Providence Mining, Manufacturing & Shipping Co. v. Towner's Adm'r

9 Ky. Op. 399, 1877 Ky. LEXIS 240

• Court: Court of Appeals of Kentucky
• Decided: March 30, 1877
• Status: Published

Opinion

Opinion by

Judge Lindsay :

The stock subscribed in the Providence Mining, Manufacturing and Shipping Company consisted in the beginning of nothing else than the mining rights and privileges in certain real estate, each acre subscribed entitling the subscriber to fifty dollars of stock.

A. Towner, deceased, subscribed one hundred acres, and was therefore entitled to stock to the amount of five thousand dollars. The court below adjudged that Towner was entitled to‘ no judgment against the company either for his services as president, or for the money alleged to have been paid out for its use and benefit, and from this judgment his administrator and heirs-at-law do not appeal. But the court, acting on the assumption that the rights of the stockholders could not be properly adjusted in any other way, confirmed the sale of all the mining privileges originally owned by the company, and reversed the case for the purpose of making distribution of the proceeds.

The record does not show that the company owes one cent; it does show that two of these plaintiffs held each ten thousand dollars of stock, and that $200,000 of stock was held by their auditor, A. Towner, at the time of his death; also that $20,000' had at one time been issued in the name of Lambert, and that one or two other persons had held a share or two of stock. There is some proof tending to show that $1,000 of stock was sold to some person living in Union county, but no claim is asserted on this account, and the name of the person seems to be unknown.

Lambert asserts no claim, and expressly states that he has no interest in the stock issued to him. The $200,000 of stock issued to the decedent, Towner, seems to have been a mere gratuity. He did not pay anything for it. We presume it was issued to enable him to carry out some of his visionary schemes of selling it in the market for the benefit of the company, and that the scheme failed, and hence the stock remained in his hands up to the time of his death. The plaintiffs paid nothing for the stock held by them, and as it was never sold by the company they can claim nothing out of its assets.

Neither Laughlin nor Petrel assert claim to the shares standing in their names, and nothing was paid to the company for them. The vague testimony tending to show a right in the Union county resident, who claims nothing for himself, is not sufficient to warrant the judgment of the court below, unless it is necessary and proper in view of other considerations.

The mining, manufacturing and shipping enterprise proved an utter and complete failure, and the legislature, in the exercise of a right, expressly reserved, repealed the charter of the company and provided that the mining rights and privileges subscribed by the various stockholders should revert to and invest in the owners of the various parcels of land. It may be this last provision is in excess of legislative power, or at least that it was the exercise of a doubtful power. This question we need not investigate. If it had been omitted from the repealing act it would under all the circumstances of the case have been the duty of a court of equity to have settled the rights of the various parties by a judgment to the same effect.

M. C. Givens, Waddell & Pratt, for appellant. H. T-. Petree, for appellee.

The corporation did not at any time become an active, breathing and living enterprise. It acquired no rights in addition to its stock subscriptions, and passed out of existence leaving no unpaid liabilities, and therefore equity demands that the various subscribers for stock shall as nearly as possible be placed in status quo.

The judgment of sale is reversed, and to avoid all doubts as to the validity of the legislative act, the chancellor will enter a judgment conforming to its provisions, and investing each stockholder, or his representative, with the rights and privileges he conveyed to the company.

The costs of the action in the lower court will be taxed jointly against all the parties in interest. Judgment reversed.