40 F. 861 | U.S. Circuit Court for the Northern District of Illnois | 1889
On August 5, 1886, James H. McVicker commenced his action in assumpsit against the American Opera Company for breach of its contract for the use of his theater. On September 8, 1886, at a meeting of the directors of the American Opera Company, the question of forming a National Opera Company was discussed, and the following preamble and resolutions wereUnanimously adopted:
“Whereas, for the purpose of promoting a higher musical education in the United States, it is desirable that tlie principal cities should co-operate upon a uniform and equitable plan for establishing' a national opera, Resolved that a National Opera Company be formed, in which each city having a local American Opera Company shall be represented by directors in proportion to its capital, and have proportionate ownership and voice in its direction; Resolved that the present American Opera Company, Limited, will co-operate in this movement by appropriate reorganization, transferring its property to tlie National Company: and Resolved that a local company be formed for New York city on the same basis in the National Company as tlie local American Opera Companies in all the other cities. ”
In pursuance of these resolutions, the National Opera Company was organized, under the laws of New .Jersey, with a capital stock of 8500,-000, and a certificate of organization was filed in the office of the secretary of state on November 26, 1886. At a meeting of stockholders of the American Company on November 29, 1886, two contracts, which liad been approved at a meeting of the directors on the 22d, were submitted. One of these contracts provided for a loase of the entire properly of tlie American Company to the National Company for- one year for 825,000, and the other provided i’or the sale of the same property to tlie National Company, at any time within one year, for §875,000, namely, the $25,000 already referred to as rental, and $350,000, to be paid, either in cash, or the stock of the National Company at its par value. On the last-named day, namely, November 29th, at a meeting of the directors of the National Company, a resolution was adopted approving of the proposed agreements, and authorizing and directing the executive committee to pay the §25,000 under the lease, and take possession of the property. The lease was accordingly executed by the olli-
The American Company was insolvent when the resolutions were adopted on September 7th, and the evidence show's that it remained so until March following, when, in a suit brought against it in New York, a receiver was appointed. It transacted no business after the National Company was organized, which also became insolvent, and in a suit commenced against it in New York in the fall of 1887 a receiver was appointed. Instead of holding its assets as a fund for the payment of creditors, it being insolvent, the American Company caused the National Company to be organized for the purpose of transferring to it all of the former’s property. Indeed, the resolutions adopted on September 7th contemplated a reorganization of the American Company under another name, without essential change in object or purpose, which was done, and the business proceeded just as before.
The language of the resolutions adopted on September 7th leaves no room for doubt as to what was contemplated by the directors of the American Company. By the second resolution it was declared that the company “will co-operate in the movement by appropriate reorganization, and transfer of its property to the National Opera Company;” and by the third resolution it was declared “that a local company be formed for New York city, to be on the same basis in the National Company as the local opera companies in all the other cities.” The new company, when organized, was expected to take the place of the insolvent American Company, and succeed to all of its rights, and the latter become defunct. If it was contemplated that the American Company should con