Trendley v. Illinois Traction Co.

• Citation: 145 S.W. 1
• Parties: TRENDLEY et al. v. ILLINOIS TRACTION CO. et al.
• Decision Date: 01 March 1912
• Court: United States State Supreme Court of Missouri

145 S.W. 1

TRENDLEY et al. v. ILLINOIS TRACTION CO. et al.

Supreme Court of Missouri.

March 1, 1912.

1. CORPORATIONS (§ 406) — OFFICERS — CONTRACTS OF DIRECTORS.

A contract entered into by the majority of the directors of a corporation when untainted by fraud, and within the scope of their authority, cannot be set aside by the courts merely because disadvantageous to the company.

2. CORPORATIONS (§ 406*)—ACTS OF DIRECTORS —CONTRACTS—SCOPE OF AUTHORITY.

While the directors of a corporation cannot, unless authorized by shareholders, put an end to its business and defeat the object of its creation by selling all of its property, yet the directors of an express company which had an exclusive contract with the carrier might enter into a new contract which gave them additional territory in exchange for their exclusive privilege of carrying express on a portion of the carrier's line; the directors being managers of the corporation and entitled to enter into contracts on its behalf.

3. CORPORATIONS (§ 298)—DIRECTORS—MEETINGS.

Where the notice calling a meeting of the directors of an express company stated that it was for the purpose of authorizing the president to enter into a contract with a carrier, a misdescription in the date of the contract did not defeat the legality of the meeting when none of the directors were misled or objected.

4. CORPORATIONS (§ 298)—DIRECTORS—MEETINGS —VALIDITY OF MEETINGS.

A director of a private business corporation cannot be forced to attend a meeting, and so where two of the directors of a corporation visited the office of the president, who was also a director, and whose office was that of the corporation, intending to hold a meeting against the president's will, and when he alone of the other three directors would be present, the attempted meeting was invalid, and a motion carried while the president was restrained from leaving the room is of no effect.

5. CORPORATIONS (§ 212*)—ACTIONS BY STOCKHOLDERS —VALIDITY OF ACT OF DIRECTORS.

In an action by the minority stockholders of an express company to set aside a contract made by the directors, evidence held to sustain the chancellor's finding that the contract was not the result of fraud, and to justify his decree discharging the receivers and dismissing plaintiff's bill.

6. EQUITY (§ 24)—JURISDICTION—SUBJECTS OF PROTECTION.

The court of equity never declares a forfeiture; its only interference in the subject being to prevent a forfeiture when conditions are such as to render it inequitable to allow it to be enforced.

7. CORPORATIONS (§ 211)—PLEADING—CROSS-BILL.

In an action by the minority stockholders of an express company for the cancellation of a contract between it and a carrier, the restoration of a previous contract and the annulment of a forfeiture of the second contract, the carrier in its answer set up, as by cross-bill, facts justifying its action in forfeiting the second contract, and praying the court to decree a forfeiture. Held, that the allegations of plaintiff's petition, averring that it would be inequitable to allow the forfeiture, having been controverted by general denial, the allegations justifying and praying the forfeiture were unnecessary and improper.

8. APPEAL AND ERROR (§ 1073) — REVIEW— HARMLESS ERROR.

In an action by minority stockholders of an express company for the cancellation of a contract between it and a carrier, the restoration of a former contract and the annulment of a forfeiture of the second contract, where the decree dismissed plaintiff's bill, a recital therein declaring the second contract to be canceled, forfeited, and of no effect was harmless, though erroneous.

9. APPEAL AND ERROR (§ 295)—REVIEW— QUESTIONS PRESENTED.

That part of a judgment directing receivers to deliver the property of an express company over to the president of the company cannot be reviewed, where plaintiffs did not assign that error as ground for their motion for new trial, and sought to raise the objection by motion to discharge the receivers, made several months after final judgment, and more than two months after the appeal has been taken.

10. APPEAL AND ERROR (§ 581)—BILL OF EXCEPTIONS —MATTERS EMBRACED THEREIN.

The ruling of the trial court on motions, made after final judgment and after appeal,

cannot be embraced in the bill of exceptions, and is improperly printed in the abstract of the record and bill of exceptions.

11. RECEIVERS (§ 191)—FINAL JUDGMENTS— NATURE.

As the final decree determines the rights of the parties on all matters in issue, it should, where there has been a receivership, direct the receiver to make disposition of the funds and property held by him, and require him to report his actions in obedience to the decree.

12. APPEAL AND ERROR (§ 863) — REVIEW — MATTERS REVIEWABLE.

Where a receiver's report, filed at a term subsequent to the final judgment, shows that he has acted contrary thereto, parties may except, but, if he has acted in accordance therewith, one deeming himself aggrieved can obtain review in the appellate court only on appeal from the judgment.

13. APPEAL AND ERROR (§ 544)—BILL OF EXCEPTIONS —NECESSITY.

Proceedings had on the report of the receiver made subsequent to a final judgment and in obedience thereto cannot be reviewed where no bill of exceptions was taken.

14. APPEAL AND ERROR (§ 66) — DECISIONS APPEALABLE—FINAL DECREE.

Appeals will lie only from final decrees; interlocutory decrees not being appealable.

In Banc. Appeal from St. Louis Circuit Court; M. G. Reynolds, Judge.

Action by Henry E. Trendley and others against the Illinois Traction Company and others. From a judgment for defendants, plaintiffs appeal. Affirmed.

Seddon & Holland and Schaefer, Farmer & Kruger, for appellants. T. R. Young and Daniel Dillon, for respondents.

VALLIANT, C. J.

This is a suit in equity wherein the plaintiffs are the minority stockholders and the minority directors, and the individual defendants are the majority stockholders and the majority directors of the defendant corporation the Electric Railway Express Company. The other defendants are the East St. Louis & Suburban Railway Company and the Illinois Traction Company, both of which are Illinois corporations. The object of the suit is to cancel certain contracts, whereby a previous contract between the East St. Louis & Suburban Railway Company and another corporation called the Electric Express Company, of date August 16, 1904, which contract had been duly assigned by the Electric Express Company to the defendant the Electric Railway Express Company, was modified or changed in certain important particulars. The ground on which the plaintiffs seek to have the contracts of which they complain set aside is that they were the result of fraud and conspiracy on the part of the individual defendants assuming to represent the Express Company on the one hand and the East St. Louis and Suburban Railway on the other. The East St. Louis & Suburban Railway Company at the time referred to owned and operated certain lines of railroad which extended from East St. Louis east and southeast, over which lines cars were propelled by electricity. The railroad company August 16, 1904, entered into a contract with a corporation called the Electric Express Company, whereby the latter company in consideration of a certain per cent. of its earnings to be paid to the railroad company was granted the exclusive right to do an express business over the line that that railroad company then owned or might thereafter acquire, and the railroad company was to furnish the express company cars for that business, and the express company was to furnish the railroad company an account of its earnings for each month on the 10th day of the month next following and pay the rate per cent. of its earnings agreed on to the railroad company on the 15th, and, on failure to render the account and to make the payment at the time specified, the railroad company had the right to cancel the contract.

The petition alleges that the exclusive right to do an express business over the lines of the East St. Louis & Suburban Railroad Company (which we will hereinafter call the Suburban Company) was of great value and the chief asset of the Electric Railway Express Company (which will hereinafter be called the Express Company). It is further alleged that the individual defendants as officers and directors of the Express Company "fraudulently and covinously" for their personal profit and the injury of the Express Company entered into "three pretended contracts" with the Suburban Company of dates, respectively, July 18, August 10, and November 6, 1906, whereby the valuable right held by the Express Company under the contract of August 16, 1904, was attempted to be annulled. At a special meeting of the board of directors of the Express Company held July 31, 1906, defendant Allen presented to the board for its approval a paper then unsigned dated July 16, 1906, in form of a proposed contract to be made between the Express Company and the Suburban Company, in which the Express Company was to agree, for the consideration therein expressed, to relinquish the exclusive feature of its contract of date August 16, 1904, and to authorize the Suburban Company to make a contract with the Illinois Traction Company allowing the latter to pass its cars carrying through express freight over certain lines of the Suburban Company. A full board was composed of five directors, but one director had resigned. The remaining four were present at that meeting. Three of those present voted to approve the contract and to authorize its officers to execute it on the part of the Express Company. One director voted no on the proposition. Two days after the adjournment of the meeting, August 2, 1906, one of the directors who had voted to approve the contract and authorize its execution notified Mr. Allen, the president of the Express Company, that he had examined the contract carefully,...