8. In reference to the question of interest raised by couDsel for Harvey and others, the court is of the opinion that Harvey and those united with him are bound for interest at the rate of 8 per cent. from maturity of the note until the money was paid into court. Interest when the money was so paid. If interest has been paid in excess of the amount here indicated it will be refunded.
CUircuit Gaure, E. n. Penn8ylflania. July I, 1881.)
OORPORATION-STOCKHOLDER'S BILL-EQUITABLE RELIEF-FAMILY COMBmATION.
It is sufficient ground for equitable interference that complainant, who is a stockholder of a corporation, alleges that the officers of the corporation, who are members of one family and own a majority of the stock, have combined to appropriate the profits of the corporation in the form of salaries, and through a contract with It firm of which they are members, and have also combined to keep complainant in ignorance with regard to these transactions.
Demurrer to Bill in Equity. This was a bill by George H. Sellers against a corporation known ",8 the' Phoonix Iron Company, and against its officers and directors individually. The allegations of the bill were in substance:
'fhat the Phrenix Iron Company was originally organized out of the firm of Reeves; Buck & Co., which was composed of David Reeves, Samuel J. Reeves, Robert S. Buck, and Samuel A. Whitaker, and that at the time of the incorporation the said Robert S. Buck withdI:ew, the stock being divided among the remaining members of the firm, with the exception of a few shares transferred to employes to provide for filling the offices and the board of directors; that David and Samuel J. Reeves afterwards died, but that their stock continued to be held, and Was still held, by their families; that complainant lIad become the owner by purchase of the stock originally owned by Samuel A. Whitaker, but that all the other stock wa!! held by the families of sai!! David and.Samuel J. Reeves, most of it, amounting to a large majority oftQe whole capital stock, being held or controlled by David Beev.es, son. of Samuel J. Heeves, and by William H. Reeves, either ill their own names or as trustees under the will of Samuel J. Reeves; that said David Reeves was president of thecorpotation, and William H. Reeves one of the directors; that the business of the corporation was extensive and prosperous,but that the profits were absorbed by excessivE\ salaries to the oipcers; that instead of making its contracts for bridge 1?llilding, which was an branch of its directly with .its customers, the corporation had entered ,into an agreement with the firm of Clarke, Reeves & Co., of which flrm David Reeves and Will.
*Reported by P. Prichard Esq., of the Ph'!adelp III bllr.
SELLERS V. PHCENIX IRON CO.
iam H. Reeves were partners, the terms of which agreement were concealed from complainant, but which obliged the corporation to take all contracts for bridge building in the name of the firm, and to divide the profits with the firm in a proportion not known to complainant; that the corporation had spent large sums in unnecessary and costly improvements; that although it had made large profits the dividends declared were very small; that complainant was refused all information with regard to the affairs of the corporation, and denied access to the books and papers; and that although he had attended the meetings of the stockholders and endeavored to obtain information, he had . been defeated by the majority of the stock controlled by the Reeves family.
The bill prayed(1) For an account of the assets and liabilities of the cerporation and of the receipts and disbursements since complainant became a member; (2) that the president and board of directors he compelled to divide the profitsp1'O rata among the stockholders; (3) that they be enjoined from expending in capital improvements sums which ought to be divided as profits; (4) that they make discovery by production of the bQoks and papers of the corporation; (5) that the sums improperly drawn from the corporation might be returned; (6) that disclosure be made of all sums made out of dealings with the corporation by any firm ot which its directors were partners; (7) that all dealings between t)1e corporation and such firm be enjoined; (8) that all moneys due by the president or directors bepald to the corporation. .
To this bill respondents Samuel W. Pennypacker and John G. 'Johnson, for complainant. Carmll S. Tyson, R. C. McMurtrie, and Wayne MacVeagh, for respondents. BUTLER, D. J. While the bill in this case is inartificially and loosely drawn, and contains much irrelevant and impertinent matter, it substantiallyeharges that the stock of the corporation, in which the plaintiff is a shareholder, is mainly owned by the members 'of one family, who combine to manage the affairs of the corporation in such way as to subserve their own individual interests, to the prejudice of the plaintiff's rights; that David Reeves is president, and William H. Reeves, Carroll./ S. .Tyson, Charles R. Scull, and John ' . . Griffin are directors; that the directors pay tq themselves large and excessive jalaries as officers .of the company; that notwithstanding the chief business of the corporation is, Or was. intended to be, the building of bridges,ihe president and directors have entered into an agreement with the firm of Clatke,Reeves & Co., nnderwhich':agree. ment contracts for' bridges are taken in the of.tb:E\'ltrm.,' and the benefits divided between It and the company, in proportions ,unknown to the plaintiff; that a majority of the members of said firm' are
managers and officers of the corporation,-to wit, David Reeves, the president, John Griffin, director and superintendent, and William S. Reeves,'director ahd assistant superintendent,-who as such members of said firm make large profits at the expense of the corporation, by means of imlawful contracts which they as such managers and officers enter into, to the preju'dice of the corporation; that the plaintiff has sought information respecting the affairs of the company-the sal. aries paid to its officers, and the character of its dealings with said firm, but the defendants, members of the said family, or subject to its control, have combined to keep him ,in ignorance,by withholding such inforll;lation and refusing access to books and papers from which it might be obtained; that the plaintiff attended a meeting of stockholders and there sought redress, but that his efforts were rendered fruitless by reason of the conduct of the defendants, who combined against him, for that purpose. The foregoing statement embraces legitimate ground for equitable sl,lhstanoe, .that the defendants, members of one family, and principal owners of the stock, have unlawfully combined to abstract the property of the corporation and apply it to their own use in the form of salaries, and profits of the firm of Clarke, Reeves & Co., and to keep the plaintiff in ignorance of their transactions in this respect. ,To this extent, and to this only, the bill must be allowed to stand. So much of the demurrer as relates to the first, second, third, and seventh prayeX's of the bill, and the statements touching the same, is therefore sustained. As respects all other causes of demurrer assigned, the said dem:ttrrer is overruled, without prejudice, however; .to the defendants hereafter.
C. & A. B.
& Co. v. ANGLO·AJIIEBIOAN PAOKING Co.
v. A. C. & A. B.
(Circuit Court, W. D. Tenn688U. July
f\A:r.J1:S-TERV8 OJ' CONTRAOT-ClCtniBD MEAT."
W,here aeale of "cured meat" was made by a broker to a merchant at Memphis, that term is to be interpreted according to the the trade at Memphis', and not according to that where the seller resided, if there be any aubstantiill difference between the two. ' , .