Westcott v. Minnesota Mining Co.

• Decision Date: 07 July 1871
• Citation: 23 Mich. 145
• Court: Michigan Supreme Court
• Parties: Edward G. Westcott and others v. The Minnesota Mining Company and others

23 Mich. 145

Edward G. Westcott and others v. The Minnesota Mining Company and others

Supreme Court of Michigan

July 7, 1871

Heard April 19, 1871; April 20, 1871.

Appeal in chancery from Wayne circuit.

The opinion contains a sufficient statement of the nature of the pleadings and of the facts proven.

Decree of the circuit court in chancery, dismissing the bill affirmed, with costs.

A. F Wilcox, Levi Bishop, G. V. N. Lothrop, and S. A. Goodwin, for complainants.

Samuel T. Douglass, for defendants.

Cooley J. Christiancy and Graves, JJ., concurred. Campbell, Ch. J. did not sit in this case.

OPINION

Cooley, J.:

This case is a sequel to that of Titus v. The Minnesota Mining Co., reported in 8 Mich. 183. The pleadings are exceedingly voluminous and the facts complicated, but the following, it is believed, is a sufficient statement of the case to make the decision of the court sufficiently clear:

The bill in the Titus case was for the purpose of compelling the defendants to deliver to complainant, for himself and associates, whom he claimed to represent, one-fifth of its capital stock, and to account to him for the profits of the company in the like proportion. On the final hearing, certain defects in parties were pointed out by the court, and the bill was dismissed. Afterwards the present suit was commenced, and is now brought to a hearing in the name of Edward G. Westcott, Henry R. Pierson, James R. Westcott, George Kimball, Marion Brinkerhoff, Jonas H. Titus, Jr., Catharine Titus, Omar D. Conger, Gertrude M. Galloway and Daniel A. Galloway, as complainants against the Minnesota Mining Co., Samuel O. Knapp, William Hickok, Enoch C. Roberts, Frederick W. Allen, Charles E. Smith, Samuel J. W. Barry, John Gilbert, Charles Lambert, Joseph M. Smith, Samuel Congdon, Elwood Burdsall, J. R. Burdsall, Joshua Gilbert, Horatio N. Davis and Joseph Trevor, as defendants.

The material allegations on the part of the complainants are the following:

In 1845 Jonas H. Titus, Smith Titus, Myron Titus, Platt S. Titus, Omar D. Conger, Walter Buddington, John McReynolds, Andrew T. McReynolds, Ira C. Backus, John H. Harmon and Asahel S. Bagg formed themselves into a copartnership in mining operations, under the name of the Baltimore Mining Company; that such company became owners of two leases of lands for copper mining, in the Lake Superior district, numbered respectively 267 and 269; that on November 22, 1846, these leases were sold by the company to William Hickok for the use of himself and associates, and assigned to the said Hiekok on the terms and conditions following: That said Hickok and his associates should form a company in the city of New York for mining purposes; the stock to be represented by four thousand equal shares, of which eight hundred paid up and unassessable shares should be issued within sixty days to the associates of the Baltimore company, as the consideration for the assignment of said leases; that on or about November 30, 1846, said Hickok, with Enoch C. Roberts, Samuel O. Knapp, William Pearsall, Jr., Daniel A. Galloway, Charles Edgar Smith, Joshua Gilbert, Frederick W. Allen, Elwood Burdsall, Horatio N. Davis, Jacob Trevor, Samuel J. W. Barry and Charles Lambert as associates, did form the proposed mining company, under the name of the Vulcan Mining Company, and in their articles of association the said leases were declared to be purchased by said Vulcan Mining Company, and it was recited that such company was formed, among other things, to prosecute mining on the land specified in said two leases, or on any lands in said mineral district that might be leased, located or bought by said Vulcan company for mining purposes; that it was also further declared by said articles that the stock of said Vulcan company should be represented by four thousand shares, of which one thousand shall remain unassessable forever, and that eight hundred of these should be transferred to said Baltimore Mining Company; that either as original members, or as purchasers of shares of stock therein, the defendants Hickok, Roberts, Allen, Pearsall, C. E. Smith, J. M. Smith, Congdon, Knapp, Barry, Gilbert, Lambert, E. Burdsall and J. R. Burdsall, and the complainant Daniel Galloway are now the owners of all the rights in the stock and property of the Vulcan Mining Company; that the premises described in said leases 267 and 269 were afterwards judged not to be valuable for mining, and the said Vulcan company, in November, 1847, purchased of the Ontonagon company one-half of the location known as No. 98, for mining purposes, taking an assignment of the lease thereof in the name of William Hickok, its then treasurer, but that afterwards, and with intent to defraud the associates of the Baltimore company of their one-fifth interest in the Vulcan company, said Hickok and the other associates in the last mentioned company proceeded to form a new company by the name of the Minnesota Mining Company, for mining on said one-half of location 98; the formation of said new company being merely a fraudulent device to give color of regularity and fairness to the proceedings of said Hickok and his confederates, in their design to defraud the Baltimore Mining Company of their said one-fifth interest in said purchase and its fruits; that said Minnesota Mining Company was in fact identical with said Vulcan Mining Company, each associate therein receiving at its organization the same number of shares held by him in the Vulcan company; that said Minnesota company afterwards became incorporated, and carried on mining operations on said half of location 98, and that the said half of location 98, after having paid all the expenses incurred in its development and workings, and large dividends for many years, is now worth large sums of money.

The complainants then proceed to aver the right of the associates of the Baltimore company to the one-fifth interest in said Minnesota company and to an account of the profits thereof; they associate Daniel Galloway with themselves as complainant, with his assent, because since the transactions described he has intermarried with the complainant Gertrude M. Galloway, formerly Davis, one of the shareholders of the Baltimore company; they omit the name of William Pearsall, Jr., as defendant, on the allegation that he died in 1867, in the state of New Jersey, being then a resident of that state, but at what place they are unable to discover, and that "since he died they have diligently inquired and made efforts to ascertain where and who his heirs and legal representatives were, so as to make them parties to the suit, but have not been able to ascertain who or where they are," though they are informed they are all non residents of Michigan, and their interests are small and well represented by the persons now parties to the suit; they aver that the Baltimore Mining Company still subsists under its articles, and that the complainants, either as original members or as purchasers of shares in said company, are (except as hereinafter stated) the owners of all rights, titles, interests, claims, estate and property in said company. The exception relates to two hundred shares of unassessable stock, which, by the original articles of said company, were to be disposed of, and the proceeds applied to the use of said company, before assessments were made on the other stock. In respect to these the averments are as follows: "All of said two hundred shares were disposed of and the proceeds expended for the use of the company before any assessment was made; that no assessment was made for more than sixty days after date of said articles; that on July 28, 1846, ten shares of said two hundred shares were sold to the defendant Charles Edgar Smith; that on July 29, 1846, ten other of said two hundred shares were sold to one Calvin Sweezey; that on August 1, 1846, ten other of said two hundred shares were sold to the defendant Frederick W. Allen; that on September 28, 1851, fifty other of said two hundred shares were sold to the complainant Jonas H. Titus, Jr., who is now the owner thereof; that the other one hundred and ten of said two hundred shares were also sold long before October 3, 1851, and the sales thereof were entered in a memorandum book of sales, and said book was lost or mislaid without such sales having been entered in the regular books of the association, and therefore your orators cannot tell or set forth who the purchasers were of said one hundred and ten shares; that complainants have made diligent efforts to ascertain where and who were the purchasers and owners of the said one hundred and ten shares, and where and who were the owners of said forty shares purchased as aforesaid by said Smith, Chadwick, Sweezey and Allen, but without success. Your orators charge the said defendants Charles E. Smith and Frederick W. Allen are now the owners of the shares thus purchased by them, and if it shall turn out that they, or either of them, are not such owners, your orators do not know or where the owners thereof are, but your orators charge that they, whoever they may be, are not residents of the state of Michigan, and therefore your orators pray to be permitted to prosecute the suit as it is, and when such owners shall be discovered, if they shall be, your orators pray leave to make them parties to the suit by proper amendment and process. Your orators do not know whether said Sweezey and Chadwick are the owners of the shares thus purchased by them, nor do your orators know where said Sweezey and Chadwick, or whoever may be the owners of the shares thus purchased by them, reside; but your orators charge that they are non-residents of Michigan, and therefore your orators pray that they may be permitted to go on with the...