Stanton v. Missouri Pacific Railway Co.

2 N.Y.S. 298, 15 N.Y. Civ. Proc. R. 296, 1888 N.Y. Misc. LEXIS 145
CourtNew York Supreme Court
DecidedOctober 2, 1888
StatusPublished
Cited by3 cases

This text of 2 N.Y.S. 298 (Stanton v. Missouri Pacific Railway Co.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stanton v. Missouri Pacific Railway Co., 2 N.Y.S. 298, 15 N.Y. Civ. Proc. R. 296, 1888 N.Y. Misc. LEXIS 145 (N.Y. Super. Ct. 1888).

Opinion

O’Brien, J.

The defendants the Fort Scott, Wichita & Western Railway Company, (herein called for convenience the Fort Scott Company,) Russell Sage, Amos L. Hopkins, and Jay Gould join in the demurrer to the complaint in this action. The defendants John F. Dillon and Jay Gould, as trustees, and George J. Gould, individually, join in the demurrer to the complaint. These demurrers are substantially identical in form and language. The grounds of the demurrer are: First, that the causes of action have been improperly united in the complaint; second, that the complaint upon the face thereof; does not state facts sufficient to constitute a cause of action against the defendants demurring.

As to the first ground of "demurrer, that causes of action have been improperly joined, it is claimed that the complaint contains the following alleged causes of action, namely: (a) For the specific performance of a contract alleged to have been made by the Missouri Pacific Railway Company; (b) for damages from such railway company for breach of said contract; (c) the cancellation of a mortgage made by defendant the Fort Scott, Wichita & Western Railway Company to Gould and Dillon as trustees; (d) for removal Of all the officers and directors of the Fort Scott, Wichita & Western Railway Company, or for restraining them from acting as such officers and directors; (e) for damages from all of the directors of said Fort Scott, Wichita & Western Railway Company, for alleged mismanagement and misdirection of its affairs and revenues. If several causes of action, as enumerated, are set forth in one complaint, it would seemingly require little argument to demonstrate under our system of pleading that the demurrers should be sustained, as they are neither homogeneous, nor does each affect all the defendants. It is contended, however, that the complaint sets forth but a single cause of action, consisting of many elements, and based upon many transactions, all parts of a single scheme to injure the plaintiff; and .that the facts alleged showing the right to the several grounds of relief demanded are all part of the same transaction or transactions, connected with the same subject of action, and, taken together, amount only to a specific performance of the agreement sued upon. It is also suggested that, as the complaint contains but one count, it cannot be said to embrace several causes of action. The case of Goldberg v. Utley, 60 N. Y. 427, and Wiles v. Suydam, 64 N. Y. 173, are authorities for the position that “if [299]*299the complaint contains several causes of action, and they are improperly united, the omission to state the causes of action in separate counts, properly numbered, does not deprive the defendant of the right to demur. ”

To determine the different contentions presented, a reference to the complaint itself is necessary. This, in substance, shows that the plaintiff was a stockholder of the St. Louis, Fort Scott & Wichita Railway Company. The Missouri Pacific Railway Company was the holder of the first and second mortgage income bonds of that railroad company. The St. Louis, Fort Scott & Wichita Railroad Company (hereafter called for convenience the St. Louis Company) had defaulted on both of its mortgages, and a foreclosure suit upon both mortgages had proceeded to final decree. The plaintiff, with two others, constituting a committee of the stockholders of the St. Louis Railroad Company, entered into an agreement with the Missouri Pacific Company, whereby the latter undertook to purchase, or cause to be purchased, at foreclosure sale, the property of the St. Louis Company, and that a new company should be organized, which should issue an amount of first mortgage and income bonds corresponding to the like issues of the foreclosed company, and also capital stock corresponding in amount to the issue of the old company; the bonds of the new company to be delivered to the holders of the old bonds, and the stock of the new company to be delivered to the stockholders in the old company upon a contribution by them of $10 per share, and that stock of the new company remaining over by reason of the failure, etc., of the stockholders of the St. Louis Company to deposit their stock with the Mercantile Trust Company on or before July 1,1888, and pay the contribution of $10 per share whenever called upon by the trust company to do so, on 80 days’ advertisement, should be distributed ratably to those entitled to new stock. The foreclosure proceedings were carried to sale, and the property was bid in by the Union Trust Company, trustee of tile first mortgage. Subsequently, and in the month of July, the charter of the Fort Scott & Wichita Railroad Company (hereafter called for convenience the Fort Scott Company) was filed in the office of the secretary of state of the state of Kansas. Four out of seven of the incorporators signing the charter were directors of the Missouri Pacific Railroad Company. ¡None of the directors of the new company had deposited any stock with the Mercantile Trust Company under the agreement of May 10th. The Mercantile Trust Company never advertised for payment of the assessment, of $10 per share on St. Louis Company’s stock, (it is not alleged that the Trust Company was ever called upon to advertise.) The plaintiff has tendered $10 per share on his stock to the Union Trust Company, the Mercantile Trust Company, the Missouri Pacific Company, and the new Fort Scott Company, and has demanded the delivery to him of the stock of the Fort Scott Company, to which he alleges himself entitled under the agreement of May 10th, but these parties have omitted and refused to deliver such new stock to him. The new company issued its bonds, secured by a first mortgage, to the amount of $4,666,-UÜ0, and its second mortgage income obligation for $1,000,000, and 70,000 shares ($7,000,000) of its capital stock, to the Union Trust Company, in payment for the property of the old St. Louis Company, acquired by it in purchase from the Union Trust Company. The income bond for $1,000,000 was secured by an income and second mortgage to the defendants Dillon and Gould, as trustees. The stock issued to the Union Trust Company is alleged to be still in its possession. It is alleged that the directors of the Fort Scott Company, or those controlling the company, fraudulently and collusively managed its property in the interest of the Missouri Pacific Company, and so as to bring about, at an early date, the foreclosure of its two mortgages; and it is also alleged that the failure of the Missouri Pacific Company to carry out the agreement of May 10th has resulted in loss and damage to the plaintiff; and that the acts of the directors of the Fort Scott Company in pretending to organize it, and in the issue of its securities, have been fraudulent and collusive, and [300]*300have depreciated the stock of the new company;- and that the rights of the plaintiff, under his agreement of .May 10th with the Missouri Pacific Company, have been violated. Plaintiff asks judgment: First, that the defendants account for all the shares of the Fort Scott Company’s stock; second, that the capital stock of the Fort Scott Company be limited to the amount of the capital stock of the St. Louis Company; third, that the Union Trust Company be adjudged to be the trustee of the stock of the Fort Scott Company, held by it, for -the benefit of those who became parties to the agreement of May 10th, by depositing their stock in the St. Louis Company with the Mercantile Trust Company; fourth,

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Cite This Page — Counsel Stack

Bluebook (online)
2 N.Y.S. 298, 15 N.Y. Civ. Proc. R. 296, 1888 N.Y. Misc. LEXIS 145, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stanton-v-missouri-pacific-railway-co-nysupct-1888.