ercise of the right of appropriation belongs exclusively to the debtor and creditor. No third party can be heard for the purpose of compelling a different appropriation from that agreed upon by them. 2 Whart. Cont. § 926. A surety cannot compel such an application of payments by.the creditor as would most relieve him. ld. Judge STORY says the "right of appropriation is one strictly existing between the original parties, and no third party has any authority to insist upon an appropriation of such money in his own favor, where neither the debtor nor the creditor have made or required any such appropriation." Gordon v. Hobart, 2 Story, 243, 264.
See Nichols v. Knowles, 17 l!'ED. HEP. 494, and note, 495.-[ED.
CONVERSE and others v. DIMOOK and others·
. (Oircuit (Jourt, S. D. New York. December 13, 1884.)
CoRPORATION-ELECTION OF DIllECTORS-MIBMANAGEMENT-RrGHTS OF STOCKHOLDERS.
Where a corporation, by contract not impeached, acquires a majority of the capital stock of another corporation, and through the control thus acquired elects new directors, and the latter corporation fails to fulfill its part of the contract, the stockholders of the former company, on the sole ground that the acts of such directors are highly to the property and interests of the company, will not be entitled to an injunction against their further acting as directors and officers, and the appointment of a receiver of the property.
In Equity. Jfarsh, Wilson tt Wallis, for complainants. Simpson tt Werner, for defendants Bankers' & Merchants' Telegraph Co., and Newcombe & Smith, as receivers. Geo. Putnam Smith, for defendants Dimock and others. Henry G. Andrews, for defendant Robeson. WHEELER, J. The bill is the foundation of all the proceedings in the case, and no relief can properly be granted, either temporary or final, beyond what the allegations of the bill will warrant. According to the bill, the defendant the Bankers' & Merchants' Telegraph Company, by contract not impeached, acquired a majority of the capdefendant the American Rapid Telegraph Company, ital stock of and through this control the other defendants have been elected directors and officers of the Rapid Company, and the Bankers' & Merchants' Company has not fulfilled its part of the contract by which the stock was acquired. Various acts and omissions of the defendants who are directors and officers of the Rapid Company are Sbt forth as being highly detrimental to the property and interests of that company, and an injunction against their further acting as directors and officers, and a receiver of the property, are asked pending the
litigation. The lawfulness of the election of the directors and officers is not denied; for aught that appears, the orators and all the other stockholders voted for th'em. The substance of the claim made is that they are managing the affairs of the company contrary to its interests, and that the orators, as stockholders, have the right to have the management taken by the court, through a receiver, out of their hands, and his management secured from their interference by injunction against them. The bill in no manner states or shows that the orators, or any of them, have in any manner requested these defendants to take any different course from what they have taken in any of the respects complained of. They allege that it would do no good to make such request under the circumstances; but this is merely their judgment-the fact might be otherwise. They have a voice within the corporation, and they are not oppressed until they have exercised it and failed to produce correct results. The acts and omissions of the directors which are complained of are in their nature administrative, requiring the exercise of discretion and judgment; such as not bringing some suits and proceedings, and not defending others; not insisting upon the use of the corporate name in its business, and not proceeding to recover corporate property; incurring corporate liabilities, and giving corporate obligations. The orators are not proceeding at all upon any rights as creditors, neither is actual insolvency alleged; neither have they asked upon this motion to have suits restrained, or the incurring or giving obligations, or any particular disposition of property, prevented. They ask to have the administration of the affairs of the corporation taken by the court, and those defendants restrained from acting in the performance of the functions of their offices until new officers and management are instituted. This course would seem to be directly contrary to the decisions of the supreme court in Dimpjell v. Ohio <X M. Ry. Co. 110 U. S. 209; S. C. 3 Sup. Ct. Rep. 573; and Hawes v. Oakland, 104 U. S. 450. The stockholders seem to have no right on which to rest an application to the courts to take or control the management of the corporate affairs until their efforts within the corporation are overborne, and their interests are thereupon betrayed or jeopardized. All that is lacking here. These stockholders have merely observed what is going on, and, without trying to prevent it as stockholders, apply to the court for its control. They do not appear to be entitled to this relief in this summary manner. . . . The motion for a receiver, and an injunction against the directors and officers, is denied.
DEERING V. LADD.
Assignee, and another.'
December Term, 1884.)
(CMcuit CO'Urt, D. MinneBOta.
1. CHATTEL MORTGAGE LAW.
FRAUDULE:N'l'. PREFERENCE-MI!mlllSOTA IluoLVlIl1n'
On examination of the evidence, held, that it does not show mortgagee had reasonable cause to suppose that themortgagorw8s insolvent at the time the chattel mortgage sought to be foreclosed was given. 2. SAME-ELEVATOR Bun,!' ON HAILROAD LAND UNDER LICENSE-PERSONALTY. An elevator built on land owned by a railroad company, under a license aIlow'ingthe owner to operate it for the mutual benefit of himself and the company,and with a right to remove it, though the removal mIght injure the structure, is personal property, and a mortgage thereon a chattel mortgage.
In Equity. D. S. Grijfin and L. O. Spooner, for plaintiff. O. H. Benton, for defendant. NELSON, J., (orally.) This is a suit brought by the plaintiff to foreclose a chattel mortgage. Just previous to the foreclosure the mortgagor made an assignment under the insolvency law of this state. The assignee intervenes in this case, and has filed his answer opposing the suit of the plaintiff, who is the mortgagee. The question raised is that the mortgage was a preference contrary to the insolvency statute of the state of Minnesota, and that at the time it was given the mortgagor was insolvent, and the mortgagee had reasonable cause to believe that he was insolvent. Another question is presented by the pleadings: the claim is made by the intervenor that the property is real, and not personal. 'l'he property embraced in the mortgage is an elevator built on the land by permission of the Hastings & Dakota Railroad Company. That permission is a license; there is no .written contract, and all the testimony with regard to it is oral. But it is very clear, from the evidence of the aaent and of the superintendent of the railroad company and of the mortgagor, that the latter had a license to go upon the property of the company and build the elevator. He did so, and operated it in connection with the railroad company as a benefit both to himself and to it. I have examined the evidence in the case, and think there is nothing to show that the mortgagee had reasonable cause to suppose that the mortgagor was insolvent at the time the mortgage was given. The mortgagee resided in Chicago, and the mortgagor in this state, and it is true that he sent an agent to look after his claim, which was a promissory note, and in the conversation with the mortgagor there is, perhaps, something that might lead the agent to suspect that the mortgagor was not in a solvent condition, or might not be solvent within the strict view of the insolvent law, and that he was not able to pay his paper on its maturity. At that time the mortgagor said
Reported by Robertson Howard, Esq., of the St. Paul bar.