270 F. 465 | 2d Cir. | 1920
Lead Opinion
Amos F. Eno in his lifetime filed this bill' in equity, as the owner of 900 shares of the preferred stock of the Des Moines & Ft. Dodge Railroad Company, and sought to enjoin the proposed transfer of the railroad and property of that company to the Minneapolis & St. Louis Railroad Company, and to require the pajunent to the complainant of moneys which he claimed to be entitled to receive as dividends on his stock from the surplus income of that company for the years 1909, 1910, 1911, 1912, 1913, and 1914. During the pendency of the suit he died, and his temporary administrators continued the prosecution of the suit. Upon the trial appellants abandoned their claim to enjoin the transfer of the property of the Des Moines & Ft. Dodge Railroad Company to the Minneapolis & St. Louis Railroad Company. They continued, however, in their demand for relief as to the payment to them of moneys, as dividends, alleged to be surplus income of the company.
The Des Moines Company was incorporated on February 21, 1874. Its articles of incorporation were amended April 8, 1881. On February 19, 1915, there were outstanding 7,635 shares of preferred stock of the Des Moines Company amounting to a par value of $763,500, and 42,831 shares of common stock, amounting in par value to $4,283,100. The complainants’ intestate, at the time that injury is claimed to have been done, was the owner of 900 shares of preferred stock, 700 of which were purchases hi 1909, and 200 shares in 1911. The Minneapolis Company held 25,300 shares of the common stock from 1904, and continued thus holding the control of the Des Moines Company, with ability to nominate a board of directors of its choice. Five of the nine directors of the Des Moines Company were also five of the directors of the Minneapolis Company, and this was increased to seven in 1911 and reduced to six in 1913, 1914, and 1915. On January 1, 1905, a lease was made by the Des Moines Company of its railroad to the Minneapolis Company at a fixed rental to January 1, 1935. The rent provided for undey this lease was the net earnings received by the lessee from the use and operation of the property which remained after deducting from such earnings the entire cost of the net earnings, maintenance, repairs, and renewals of the line of railroad and the oth-
On March 31, 1914, the stockholders were notified thaf a meeting would be held on June 4th oí that year to consider the matter of the sale and conveyance by the Des Moines Company of its property to the Minneapolis Company, and the approval of the form of agreement of such sale and conveyance would be submitted at the meeting. The meeting was subsequently held and the sale was approved by the stockholders. At the meeting resolutions were there adopted approving the form of the agreement and authorizing the sale. Three-fourths of the shares of stock were represented, and the only protest of the sale recorded was that of the 900 shares owned by the appellants’ intestate. The sale ivas subsequently made. The statutes of tlie state of Iowa, under which laws the Des Moines Company was incorporated, and of the state of Minnesota, under the laws of which state the Minneapolis Company was organized, were complied with as to the sale and purchase of the property. Among other things, the agreement which was approved provided that the Des Moines Company release and discharge the Minneapolis Company “from the payment of any and all amounts which may then be due and owing from the Minneapolis Company to the Des Moines Company, not including, however, the obligations on the pari of the Minneapolis Company to be performed and observed by it as provided in this agreement.” The agreement provided for the sale of “all rights, powers, privileges, franchises, immunities, and other property used in connection therewith and appertaining thereto.” No effort had ever been made to collect the arrears of rentals which were still owing at the time the sale was consummated, and the sale was fully consummated before this suit was instituted.
Judgment below is affirmed.
Rehearing
On Petition for Rehearing.
Motion for rehearing denied.