19 Fla. 472 | Fla. | 1882
delivered the opinion of the court:
In this case an injunction granted in the Circuit Court upon bill and exhibits was subsequently dissolved, and from this order, and an order refusing to reinstate the injunction, Brown appeals to this court. There was a demurrer to the bill by the company, which being overruled
We first discuss the case as to the stock. As to the stock, the plaintiff sets up in his bill, original and as amended, and in exhibits a part of the bill, that the plaintiff, Brown, FT. R. Gruelle, B. F. Matthias, H. C. Howard, G. B. Phinney, James Hunter, George H. Packwood and Thomas C. Lanier, on the 10th of May, A. I). 1876, signed articles of association as incorporators of the Gainesville,-Ocala and Charlotte Harbor Railroad Company ; that the name of the company was subsequently changed to the Florida Southern Railway Company, and that the capital stock of the company was fixed at $3,250,000 ; that the above-named parties subscribed for shares “ one thousand dollars ” each, and were declared Directors. On the 6th of May, 1879, we find from an exhibit showing a meeting of the Directors that Brown, Phinney, Whitney, Matthias and Gruelle were five of them, and that Brown was Vice-President of' the Company.
Plaintiff alleges that in May, 1879, “ stock was voted by the corporation five hundred shares each to the following corporators: H. C. Howard,G. B. Phinney,B.-F. Matthias, H. C. Whitney, FT. R. Gruelle and J.. B. Brown, each 500 shares now valued at $50,000 that in December, A. D. 1879, the company and himself agreed to give ten parties of Boston, Massachusetts, viz: Charles Francis, A. H.
Plaintiff alleges that he never consented to “ this distribution of stock ” to these four parties ; that this distribution was made at a meeting of the ten Boston parties and Whitney; that he was represented at that meeting by Charles Eraneis, who was authorized to act for him in the distribution of stock with special instructions that plaintiff would not agree to any arrangements made with Boardman, Taylor and Candler, and that the said Eraneis was only to represent him in the fair and just distribution of the stock of the said corporation among those entitled to receive stock, and affirms that by virtue of his relation as an original incorporator he was entitled to $113,000 worth of stock (in addition to the $50,000 he had already received), which is one-twelfth of the amount left of the two million eight hundred and fifty-six thousand dollars’ worth of unappropriated stock after deducting the one million five hundred thousand dollars awarded to the ten parties in Boston.
Plaintiff alleges that all of the incorporators were not pi’esent at this meeting, personally or by proxy. Plaintiff, in his amendment to the original bill, alleges that, in the latter part of the year 1879, H. C. Whitney made a contract of sale of all of the franchises of the Gainesville, Ocala and Charlotte Harbor Bailroad Company to C. A. Boardman, Isaac Taylor and himself, and that they afterwards admitted W. L. Candler, each of the parties paying therefor the sum of one thousand dollars; that this was done without the knowledge of plaintiff', and that in 1880, when he became aware of it, he notified Francis and Boardman that Whitney had no right to make any such disposition of the franchises of the company ; that notwithstanding such notice, after obtaining the power of attorney to distribute stock, the said parties endeavored to enforce said fraudulent sale, and they continued to recognize and enforce the same to the injury of the plaintiff and the other incorporators. Plaintiff alleges that prior to the holding of the meeting of August, 1880, said Whitney sent to him a power of attorney to sign, which was as follows: “ Know all men by these
Upon these facts and the acts of the parties in distributing the stock the plaintiff charges fraud and combination against him. Plaintiff alleges that he appointed Francis to act for him at said meeting at the instance and request of Boardman, who represented that Francis was a very correct man and would protect plaintiff’s interest, and that he empowered said Francis by power of attorney to act for him “ only in the division of stock.” Upon these facts
Then follows a charge that all the other parties present at the meeting participated in the fraud of these parties with full knowledge that said Francis was empowered and authorized only to “ allot ” the unappropriated stock fairly and justly among those entitled thereto. Plaintiff in his amended bill prays that- Boardman, Taylor, Candler and Whitney be made parties defendant, and that they may be enjoined from encumbering or disposing of the stock held or claimed to be held by them. In his original bill he prayed that the officers of the company and the company be enjoined from allowing any transfer of the stock of the company or of the individual members thereof; that the company be decreed to convey to plaintiff absolutely and unconditionally, and free from all encumbrances, $113,000 worth of stock.
Reading this bill carefully it will be perceived that the appellant, Brown, bases his whole claim to the relief he asks upon the ground that at the meeting of the company in 1880, at which he had a representative, the acts of the company and its officers then present were in violation of his rights as an original incorporator. These acts all culminated in what he calls distribution of stock. The charter fixes his right as an incorporator, prescribes the method of the organization of the company, and regulates the matter of the capital stock both as to its amount and as to sub
The language “ the persons who have so subscribed such articles of association and all persons who shall become stockholders in such company ” shows that others in addition to those signing the articles and agreeing in the articles to take stock may become stockholders, and the law provides how they may become stockholders. The statute provides that when the articles, affidavits, &c., are filed and recorded in the office of the Secretary of State, “the Directors may, in case the whole of the stock is not before subscribed, open books of subscription to fill up the capital stock of the company in such places, and after giving such notice as they may deem expedient, and may from time to time receive subscriptions until the whole capital stock is subscribed.” It is thus seen that after the organization of the corporation the matter of subscriptions to stock is under the control of the Directors in the respects indicated, that as to this matter the right of an incorporator is merged into that of a stockholder, .and that a stockholder has no authority to control the matter of subscriptions to stock as against the company, but that the Directors “ may receive subscriptions ” therefor. At the meeting of the Directors
The plaintiff makes no case of an application by him to the company to subscribe for stock, and for that reason, even if it was the duty of the company to receive such application and to grant it, he has not placed himself in a position where he can ask the aid of a court of equity to direct the company or its Directors to issue stock to him. Eor all that appears in this bill he may not be willing to enter into a contract to pay installments upon the call of the Directors which is involved in a stock subscription.
As to the stock claimed to be held by Whitney, Board-man, Taylor and Candler. There are no facts alleged here which negative the view that the Directors at the meeting in Boston, at which plaintiff had an agent, did not receive subscriptions for stock to the amount of $339,000 from each of them, and if this be the fact we know of no cause of action which the plaintiff has against the company for such act. The plaintiff made no application for stock, and the Directors, so far as thq facts are stated in this bill, exercised a power plainly granted to them by the law which defined their powers and duties. The complaint is that these parties received stock “ without paying any consideration therefor, or doing any act that was of any benefit to said corporation.” Under the charter and under the general law of corporations it is not necessary that the payment of any money or the doing of any act beneficial to the corporation shall precede a subscription to stock. We have al
As to the allegation in the amended bill that in the latter part of the year 1879 Whitney made a sale of all the franchises of the G-ainesville, Ocala and Charlotte Harbor Railroad Company there is nothing to show that the company recognized such sale, or that it even knew anything of the matter; on the contrary, plaintiff in his bill admits the fact that the company has constructed a portion of its road and is in the active exercise of the franchise to be a corporation and to operate the road as a common carrier, and one of the grounds of complaint is that the company is about to receive a grant of land from the State.
Our conclusion, so far as the matter of the stock of the company is concerned, is that there is no equity in the bill, and that the plaintiff shows no right, as against the company, to any more than five hundred shares of stock; and as to that, he is under obligation to pay calls when made by the Directors.
As to the land—
The allegation as to the stock he holds and his relation as an original signer of the articles of association, need not here be repeated. They go, however, as a matter of course, to make up the case as to land.
Plaintiff alleges that on the 4th of March, A. D. 1879, an act was passed by the Senate and Assembly of the State of Elorida granting to the corporation the alternate sections of land on each side of the proposed line of road ‘< and ten thousand acres per mile in addition, and that it was provided in said act that said corporation should not be entitled to any of
The company under its charter is authorized to make contracts, and if they see proper to make this land the basis of credit by executing a mortgage upon it, the company has such right. The grant here made is to the company, and it has authority to receive the land. Brown as an incorporator is not entitled to the proportion of the lands claimed. The grant is to the company, not to him.
A grant of land to a corporation with power to make contracts in reference thereto for the purpose of accomplishing corporate purposes is not a grant to the original corporators in the proportion in which they have subscribed for stock in the company organized. The title vests in the company for the purpose of accomplishing the end and object of its creation, and not in the individual stockholder in the proportion that his shares bear to the whole stock for his private benefit and disposal.
To the extent that the corporation here would be enjoined from receiving this land as a means of promoting the construction of the railway and controlling it in its stock interests, to that extent would it be equivalent to a judgment of forfeiture of its rights upon a quo warranto.
So far as the land grant is concerned we, therefore, see that there is no equity in the bill.
In the case of the appeal in Brown vs. The Florida Southern Railway Company and others, the orders of the Circuit Court appealed from are affirmed.
In the ease of the appeal of The Florida Southern Rail
At the January Term, 1882, at which the above case was submitted, a motion was also made by Brown for the appointment of a receiver to take charge of the railroad and other properties of the company during the pending of the suit.
Mr. Justice Westcott delivered the opinion of the court thereon as follows :
In this case the court having determined that there was no equity in the bill, as a matter of course it cannot be made the foundation of a motion for receiver and injunction.
The motion is denied.