Troutman v. Council Bluffs St. Fair & Carnival Co.

• Decision Date: 08 April 1909
• Parties: TROUTMAN v. COUNCIL BLUFFS STREET FAIR & CARNIVAL CO. ET AL.
• Court: Iowa Supreme Court

142 Iowa 140

120 N.W. 730

TROUTMAN

v.COUNCIL BLUFFS STREET FAIR & CARNIVAL CO. ET AL.

Supreme Court of Iowa.

April 8, 1909.

Appeal from District Court, Pottawattamie County; N. W. Macy, Judge.

Action to have a receiver appointed to wind up the affairs of the defendant as a pretended corporation or a copartnership, and to have its funds disposed of as justice and equity might require. There was a trial on the merits, at the conclusion of which the court dismissed plaintiff's petition, and he appeals. Affirmed.S. B. Wadsworth, for appellant.

Harl & Tinley, for appellees.

McCLAIN, J.

In 1903 the plaintiff, with seven others, who are made defendants, attempted to organize the defendant corporation, which was to have a capital stock of $10,000, divided into 200 shares of $50 each, to be paid for in money or property as the board of directors might determine, and each of the parties thus associating themselves together subscribed for one share, for which they gave their respective notes, which have never been paid. The object of the corporation was to organize and conduct annual commercial and industrial street fairs and carnivals in the city of Council Bluffs, and to acquire, by purchase or lease, the necessary grounds, buildings, rights, and privileges for that purpose. The power to conduct the affairs of the corporation was vested in a board of directors of eight members, which was authorized to elect officers. The board of directors was to be elected annually from the stockholders, and the incorporators constituted the first board, being equal in number with the membership of the board. The corporation had the right to conduct the business for which it was organized with the view of earning a profit, and the incorporators and stockholders were not to share in any manner in the profits, or receive any portion of the earnings as dividends or otherwise, but annually the amount of profits earned was to be ascertained by the board of directors, and at least 75 per cent. thereof expended for some charitable purpose or public enterprise or donated to some charitable, public, or benevolent organization, the balance to be set aside to meet any future losses and repay any advances made by the stockholders to the corporation, and it was further provided that, should the corporation cease business, or become dissolved by limitations, or otherwise, all money remaining in the treasury, excepting the amount derived from the sale of stock, shall be donated to some benevolent institution, or to some charitable purpose or public organization, to be expended for some charitable purpose or public enterprise. In the disposition of profits the board of directors is given absolute authority. The plaintiff was chosen secretary of the board of directors, and continued in office for three years, during which time he received a small salary. No other salaries were paid to officers or directors.

The corporation proceeded to conduct street fairs and carnivals from year to year in pursuance of the authority which, by the purport of its articles, was given to it, and during the first three years accumulated a fund of about $16,000, over $12,000 of which was invested, by the board of directors, in purchasing outstanding or unredeemed stock of the Elks' Building Association, a corporation organized to erect a building for the Council Bluffs' lodge of the Benevolent Order of Elks, for which the lodge was to pay rent so long as the stock was outstanding. One of the directors of the defendant corporation, being a member of the Elks' Lodge, tendered this stock to the lodge as a present, but the lodge refused to receive it, on the ground that there was some order of the grand lodge prohibiting subordinate lodges from being in any way connected with, or party to, the giving of street fairs and street...