatens to still absorb and appropriate all of the income and profits of said corporation if he is permitted to keep the control and management of the same.

Twentieth. That the defendants James B. and Judson A. Jaqua will, if suffered to do so, continue to keep the said Alonzo L. Jaqua in office as secretary and treasurer for the purpose of absorbing the earnings, income and profits of said corporation, and rendering the stock of these...