Va. Passenger & Power Co v. Fisher

Decision Date15 June 1905
CourtVirginia Supreme Court
PartiesVIRGINIA PASSENGER & POWER CO. et al. v. FISHER et al.

1. Decree — Appealability — Appointment of Receiver.

A decree of a state court appointing a receiver of property of a corporation, a receiver of which had previously been appointed in the federal court in a suit commenced after the commencement of the suit in the state court, authorizing the receiver to intervene in the other suit, and requests a vacation of the federal order, and a turning over of the property to the receiver of the state court, was an appealable decree, under Code 1904, p. 1836, § 3454, authorizing an appeal from a decree requiring a change in the possession of property.

2. Appeal—Scope of Review.

On appeal from a decree appointing a receiver of property of a corporation, all decrees and proceedings in the case were open to consideration and review.

3. Corporations—Injury to Corporation— Suit by Stockholders.

In order for a stockholder to sue on a cause of action in favor of the corporation, there must have been a demand on the directors or other managing body to institute proceedings, and a refusal so to do, or it must have been reasonably certain that a demand would have been useless.

[Ed. Note.—For cases in point, see vol. 12, Cent. Dig. Corporations, §§ 791-796.]

4. Same—Suit by Stockholders—Bill—Allegations—Sufficiency.

Where the conduct of one controlling the majority of the stock of a corporation constituted a wrong toward the corporation, it was not necessary that a stockholder should apply to the corporation at a meeting of the stockholders for action to redress the wrongs, as a condition precedent to the maintenance of an action by him for the appointment of a receiver.

5. Corporations—Action by Stockholders —Bill—Sufficiency.

In a suit by stockholders for the appointment of a receiver because of wrongs perpetrated against the corporation, the bill alleged that a certain defendant controlled a majority of the stock, and that, owing to his influence, certain persons had been elected directors, who held offices of trust in some of the numerous corporations controlled by him and his family, and that thereby he personally controlled the corporation; the directors colluding with him in acts of spoliation committed on its property. Held, that it not appearing what offices the directors held, and the allegation as to their being subservient to the wishes of the defendant in question being a conclusion, and there being nothing to show that any directors except the defendant in question would be benefited by the grievance complained of, the bill did not show a sufficient excuse for failing to apply to the directors for redress of the wrong complained of.

6. Same — Wrong against Corporation-Suit by Bondholders.

The proper party to bring a suit to foreclose a mortgage deed securing railroad bonds or to protect the property is the trustee, and a bondholder may not bring it unless the trustee has been requested and neglected so to do, or is in a position where he is unable to act.

7. Equity—Jurisdiction — Rights of General Creditors.

A general creditor cannot file a bill in equity to enforce a claim against a going concern unless he has first obtained a lien on the property, or it is otherwise provided by statute.

[Ed. Note.—For cases in point, see vol. 14, Cent. Dig. Creditors' Suit. § 51.]

Appeal from Hustings Court of Petersburg.

Suit by George E. Fisher and others against the Virginia Passenger & Power Company and others. From a decree in favor of complainants, defendants appeal. Reversed.

Christian & Christian and Munford, Hun-ton, Williams & Andersen (Frank W. Christian and Henry W. Andersen, of counsel), for appellants.

W. B. McIlwaine, Alexander Hamilton, L. L. Lewis, and Richd. B. Davis, for appellees.

BUCHANAN, J. The appellees, George E. Fisher, Charles Hall Davis, and Philip Rogers, filed their bill in the hustings court of the city of Petersburg against the Virginia Passenger & Power Company, the Charlotte & Prince Edward Electric Railway & Improvement Company, Frank Jay Gould, Helen Miller Gould, and William Northrup, trustee, in which they sue for themselves and all others who are stockholders or bondholders or creditors of the Virginia Passenger & Power Company who may come in and contribute to the costs of the suit. The number of shares of stock and the face value of the bonds which they own, respectively, is set out in the bill.

"The main purpose of the suit, " as stated by the trial court, whose opinion is filed with the record, "is the appointment of a receiver to take charge of the property rights, assets, and franchises of said Virginia Passenger & Power Company, and operate the same under the direction of this court until the debts outstanding against said company, with their dignities and priorities, have been established, and for a sale of said property rights and franchises under the direction of this court, and the 'proceeds applied to the payment of the debts of said company in the order of their priorities as so established.

"Incident to said relief, the complainants pray that the defendants be enjoined until the further order of this court, namely:

"(1) Frank Jay Gould and Helen Miller Gould from disposing of the shares of stock and bonds of the Virginia Passenger & Power Company acquired by them under a certain agreement, bearing date December 23, 1902, commonly known as the 'Adjustment Agreement.'

"(2) Frank Jay Gould and the Charlotte & Prince Edward Electric Railway & Improvement Company from disposing of the notes or other evidences of debt executed by the Virginia Passenger & Power Company in connection with the purchase of the Richmond & Petersburg Electric Railway Company, or of the said stock and bonds which are claimed to be held by them as collateral security for said notes or other evidences of debt.

"(3) William Northrup, trustee, from selling or otherwise transferring to the Charlotte & Prince Edward Electric Railway & Improvement Company, or to any other person or corporation, any of the lands abutting upon the Appomattox river necessary for the development of the water power of said river, now held by him as such trustee."

The defendants demurred to and answered the bill. Upon the hearing of the cause, upon the motion of the complainants for the appointment of a receiver, and for injunctions as prayed for upon the pleadings, exhibits, and affidavits filed, the court overruled the demurrer, and appointed a receiver of all of the assets and property of the Virginia Fassenger & Power Company, and directed him to hold the same as the officer of, and under the direction of, the court. From that decree this appeal was allowed.

The first question to be considered is the motion of the appellees to dismiss the appeal as improvidently awarded, because that decree was not an appealable decree under the provisions of section 3454, p. 1830, of the Code of 1904.

It is well settled that an appeal lies from a decree appointing a receiver, whereby a change in the possession or control of the property is required. Smith v. Butcher, 28 Grat. 144; Shannon v. Hanks, 88 Va. 338, 13 S. E. 437; Deckert v. Chesapeake Western Co., 101 Va. 804, 45 S. E. 799.

It is insisted by the appellees that the decree appealed from does not, on its face, require the receiver to take possession of any property, nor does it require any one to deliver property to him.

At the time the receiver was appointed, the property of the Virginia Passenger & Power Company was in the hands of receivers of the Circuit Court of the United States for the Eastern District of Virginia, appointed in the case of the Bowling Green Trust Company, trustee, against Virginia Passenger & Power Company and others instituted after this suit was brought and the motion made for the appointment of a receiver in the hustings court In appointing a receiver in this case, the hustings court proceeded upon the theory, as is apparent from its decree, that the proceedings therein had given it jurisdiction of the subject-matter of the suit and the parties to it before the suit in the federal court was instituted, and that, as soon as the facts were properly brought to the attention of that court, it would, out of regard to that comity which exists and must exist between the state and federal courts in such cases, if there is to be an orderly administration of justice, dismiss its receivers. 2 Cook on Stockholders (3d Ed.) § 839, and notes.

Acting upon this view, the hustings court appointed its receiver, and directed him to intervene by petition or other proper proceeding in the cause of the Bowling Green Trust Company v. Virginia Passenger & Power Company, etc., and request that court to vacate its order appointing receivers for the property in question, and direct them to turn over and deliver the property held by them to the receiver of the hustings court. And he was authorized and directed to take and receive from the receivers of that court the possession of all the property of the Virginia Passenger & Power Company, wherever situated, and generally to conduct all its business as a common carrier of passengers and freight, and to discharge all of the other public and private duties of that company. No further or other order was necessary on the part of the hustings court to authorize its receiver to take possession of the property when the federal court surrendered possession of it, as it might have done but for the fact that this appeal and supersedeas was granted before application was made to that court by the receiver as directed.

We are of opinion, therefore, that the decree appointing the receiver in this case is an appealable decree, and that the motion to dismiss the appeal as improvidently awarded must be overruled.

The case being properly before this court upon appeal, all decrees and proceedings therein are subject to consideration and review. Deckert v. Chesapeake Western Co.,...

To continue reading

Request your trial
36 cases
  • Punch v. Hipolite Co., 32944.
    • United States
    • United States State Supreme Court of Missouri
    • December 14, 1936
    ...Co. et al. v. Palm, 21 So. 315; Baille v. Columbia Gold Mining Co., 166 Pac. 965; Law v. Fuller, 217 Pa. 439; Virginia Passenger & Power Co. v. Fisher, 104 Va. 121, 51 S.E. 198; Brewer v. Boston Theater, 104 Mass. 378. (2) In the absence of fraud, a director of a corporation may purchase th......
  • Ames v. Am. Nat. Bank Of Portsmouth
    • United States
    • Supreme Court of Virginia
    • September 20, 1934
    ...requested so to do by the complaining stockholders. Liggett v. Roanoke Water Co., 126 Va. 22, 101 S. E. 55; Virginia Pass. & Power Co. v. Fisher, 104 Va. 121, 51 S. E. 198; 13 Fletcher, Cyc. Corp. (Perm. Ed.) § 5944 et seq., and particularly sections 5963, 5966, 5970. They are also entitled......
  • Ames v. American Nat. Bank
    • United States
    • Supreme Court of Virginia
    • September 20, 1934
    ...though requested so to do by the complaining stockholders. (Liggett Roanoke Water Co., 126 Va. 22, 101 S.E. 55; Virginia Pass. & Power Co. Fisher, 104 Va. 121, 51 S.E. 198; 13 Fletcher, Cyc. Corp. Perm. Ed. section 5944 et seq., and particularly sections 5963, 5966, 5970.) They are also ent......
  • Red Bud Realty Company v. South
    • United States
    • Supreme Court of Arkansas
    • May 1, 1922
    ...... Company (hereafter called insurance company), and the Dixie. Power Company (hereafter called power company) as defendants. Among other things he alleged that Powell ... v. Amer. Tube Works, 188 Mass. 515, 74 N.E. 680;. Virginia etc. Co. v. Fisher, 104 Va. 121;. Williams v. Erie Mt. Consol. Mining. Co., 91 P. 1091; Chicago Cab Co. v. ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT