CLEVELAND CITY FORGE IRON CO. V. TAYLOR BROS. IRON-WORKS CO.
CLEVELAND CITY FORGE mON CO. et at. rwORKS CO. et at. (Circuit Court, E. D. Louisiana.
TAYLOR BROS. moNo
February 22, 1893.)
CORPORATlONS-DISSOLUTION-NoTICE-RIGRTS Oll' CREDITORS-ATTACHMBNT.
Where the charter of a corporation provides that notice of a meeting to alter or amend the charter shall be advertised for a stated time, the di&solution of such corporation by its stockholders before the expiration 01. its charter period is as to existing creditors an alteration of an important character, which cannot be effected at a meeting held without such notice, so as to prevent them from levying an attachment. 54 Fed. Rep. 82, tollowed.
SAME-INJUNCTION AGAINST DISSOLUTION.
Creditors with attachments against a corporation cannot enjoin. the stockholders thereot from dissolving the corporation, In the absence ot fraud or of damage other than that caused by previous gross IuiBll1allage)llent, and that which will result trom the dissolution. l<'isk v. Railrood Co., 10 Blatchf. 518, distinguished.
In Equity. Bill by the Cleveland City Forge Iron Company,· the Prentiss Tool & Supply Company, and the Niles Tool Works, attach· ing creditors, against the Taylor Bros. Iron-Works Company, Limited, to enjoin the dissolution of defendant. Injunction denied. Motions made in the attachment suits to dissolve the attachments were heretofore denied. See 54 Fed. Rep. 82, where additional facts are -stated. W. S. Parkerson and Denegre, Bayne & Denegre, for complainants. Thomas J. Semmes. for defendants. BILLINGS, District Judge. This cause is submitted on an appli· cation for an injunction pendente lite. The defendanbl are a corporation, limited, organized under the laws of Louisiana, and the stock· holders therein. The complainants are plaintiffs in this court, who have commenced suit, two by attachment, and the other by sequestration. The chief object of the injunction sought is to restrain the stockholders from dissolving the corporation. Two points are involved in this application, and must be considered: First, has the corporation been already dissolved? and, second, if not, does the bill make a case for an injunction? 1. As to the claimed dissolution. In the suits at law a suggestion of the dissolution was made. An agreement was made to waive a trial by jury, and the court found against the dissolution. It has been insisted in the argument of this application that the proposition of law upon which the court founded its decision, viz. that the stockholders could not waive the clause in the charter of the corporation requiring the advertisement in the papers of the meeting called to dissolve the corporation, was erroneous. The whole matter turns upon whether the creditors had an interest in >receiving such a notice. For the reasons I gave in the law cases, ,my opinion, notwithstanding the second argument, is unchanged.. It seems to me they had interests to protect which gave them the
rl,-ght to upo.n the clause re,quiring the and that WitKout It; as RJ:talnst them, there'ceuld be no ·dissliltition. ' , A point not presented to the tolirt at the former argument has been made .now. viz. that the notice ot10 daYlil, required by the charter, is simply for altering or amending the charter, and that dissolution, not being specifically mentioned, does not require the notice. As it seems to me, with reference to a corporation, .the charter ofwhiebprovides that the corporation shall:have· and enjoy succession:'in.i.Wco.rporate naDle for. the period of 99 years,its dissolution before;W:at t4ne. at lellstso far as existing qreditors are concerned, is an alteration of its .charter, and that of an. important character. The statute gives aright· ·to a proper majority of the stockholders to change the charter as to the term of continuance of the corporation Previous dissolution; the manner in which all changes, includi1,l.g this. are to be effected, is fixed by the charter. Treating this argument as. in 8ublltance,upon this question, one for a new trial,with my convictions at first and now' as to the meaning and effect of the charter. I must refuse it. . 2. ,bill make a case. for injunQtion if the corporation exists? .'J!h,e substance of the bill is that the complainants are creditors wifli'attachinent; that the defendants have made an attempt to disf¥)lvet;b.e corporation, and, ,unless prevented by injunction, will dissolYe" . :to,,;the irreparable. inju,ry of the complainants... There ill no fraud' or' damage, .save, by' previous gross mismanagement, and 'what will be accomplished by dissolution.' Unless the institution of an attachment suit gives a creditor the right to thus interfere to prevent a dissolution of an indebted corporation, he has none; for the authorities seem Mbe to the effect that a mere creditor has no right to prevent. The solicitors for the complainant relied npon the case of Fisk v. Railroad 00., 10 Blatahf. 518. A careful 'stUdy of that case leads'n:le to tHe cQnclusion that it is distinguishable upon' principle from this. There the party obtaining the injnnction had already instituted a suit in equity, averring waste of the assets of the corporation, for the purpose of winding up the entire business of the corporation and distributing 'all its effects. The attempt to dissolve was, therefore, a defiance of the entire purpose of the jurisdiction with which the circuit court was I!leised. Here there is simply a suit at law with an attachment, the force of which, as carryinJ:t any privilege, is dependent upon a judgment. It is a proceeding of individual creditors to secure and collect individual debts. The dissolution ,would defeat the creditors' object, but is in nco sense a defiance ot the court's jurisdiction; and, as it seems to me, after thoroughly considering the Case of Fisk, the protection of a previously acquired jurisdiction ofa ,particular subject-matter, viz. the winding up 'Of the affairs of a corporation, and the distribution of its assets from being supplanted, was the ground of the inju.nction there. which here is wanting. While in each case tlle object of the suit is defeated, and the dissolution is the medium of usheritig in a final administration of the corporation's estate, in the Fisk '(}al!le that administration was the sole object of the suit, and was; so to speak, circumvented by: the dissolution and conse-
BA.RNES V. UNION PA.C. RY. 00.
quent administration. The pending suit has a difterent object,-the collection of a debt,--and is only incidentally interrupted by a suit which, like bankruptcy or insolvency proceedings, absorbs, rather than circumvents,the object of the original suit. The Fisk Oase is the only case which has been cited, or which I can find, which seems to sustain the injunction. I think that case inapplicable, and that, upon the doctrines of law, independent of that case, the creditors, who are complainants, upon the ground set forth in the bill, have no more right after an attachment suit has been com· menced than they had before to enjoin a dissolution. The attaching creditors, by a dissolution of a defendant corporation, may lose all priority over the other creditors, but their right in equity to en· force their claim to their ratable portion to the corporation's assets by suitable proceedings, which is all that a court of equity can recognize with reference to a dissolution of the defendant corporation, would be lett to them. 'The injunction is therefore refused.
BARNESv. UNION PAO. BY. 00. (Circuit Oourt of Appeals, Eighth Circuit.
January 27, 1893.)
,In ll,n action to recover damages for a faIse representation as to the ownersWp of land, whereby the vendee, having no knowledge of the title, was induced to .purchase, the complaint need not allege tbat, at the time of making such statement, defendant knew it was not owner, nor that the representation was fraudulently made to Induce the purchase. SAME. . An action for damages for false representations tis to title, made in a sale of lands, may be maintained, although the deed contained no covenants.
WRIT OF ERROR-REVIEW-DEMURRER.
DECErr-JrALSE RBPRESENTATIONS IN SALE OPO LANDS-WHEN AC'l'ION TAINABLE.
On writ of error from a judgment SIlStain1ng a demurrer to an amended complaint, suggestions made by the defendant in error, based upon the answer to the original complaint, cannot be considered.
LUUTATION OF ACTIONS-PLEADING-DEMURRER.
Under the Colorado Code and practice, a general demurrer on the ground that the complaint falls to state a cause of action does not raise the question of the effect of the statute of limitations.
In Error to the Oircuit Oourt of the United States for the District of Oolorado. At Law. Action by Thomas H. Barnes against the Union Pacific Railway Oompany to recover for false representations as to the ownersJPp of land purchased by plaintiff. Judgment sustaining demurrer to amended complaint. Plaintiff brings error. Reversed. Statement by SANBORN, Oircuit Judge:
'rhis writ of error was sued. out to reverse a judgment SIlStainlng a general demurrer to the plaintiff's amended complaint. In tWs complalnt the plaintiff thE' UnitE'd States of a railallegt·d: .That the defendant.was the road land grant. .. That about September, 1881, the defendant represented to him that a certain tract of land in Boulder county, Colo., was a part of its railroad·'.land grant, and that it was the sole owner tht'l'oot. That he trusted