Wightman v. San Francisco Bay Toll-Bridge Company

• Decision Date: 18 July 1928
• Citation: 142 A. 783,16 Del.Ch. 200
• Parties: SIMON G. WIGHTMAN, v. SAN FRANCISCO BAY TOLL-BRIDGE COMPANY, a corporation of the State of Delaware; SAN FRANCISCO BRIDGE SECURITIES CORPORATION, a corporation of the State of Delaware; LEONARD KENNEDY, LEONARD D. BALDWIN and JOHN H. DINKINS, Voting Trustees; MARGARET TOWNS, Executrix of the Estate of Frank C. Towns, deceased; DILLON, READ & CO., a corporation of the State of Delaware; G. HERMAN KINNICUTT, SAMUEL L. FULLER, FRANK J. HUMPHREY, G. FREDERICK HAWKINS, PHILLIP M. HAYES, WILLIAM FERGUSON, WALTER ROBBINS, and others, a co-partnership trading as Kissel, Kinnicutt & Co.; RAYMOND CONCRETE PILE COMPANY, a corporation of the State of New Jersey; ROBERT HENRY SELLERS, ROBERT LEE DUNN, JOHN C. EAMES, W. H. METSON, JOHN DOE, Executor of the Estate of Willard B. Hosmer, deceased; MARK E. NOON, A. W. DEUEL, FRED W. DENNIS, J. F. CLEAVELAND, RALPH KIRKMAN, H. R. DILLINGHAM and DANTE DIANDA; JOHN T. WILLIAMS, J. FRED MACDONALD and JAMES RALEIGH KELLY, a co-partnership trading as Williams, Kelly & MacDonald; AMERICAS HOLDING CORPORATION, a corporation of the State of New York; and SAMUEL BLOCK and HENRY L. GOTHAM, Intervenors
• Court: Court of Chancery of Delaware

142 A. 783

16 Del.Ch. 200

SIMON G. WIGHTMAN, v. SAN FRANCISCO BAY TOLL-BRIDGE COMPANY, a corporation of the State of Delaware; SAN FRANCISCO BRIDGE SECURITIES CORPORATION, a corporation of the State of Delaware; LEONARD KENNEDY, LEONARD D. BALDWIN and JOHN H. DINKINS, Voting Trustees; MARGARET TOWNS, Executrix of the Estate of Frank C. Towns, deceased; DILLON, READ & CO., a corporation of the State of Delaware; G. HERMAN KINNICUTT, SAMUEL L. FULLER, FRANK J. HUMPHREY, G. FREDERICK HAWKINS, PHILLIP M. HAYES, WILLIAM FERGUSON, WALTER ROBBINS, and others, a co-partnership trading as Kissel, Kinnicutt & Co.; RAYMOND CONCRETE PILE COMPANY, a corporation of the State of New Jersey; ROBERT HENRY SELLERS, ROBERT LEE DUNN, JOHN C. EAMES, W. H. METSON, JOHN DOE, Executor of the Estate of Willard B. Hosmer, deceased; MARK E. NOON, A. W. DEUEL, FRED W. DENNIS, J. F. CLEAVELAND, RALPH KIRKMAN, H. R. DILLINGHAM and DANTE DIANDA; JOHN T. WILLIAMS, J. FRED MACDONALD and JAMES RALEIGH KELLY, a co-partnership trading as Williams, Kelly & MacDonald; AMERICAS HOLDING CORPORATION, a corporation of the State of New York; and SAMUEL BLOCK and HENRY L. GOTHAM, Intervenors

Court of Chancery of Delaware, New Castle

July 18, 1928

MOTION TO VACATE ORDER APPOINTING SEQUESTRATOR. The bill alleges an agreement whereby the profits derived from a joint venture in the construction of a toll-bridge over San Francisco Bay in the State of California were to be divided between the parties interested in certain designated proportions. The profits referred to are alleged to be in the form of 120,000 shares of stock of the defendant, San Francisco Bay Toll-Bridge Company, a Delaware corporation, or their equivalent in the form of shares of stock of San Francisco Bridge Securities Corporation, a holding company, organized under the laws of this State. It is alleged by the bill that the complainant, as one of the joint parties in interest, was entitled under the terms of the agreement to 6,000 of the shares representing the profits, but that the persons in whose names the total 120,000 shares were placed for division among the parties, instead of so distributing them as to give the complainant the number he is entitled to, have in fraud of the complainant's rights ignored the complainant in the distribution and divided the stock contrary to the terms of the agreement among only a portion of the parties entitled. The bill seeks to secure for the complainant the portion of the shares to which he claims to be entitled. It thus is a bill which in substance seeks a re-partition of personal property to the extent at least of the complainant's share therein, the partition already made being charged to have unjustly excluded the complainant, and in that respect to have violated the terms of the agreement among the parties.

The other parties in interest among whom the share-profits were divided are all non-residents.

Upon the filing of the bill, the complainant asked for and was granted an order appointing a sequestrator to seize all the stock standing on the corporate books of the San Francisco Bay Toll-Bridge Company and of the San Francisco Bridge Securities Corporation in the names of the non-resident defendants among whom the same have been distributed as aforesaid, and directing subpoenas to issue to the defendants requiring them to appear on or before a specified date and that copies of the process be sent by mail to each of the non-resident defendants.

The sequestrator in obedience to the order seized the stock by entering on the corporate books that the shares are now held by him.

The individual defendants whose shares were thus seized, upon leave have entered special appearances, and now move for a vacation of the order of sequestration, and for a release of the shares seized thereunder.

In disposing of the motion the ensuing opinion was filed by the Chancellor.

Order for sequestration vacated and the stock seized directed to be released.

James I. Boyce, for complainant.

Robert H. Richards, specially, for voting trustees Kissel. Kinnicutt & Co., and Raymond Concrete Pile Company.

John Biggs, Jr., and David L. Podell, of New York City, for Towns Noon, Deuel, Dianda, and Williams, Kelly & MacDonald.

E Ennalls Berl, of the firm of Ward & Gray, for Robert Lee Dunn, John C. Eames, and W. H. Metson.

Leonard G. Hagner, for Dennis, Kirkman, Cleveland, Dillingham, Block and Gotham.

OPINION

THE CHANCELLOR

The reasons which the moving defendants advance in support of their motions are:

1. That the sequestration or seizure was made without due process of law.

2. That the Chancellor is without power or jurisdiction to make such an order.

3. That the Chancellor is without power to make such sequestration or seizure.

4. That said sequestration or seizure is not according to law.

The act under which the seizure is sought to be justified is found in Chapter 217, Vol. 35, Laws of Delaware, approved April 12, 1927. The act is an amendment of paragraph 3850, § 7, of the Revised Code of 1915. The said paragraph, as amended by the Act of April 12, 1927, reads as follows:

"3850 SEC. 7. ORDERS FOR APPEARANCE; UPON FAILURE OF SERVICE AND AFFIDAVIT; PUBLICATION OF; UPON DEFAULT; DECREE PRO CONFESSO ENFORCEMENT BY SEQUESTRATION OR DELIVERY OF PROPERTY DEMANDED; PAYMENT UPON SECURITY FOR

RESTITUTION; PROCEEDINGS IF SECURED NOT GIVEN: FOREIGN ATTACHMENT:--If, after subpoena or other process issued, any defendant therein named shall not appear in obedience to said process and according to the rules of the Court, the Court may, on affidavit that such defendant is out of the State, and cannot be found to be served with process and that there is just ground to believe that he intentionally avoids such service, make an order for his appearance on a certain day and give notice of such order as the Chancellor shall direct. And if the defendant shall not appear, after such notice, according to such order, the Court may order the plaintiff's bill to be taken pro confesso, and may thereupon issue process to compel the performance either by sequestration of the real and personal property of such defendant or part thereof, sufficient to satisfy the plaintiff's demand, or by causing possession of the estate, or effects, demanded by the bill, to be delivered to the plaintiff, or otherwise, as the case requires. And the Court may also order the plaintiff to be paid his demand out of any property so sequestered, upon his giving approved security, in a sufficient sum, to abide any order of the Court for the restitution thereof upon the defendant's appearing to defend the suit, and paying such costs as the Court shall order. If such security be not given, the property sequestered, or whereof possession shall be decreed to be delivered, shall remain under the direction of the Court in the hands of a receiver or otherwise, until the defendant's appearance, or until such order shall be made therein as the Court shall think just.

"If it shall appear in the bill of complaint that the defendant or any one or more of the defendants is a non-resident of the State of Delaware, the Chancellor shall have power to compel the appearance of the defendant by the seizure of all or any part of his property, which property may be sold under the order of the Chancellor to pay the demand of the complainant if the defendant shall not appear, or shall otherwise default. Such property shall remain subject to said seizure and may be sold to satisfy any decree made in the cause, unless security sufficient to the Chancellor shall be given to secure the release thereof. The Chancellor shall have power to make all necessary rules respecting the form of process, the manner of issuance and return thereof, the release of such property from seizure and for the sale of the property so seized....