Trendley v. Illinois Traction Co.

| Mo. | Mar 1, 1912

YALLIANT, C. J.

— This is a snit in equity wherein the plaintiffs are the minority stockholders and the minority directors, and the individual defendants are the majority stockholders and the majority directors of the defendant corporation the Electric Railway Express Company; the other defendants are the East St. Louis and Suburban Railway Company and the Illinois Traction Company, both of which are Illinois corporations. The object of the suit is to cancel certain contracts whereby a previous contract between the East St. Louis & Suburban Railway Company ancl another corporation called the Electric Express Company, of date August 16, 1904, which contract had been duly assigned by the Electric Express Company to the defendant the; Electric Railway Express Company, was modified or changed in certain important particulars. The ground on which the plaintiffs seek to have the contracts of which they complain set aside is that they were the result of fraud and conspiracy on the part of the individual defendants assuming to represent the Express Company on the one hand, and the East St. Louis & Suburban Railway on the other.

The East St. Louis & Suburban Railway Company at the time referred to owned and operated certain lines of railroad which extended from East St. Louis east and southeast, over which lines cars were propelled by electricity. That railroad company, August 16, 1904, entered into a contract with a corporation called the Electric Express Company, whereby the latter company, in consideration of a certain per cent of its earnings to be paid to the railroad company, was granted the exclusive right to do an express business over the lines that that railroad company then owned or might thereafter acquire, and the railroad company was to furnish the Express Company cars for that business, and the Express Company was to furnish the railroad company an account of its earnings for each month on the 10th day of the month next following, and pay the rate per cent of its earnings agreed on to the railroad company on the 15th, and on failure to render the account and make the payment at the time specified the railroad company had the right to cancel the contract.

The petition alleges that the exclusive right to do an express business over the lines of the East St. Louis & Suburban Railroad Company (which we will hereinafter call the Suburban Company) was of great value and the chief asset of the Electric Railway Express Company which will hereinafter be called the Express Company). It is further alleged that the individual defendants as officers and directors of the Express Company “fraudulently and covinously” for their personal profit and to the injury of the Express Company, entered into “three pretended contracts” with the Suburban Company of dates respectfully July 18, August 10 and November 6, 1906, whereby the valuable right held by the Express Company under the contract of August 16, 1904, was attempted to be annulled.

At a special meeting of the board of directors of the Express Company, held July 31, 1906, defendant Allen presented to the board for its approval a paper then unsigned, dated July 16, 1906, in form of a proposed contract to be made between the Express Company and the Suburban Company, in which the Express Company was to agree, for the consideration therein expressed, to relinquish the exclusive feature of its contract of date August 16, 1904, and to authorize the Suburban Company to make a contract with the Illinois Traction Company allowing the latter to pass its cars carrying through-express freight over certain lines of the Suburban Company. A full board was composed of five directors, but one director had resigned; the remaining four were present at that meeting; three of those present voted to approve the contract and to authorize its officers to execute it on the part of the Express Company; one director voted no on the proposition. Two days after the adjournment of the meeting, August 2, 1906, one of the directors who had voted to approve the contract and authorize its execution, notified Mr. Allen, the president of the Express Company, that he had examined the contract carefully and was then of the opinion that it was not for the best interest of the Express Company and requested that it be not executed and he also notified the officers of the Suburban Railway Company not to execute the contract. The petition also states that this director at the same time notified Mr. Allen, president of the Express Company, that he, the director, had been deceived by Mr. Allen and misled by false statements made by him into voting for the contract at the meeting, but there is no specification as to what the statements'of Mr. Allen were that are alleged to be untrue, further than the general statement that he said it was for the best interest of the Express Company.

The contract of August 10,1906, above mentioned, was an agreement between the Suburban Company, represented by its vice-president, and the Express Company, by its president, agreeing to submit the draft of the proposed contract of July 16th to their respective attorneys,'to decide “whether it clearly expresses its intent,” and the attorneys were to draft a new form if the one presented was not- clear in its meaning, or. draft a supplement thereto, interpreting any clause of uncertain meaning. Then came the above mentioned contract of November 6, 1906, drawn by those attorneys, in which it is .recited' that there were some uncertainties or ambiguities in the language of the draft of July 16th, and these were interpreted and their meanings pnt at rest by that instrument. The two instruments, that of July 16th and November 6th, are but one contract, the latter explaining the first.

A charge is made in the'petition that the attorney intrusted with the matter of interpreting the draft of the contract of July 16th on the part of the Express Company was really an attorney for the Suburban Company, but that charge went no farther in specification than asserting that he was employed by the Suburban Company to represent it in certain other matters of litig-ation. There is no suggestion that the draft of the contract of November 6th is an unfair exposition of the meaning of that of July 16th.

The petition charges that on August 6, 1906, that is, six days after the special meeting of the directors of July 31, 1906, at which the contract in question was approved and authorized to be executed, there was a regular meeting of the board of directors held, at which a resolution was adopted disapproving that contract and forbidding the officers to execute it unless a majority of the stockholders at a duly called meeting should approve it. It is alleged that that meeting was composed of three directors who constituted a majority of the board, to-wit, the director who had voted against the proposition to approve the contract at the meeting of July 31, 1906, and the director who had voted in favor of it at the meeting but who afterwards notified Mr. Allen, the president, that he had changed his mind; the resolution of disapproval is alleged to have been adopted'by the vote of those two directors who constituted a majority of those present; the other director who is alleged to have been present, Mr. Allen, did not vote. The legality of that meeting is denied by the defendants; we will return to it herein later. The business of the Express Company was conducted under the new contract until the collapse of the company after this suit was instituted.

The Express Company failed to pay the Suburban Company on January 15, 1907, the amount due for cars furnished and the service rendered in the preceding month of December, as required by the original contract of August 16, 1904, and also in the new contract of July 18, 1906, and the Suburban Company on January 16th notified the Express Company that the contracts existing between the two companies were, because of such failure, forfeited, and thereafter the Suburban Company refused to furnish cars to the Express Company and its business practically ceased. On January 19, 1907, on motion of the plaintiffs herein, the court appointed receivers to take possession .of the property and affairs of the Express Company and conduct its business and authorized them to borrow $5000 to be used in the conduct of the business and issue certificates therefor. The plaintiffs loaned that amount of money to the .receivers, taking receivers’ certificates therefor; the receivers were ordered by the court to pay the Suburban Company $1400; the amount due it for the month of December and for the non-payment of which the forfeiture had been declared. The receivers made the payment and the court ordered the Suburban Company to continue furnishing cars and service to the Express Company as required under the contract of August 16, 1904, until the further o.rder of the court. The business of the Express Company was conducted by the receivers until the final judgment in the cause, when they were discharged.

The petition states that defendant Allen was a stockholder in the Suburban Company and others of the defendants were also interested in that company, and were moved in their conduct in this matter by a desire to promote the interest of the Suburban Company at the expense of the Express Company.

The answers of all the defendants are in effect general denials, except that of the Suburban Company, which in addition to the general denial states, as by cross-bill, the failure of the Express Company to perform its part of the contract in the particular of paying fox the service rendered and that in consequence thereof the Suburban Company had declared the contract forfeited, having first given notice in writing to the Express Company on December 19th that it would do so unless the payment was made on January 15th in compliance with the contract. The cross-bill prayed that the court decree the contract forfeited.

To this the plaintiffs replied that the Suburban Company had no right to declare the forfeiture when it did so, because it had never demanded strict compliance with that part of the contract as to prompt payments, but the custom had been to let the payment be made within a reasonable time after the 15th of each month, and that custom had -been a practical waiver of the strict letter of the contract; the reply also stated that the alleged notice that payment would be required on January 15th was not given to the plaintiffs or the other stockholders, but to Mr, Allen, the president.

The finding of the court was in favor of the defendants on the charges of fraud made against them and on all the issues.' The decree was that the order of the court requiring the defendant the Suburban Company to furnish ears to the Express Company be dissolved, and that the plaintiff’s bill be dismissed. It was also ordered that the receivers should make a report to the court showing the amount of money in their hands, that out of such fund they pay the expenses of the receivership and apply the balance towards payment of the certificates issued by order of court, and turn over all the rest of the property, in their hands to the defendant the Electric Railway Express Company.

From that decree the plaintiffs have prosecuted this appeal.

. I. There was a great deal of evidence in the case; it covers about 700 printed pages. A very large part of it bears on the question of whether the contract of July 18,1906, was so unfavorable to the Express Company as to sustain the charges in the petition that it was the result of fraud on the part of the individual defendants who were entrusted as directors with the duty of protecting the interests of that company.. If the contract of July 18, 1906, which modified that of August 16, 1904, was made in good faith and by lawful authority it cannot be set aside by the court on a showing that it was unwise or that it gave the Suburban Company the advantage. Corporations like individuals sometimes make bad bargains, but the courts will not for that reason set their contracts aside. We do not mean to say or imply that this was a bad bargain for the Express Company, but we merely state the point of law.

On the part of the plaintiffs there was evidence tending to show that, depriving the Express Company of the exclusive feature of the contract of August 16', 1904, and authorizing the Suburban Company to make a contract with the Illinois Traction Company, allowing it to run express cars carrying through freight over the Suburban road from Edwardsville to East St. Louis, introduced a competitor in the business destructive of the rights of the Express Company. On the other hand the testimony on the part of the defendants tended to show that the Illinois Traction Company was a corporation owning a large system of already completed interurban electric railroads coming from Springfield, Illinois, towards St. Louis, and was then engaged in the construction of a line which when completed would reach from Edwardsville to East St. Louis, and that it had ample means to complete the line and when completed it could carry not only through but local express freight between those points. But the Traction Company wanted to cover the route along the contemplated line and enter' East St. Louis with through-express freight without building that line and to devote its energies to the construction of its line into the city of St. Louis over its own bridge north of East St. Louis, and this was its inducement to seek a passage for its through East St. Louis freight over the Suburban road. If the Traction Company had been forced to complete its own line into East St. Louis it could have carried hot only through-express freight, but local also from Edwards-ville to East St. Louis, and it would have been a more formidable competitor of the Express Company than it would be if the concession to carry only through freight over the Suburban road was made. And if the Traction Company should complete its line into East St. Louis it would become a rival of the Suburban Company in carrying passengers into East St. Louis.

Upon those grounds- it was said by witnesses for the defendants that it was to the interest of the three interested parties, the Express Company, the Suburban Company and the Traction Company, that the contract of July 18, 1906, should be made. The evidence for the defendants also tended to show that by this contract of July 18th the Express Company acquired the right to run express ears between East St. Louis and Alton, and East St. Louis and Edwards-ville. The Express Company claims that it had the right before the contract of July 18th was entered into, but the evidence shows that the claim was disputed and the Express Company had not been able to exercise it. There were other features of 'less importance in the contract of July 18th that, according to defendant’s testimony, were of advantage to the Express Company.

The testimony as to the conditions that confronted the Express Company was undisputed and it shows that the charge of fraud against the defendants was unfounded. There being no fraud in the conduct of the directors, if they acted within the scope of their lawful authority, their act was lawful.

Let us now see by what authority they acted in making this contract.

• a. It is contended that the board of directors had no authority to make a contract to modify the contract of August 16> 1904, but that it could only be done by the stockholders.

The proposition is that the exclusive feature of ■ the contract of August 16, 1904, constituted fully ninety per cent of the assets of the company and therefore represented ninety per cent of the capital stock, and when that feature is eliminated from the contract it reduces the capital stock of the corporation ninety per cent, and authorities are cited to show that a board of directors cannot increase or reduce the capital stock of a corporation. The proposition of law that a board of directors cannot increase or reduce the capital stock of the corporation is correct, but it is not applicable to the action of this board of directors in authorizing the making of the contract in question. This contract does not reduce the capital stock of this company, although it may affect the value of its shares, as any business contract may. It is also true that the “directors of a corporation cannot, unless thereto authorized by the shareholders, put an end to its business and defeat the objects of its creation by selling out en masse all its property and goodwill.” [10 Cyc. 764.] But this contract had no such purpose or effect; if the managers of the company had been left alone to carry on its business under the new contract there is nothing in the record to show but that it might have entered on a more successful business career with the extended field of operation afforded by the new contract than it had theretofore enjoyed. But when these plaintiffs instituted this suit (which was before the Suburban Company had declared the contract forfeited), with their charges of fraud, their prayers for injunction and for receivers, it was enough to destroy the credit of the company and to destroy that confidence in its management that had theretofore existed, and to induce the officers of the Suburban Company to declare the contract foiy feitecl and .decline to do any more business with the Express Company.

When the suit was filed one of the city newspapers, as the evidence shows, gave it a conspicuous notice, with head lines directing attention to the alleged fraudulent conspiracy of the officers of the Express Company with the officers of the Suburban Company. A publication of that kind is likely to arouse resentment on the part of the men whose integrity is assailed. In his letter to the president of the Express Company, who had written a conciliatory letter to him, the vice-president of the Suburban Company, giving as one of the reasons for insisting on prompt payment of the amount due, made reference to the “recent receivership proceedings and other public statements affecting the credit of your company.”

Of course the company might.have gone to the wall when trying to do business under the new contract even if there had been no suit, no one knows what might have been, but the fact is, as plaintiffs themselves say, that up to that time the Suburban Company had not insisted on prompt payment for the service rendered, but had indulged the Express Company reasonable time in which to make its payments after the same became due according to the contract, but within four days after the institution of this suit the Suburban Company served notice on the Express Company that thereafter prompt payment would be required, and unless made on the 15th of January, 1907, the contract would be declared forfeited, as the contract itself authorized; on January 16th the Suburban Company did declare the contract forfeited and refused to furnish cars to the Express Company; then the receivers were appointed.

Whilst it is *the law that the directors of a corporation have no authority to put an end to- its life, yet if this corporation came to its death in consequence of the action of the Suburban Company in declaring the contract forfeited and refusing to furnish cars to carry on the business of the Express Company, who is to blame?

“The directors are merely the managers of the property and business of the corporation, and cannot therefore perform constituent acts, by which expression is meant acts which involve fundamental changes in the constitution of the corporation. ” [10 Cyc., p. 762.] But they are the managers of its business, and have authority to make contracts binding the corporation in the conduct of its business, and the contracts they make cannot be set aside at the suit of stockholders on the ground that they do not promote the best interest of the corporation.

We hold that the contract of July 18, 1906 (which includes also the construing contract of November 6, 1906), was within the legitimate scope of the powers of the board of directors in this case.

b. The meeting of the directors July 31, 1906, at which the contract in question was approved and the officers were authorized to execute it, was a special meeting and the objection which the plaintiffs fake to its action is on the ground that the notice of the meeting did not specify the purpose of the call; but that is a mistake. The notice was: “ This is to notify you that there will be a special meeting of the board of directors of the Electric Railway Express Company at this office at ten o’clock a. m. on Tuesday, July 31, 1906, for the purpose of then and there authorizing the president of this -company to sign and enter into a certain contract with the East St. Louis and Suburban Railway Company bearing date July 16, 1906. And for the further purpose of electing a director to fill the vacancy caused by the resignation of Martin J. Baker.” At that date the draft of -the contract submitted to the board bore the date July 16th, but it was redrafted before signing and dated' July 18th. There was no material difference in the two drafts, in so far as concerns -the plaintiffs’ complaint. All the directors, four in number, attended that meeting and no objection was made to the notice; the contract was discussed and all of them voted on it. It is the same contract as that referred to throughout the record as the contract of July 18, 1906. The director who voted against making the contract vigorously opposed its adoption. “Clause by clause [he testified] I took up the contract and offered objections to it. Mr. Allen undertook to answer the objections which I raised.” The objector then requested that the matter be laid over and he be given further time to examine it, but that was refused, because they said the manager of the Suburban Company was going away for the summer and action must be taken then. The proposition was put to a vote and carried three yeas and one no. We discover no illegality in thé proceeding’s of that meeting. ■

c. The plaintiffs claim that there was a meeting of the board of directors' on August 6, 1906, at which it was resolved that the contract bearing date July 16, 1906, which was presented “at a special meeting of the board of directors July 31, 1906, be disapproved, and the officers of this company be and are hereby forbidden to execute and deliver said contract unless the majority of the stockholders at a duly called meeting shall approve the same.”

By the laws of the company it is provided: “Regular meetings of the board of directors shall be held at the office of the company on the first Monday of every month at ten o ’clock a. m. ’ ’ On August 6, 1906, which was the first Monday in that month, at ten o’clock a. m., two directors came to the office of Mr. Allen, which was the office of the company. Those two directors were the director who had opposed the execution of the contract at the special meeting July 31, and the director who had voted in favor of its execution but who two days thereafter notified the president of the Express Company and also the vice-president of the Suburban Company that he had been deceived into voting for it and was then opposed to the contract. Mr. Allen being in the office when they came in, there were three directors present. The two brought the resolution already written with them to the office. According to the testimony of the director who had voted no at the meeting July 31st, when the two entered the office he told Mr. Allen that they had come to hold a directors’ meeting; that Mr. Allen said: “I recognize a quorum is present and I will have to put any motion you make; ’ ’ but when the motion to disapprove the contract was made, Mr. Allen charged them with sharp practice -and with trying to take advantage of him in the absence of the other director; “he started to leave the office, but did not get away until the motion was put and passed; that is, he did not get out of the room, he tried to.” The secretary of the company being absent this director acted as secretary. The board had not been holding-regular meetings on the day mentioned in the by-laws; it held a regular meeting in October, 1905, and one in February, 1906, not since.

The other one of these two directors was also a witness for plaintiffs on this point. He testified that he went there at the request of his companion, “Well, he said we would go down and pass these two motions. Q. He said if you went down Mr. Allen would be the only other director there and you could carry anything you wanted, didn’t he? A. He didn’t say that, but I guess he meant that. Q. And you knew that when you went down there neither Dr. Starkel nor Mr. Weingaertner would be there? A. I knew it, yes, sir. Q. You knew that when you went in there and began negotiations, tried to have a meeting, that it was a fake meeting, didn’t you? A. I don’t know whether you would call it a fake meeting. Q. Well, I.am not' asking you what I would call it, but you knew that it was a fake meeting, didn’t you? A. I am not familiar enough to know what a fake meeting is. I knew it was not a regular meeting that we had there. Q. You knew that it was not a bona fide meeting? A. I don’t know how to answer that either. Q. Do you know what that word means? You knew the meeting was not a fair one to all the directors. A. Yes, sir. Q. You knew that Mr. Weingaertner and Dr. Starkel, if they were present, would not vote with you and Mr. Young? A. Yes, sir. Q. You made no effort to apprise them in any way that you were going to take this exceptional course and try to have a meeting on that day, did you? A. No.” That director testified that soon after that meeting he resigned. “Q. Why did you resign? A. Why, I got thoroughly disgusted with the wrangle.”

Mr. Allen’s testimony was to the effect that when these two gentlemen came to his office he did not understand that they came to hold a directors ’ meeting, they talked in a conversational way about the contract, then one of them made a motion and the other seconded it; then Mr. Allen understood for the first time that they were trying to hold a meeting, he went to the telephone and communicated with his attorney and after getting his advice left the room. He denied that he said that he recognized that there was a quorum present, and would have to put any motion they made.

There is no legál process by which a director of a private business corporation can be forced to attend a meeting, and he cannot lawfully be compelled by physical force to attend, nor can he be trapped into an attendance against his will. It happened to be the fact that Mr. Allen’s office was the office of the company and he was there for his daily work, not expecting a meeting of the board. These gentlemen knew that they would find him there, knew the other directors would not be there and they planned to force a meeting at which they would constitute a majority. We hold that that was not a lawful meeting of the board of directors.

d. At a special meeting of the board on November 8, 1906, the minutes of the meeting of July 31st, approving the contract' in question, were adopted.

At a meeting held November 27th the director who had voted no at the meeting of July 31st, offered a resolution to the effect that the company employ counsel to bring suit to set aside the contract of July 18th; and the contracts of subsequent dates, on the ground that they were entered into without authority and were void. The resolution was lost by a vote of three-to two, the two being the two who attempted to hold a meeting on August 6th. Then the same director offered a resolution of like effect with the addition that the officers of the company had fraudulently conspired with the Suburban Company and others to enter into the contracts in violation of the rights of the stockholders of the company. Another director then moved to adjourn, stating as a reason therefor that he declined to sit in a meeting with a member who would offer such an insulting resolution; the motion was carried by a vote of three to two.

On December 15, 1906, a stockholders’ meeting was held, at which a resolution was offered ratifying and approving the action of the officers in executing the contract of July 18th and November 6, 1906. Thereupon canvassers were appointed to collect the votes of the stockholders on the resolution and report at the regular annual meeting of the stockholders January 8, 1907. At that regular meeting the canvassers appointed reported, showing that there were 600 shares voted in favor of the resolution and 320 against it, and thereupon it was announced that the resolution was adopted and it was so entered on the record.

At the stockholders’ meeting January 8, 1907, Mr. Allen stated that the Suburban Company had given notice that unless the car rental was paid on the 15th the contract would be declared cancelled, and he urged that action be taken to raise the money. After a full discussion the matter was referred to a meeting of the board of directors to be held on the 15th inst. That meeting was held and various ways and means were discussed, but the money was not raised. Mr. Allen offered to indorse the note of the company for the amount required, provided the director who had opposed the execution of the contract of July 18th would join him in the indorsement, but that director refused to do so, saying that plenty of money could be raised if the contract of July 18 and November 6, 1906, were cancelled, and the old contract of August 16', 1904, restored.

The evidence amply sustains the chancellor’s findings of the facts and justifies the decree discharging the receivers and dismissing the plaintiff’s bill.

II. By the decree in this case the contracts between the Express Company and the Suburban Company, under which the latter was to furnish to the former express cars to be carried over its road, are declared to be “canceled, forfeited and of no effect.” On this the appellants make the point that a court of equity has not jurisdiction to declare a forfeiture. It is true the question of forfeiture is one to be dealt with by courts of law. A court of equity never interferes with the subject unless to prevent a forfeiture when conditions are such as to render it inequitable to allow it to be enforced. But that clause may be stricken out of this decree without changing its effect. The fact is, that part of the answer of the Suburban Company which undertakes to set np as if by cross-bill the facts justifying the action of that company in declaring the forfeiture, and praying the court to decree the contracts forfeited, was unnecessary and bad pleading. The plaintiff’s petition stated that the Suburban Company had declared the contract forfeited and had refused to further perform its part, and then the petition went on to make statements showing why it would be inequitable to permit the forfeiture, and prayed that it be annulled and that the Suburban Company be required to continue its service. The general denial of the Suburban Company put in issue those statements and the court found that the evidence did not sustain the plaintiff’s statements and dismissed their bill. That disposed of the question of the forfeiture as completely as if there had been no cross-bill or as if it had been ignored. The forfeiture having been declared by the defendant company, the plaintiffs having prayed the court to set it aside, and the court having refused in its final decree to do so left the forfeiture standing and that- was the end of the subject. The plaintiffs were not prejudiced by the decree declaring the contracts forfeited, although the decree would have been in better form if that clause had been omitted.

III. On June 17,1907, the court rendered the final decree, finding all the issues in favor of the defendants and dismissing the plaintiffs’ bill; in the decree was the following: “And it is further ordered that said receivers pay out of the funds in their hands such other expenses and obligations incurred by such receivers in the management and conduct of the business of said Electric Railway Express Company that are unpaid. And it is further ordered that any balance that may be in their hands shall be applied to the payment of the receivers ’ certificates heretofore issued by this court, pursuant to tbe order of <^ourt made on January 19, 1907, and that all other property shall be turned over to the defendant Electric Railway Express Company.” On June 20, 1907, plaintiffs filed a motion for a new trial, which was by the court overruled October 7, 1907, and plaintiffs excepted. Appellants in their brief now say that there was at that time outstanding certificates issued by the receivers to the amount of $4000, for money advanced them by plaintiffs, and that it was error in the court to order the property of the Express Company returned to it instead of having the property sold by the receivers and the proceeds applied to the payment of the certificates. They say in their brief that this property, which consisted in the main of horses and wagons, was, after it was returned to the Express Company, sold by the president of the company for $4200, and he should now be required to pay those certificates out of that fund.

"Without passing on the question of whether, under the facts of this case, the plaintiffs would have been entitled to have the personal property of the Express Company sold to reimburse them for the money they claim to have advanced, it is sufficient to say there is no such question now before us. In their motions for a new trial they did not assign that the court had erred in ordering the property turned back to the Express Company and there is no general assignment in the motion that covers, the point. The motion for new trial was filed June 20, 1907, overruled October 7, 1907, appeal prayed and granted November 12, 1907, but it was not until January 31, 1908, that the plaintiffs filed a motion in the court asking that the order discharging the receivers be set aside and that the Express Company and its president be ordered to turn over to the receivers the proceeds of the sale of the property; that was several months after the final judgment had been rendered and more than two 'months after this appeal had been taken. None of that matter is embraced in the bill of exceptions, and conld not have been, because it did not occur during the proceedings covered by the bill of exceptions; it is all printed(in the abstract, but is outside of the bill of exceptions. The bill of exceptions covers the proceedings at the October, 1907, term, this matter occurred at a subsequent term, and there is no bill of exceptions covering it; its insertion in the abstract is unauthorized.

A final decree determines the rights of the parties on all the points in issue; when there is a receiver in the case it is proper that in the final decree he should be directed to make disposition of funds and property in his hands and report subsequently what he has done in obedience to the decree. If his report filed at a subsequent term .shows that he has acted contrary to the decree parties have a right then to except to his action, but if he has acted in accordance with the decree the party deeming himself aggrieved can be heard in an appellate court only on appeal from the decree. In this case the final report of the receivers was made at a subsequent term, but that report is not in this bill.of exceptions, therefore we cannot take notice of it; there is no bill of exceptions covering that term, therefore we do not know what evidence if any was before the court; we do not know that there were at that time outstanding certificates or for what amount or who owned them; we have statements on those points in what purports to be the motion of plaintiffs filed at that subsequent term, but even that motion is not authenticated by a bill of exceptions, and is not a legitimate part of this record. Appellants in their brief say that when the motion was overruled they excepted, but the record does not so show.

If appellants should now take the position that there was no final decree until the order of the court approving the final report of the receivers and discharging them (which position would not be tenable) they would on that theory he out of court entirely, because this appeal is from the decree rendered June 17, 1907; if that is not a final decree then this appeal is premature.

We find no error in the record. The judgment is affirmed.