« PreviousContinue »
assignment of cross-errors in such appeal, do not bring before the court stockholders not appealing or suing out a writ of error and to whom the particular portion of the decree appealed from does not apply.
17. PLEADING—when a petition to vacate decree does not show due diligence. A petition to vacate a decree against stockholders for stock liability, upon the grounds that the petitioner had been misled by statements of attorneys for certain creditors to the effect that a decree would not be asked against him, and that he had a good defense to the decree in the form of a discharge in bankruptcy, is open to demurrer, where, from aught that appears in the petition, petitioner's knowledge that a decree would be taken against him was acquired in ample time to have enabled him to make his defense before the decree was entered.
APPEAL from the Appellate Court for the First District;heard in that court on appeal from the Circuit Court of Cook county; the Hon. M. F. TULEY, Judge, presiding.
With this case have been consolidated in this court cases bearing titles and general numbers as follows, to-wit: No. 5339, Weaver v. Chicago Title and Trust Co., Receiver of Columbian Celebration Co. et al.; 5370, Weaver v. Same; 5383, Stuart v. Same; 5384, Bodman v. Same; 5385, Brewster v. Same; 5386, DeCamp v. Same; 5387, Hinkley et al. v. Same; 5388, Lobdell v. Same; 5389, Maxwell v. Same; 5390, Merchants' Loan and Trust Co. v. Same; 5391, Hately v. Same; 5392, Lyon v. Same; 5393, Butler v. Same; 5394, Cudahy v. Same; 5395, Hinkley v. Same; 5396, Halbert v. Same; 5397, Logan v. Same; 5398, Hinkley v. Same; 5399, Henry v. Same; 5400, Lee v. Same; 5401, McClurg v. Same; 5402, Porter v. Same; 5403, Peck v. Same; 5404, Peck v. Same; 5405, Steenberg v. Same; 5406, Thrall v. Same; 5407, Valentine v. Same; 5408, Deere v. Same; 5409, McNally v. Same; 5410, Knapp v. Same; 5411, Hynes v. Same; 5412, Sickel v. Same; 5413, Berriman v. Same; 5414, Gage v. Same; 5415, Phelps v. Same; 5416, Schmitt v. Same; 5417, Twitchell v. Same; 5418, Taylor v. Same; 5419, Barbour v. Same; 5420, Frees v. Same; 5421, American Trust and Savings Bank v. Same; 5422, Ware v. Same; 5423, Randall v. Same; 5424, Sickel v. Same; 5425, Nelson v. Same; 5430, Kirk v. Same.
On June 10, 1893, the Buda Foundry and Manufacturing Company, an Illinois corporation doing business in the city of Chicago, filed a bill in the circuit court of Cook county against the Columbian Celebration Company, a corporation, and a large number of its stockholders, under section 25 of chapter 32, Hurd's Revised Statutes, on behalf of itself and all other creditors of said company, for the appointment of a receiver, the dissolution of said corporation and the enforcement of stockholders' liability. Certain other creditors were later joined as co-complainants. To the bill as amended a large number of defendants interposed general demurrers, which, on June 25, 1894, were sustained by the court and the bill dismissed for want of equity. An appeal was taken by the complainant to the Appellate Court for the First District. The decree was reversed and the cause remanded by that court, and on February 15, 1895, was re-docketed in the said circuit court and the demurrer was thereafter overruled. On May 20, 1905, the cause came on for hearing upon the amended bill, the answers of a large number of defendants and the replications thereto, the report and supplemental report of the master made in accordance with orders of reference theretofore entered, and the exceptions filed thereto, and on that day a decree was entered by the court which finds, among other things, that during the latter part of the year 1891 Steele MacKaye, who was at that time a playwright and who was a man of small means, conceived the project of producing a spectacular show or panorama at Chicago during the World's Columbian Exposition, which panorama should exhibit on a life-like scale the discovery of America by Columbus; that said MacKaye planned that he would write a story of said panorama and construct an enormous building near the exposition grounds, in the said city, in which to give said exhibition, and he proposed to invent certain devices which would be improvements in the methods of scene shifting and in the production of realistic spectacular performances and to use said devices and improvements in said building; that for the purpose of carrying out said project said MacKaye joined with him, as promoters of the scheme, Benjamin Butterworth and Powel Crosley, and secured the services of defendant William L. B. Jenney, an architect of Chicago, who was to work out MacKaye's ideas and put them into practical form; that on January 13, 1892, the said three promoters obtained a charter from the Secretary of State of the State of Illinois for a corporation called "The Spectatoria Company;" with an authorized capital stock of $100,000, consisting of 1000 shares of the par value of $100 each; that said stock was subscribed for as follows, to-wit: Steele MacKaye 998 shares, Powel Crosley one share and Lewis H. Utz one share, and that said three subscribers formed the first board of directors of said corporation; that at the time of the incorporation of said company the said promoters planned that they would procure patents on MacKaye's proposed stage improvements, and when so procured they would turn over said patents to said Spectatoria Company as pretended payments for the capital stock of said corporation subscribed for by MacKaye and would then divide the said stock among themselves; that shortly thereafter the said promoters decided that they would organize a second corporation, with a capital stock of $2,000,000, and that MacKaye sliould subscribe for all of said stock with the exception of four shares, and should pretend to pay for the same by transferring to said corporation the right to use for a limited time in a limited territory all of said MacKaye's inventions and letters patent which might thereafter be issued on said inventions, subject, however, to a royalty of ten per cent on the gross receipts secured by said second corporation from the use of said inventions and
patents, which should be paid daily to MacKaye; that said promoters planned that said inventions, and the patents to be issued thereon, and the right to said royalty, should be transferred by said MacKaye to the aforesaid Spectatoria Company, subject to the right of the said second corporation to use said patents as hereinbefore mentioned; that said promoters planned to procure money to secure a site and construct a building thereon by having said second corporation issue and sell $800,000 of bonds secured by a first mortgage on the said site, building and patents; that in order to facilitate the sale of said bonds the said promoters proposed that MacKaye should turn back to said second corporation $800,000 of the capital stock of said corporation when received by him, which stock should be issued by said corporation as bonus for bonds to be sold; that in order to start and carry out said plan, Butterworth and MacKaye, in 1892, secured loans of several thousand dollars from defendants Edward B. Butler and Egbert W. Gillett, severally, and through them secured the co-operation of defendants J. Foster Rhodes, Henry E. Weaver, Bernard A. Eckhart and Edward L. Brewster in promoting said plan, and gave to the most of them stock in the Spectatoria Company and promised each of them stock in the new corporation in return for their assistance, and that with the money so raised a miniature model of the proposed stage and proposed panorama was constructed from the plans drawn by defendant Jenney and was exhibited in the early months of 1892 in a room secured by the promoters in the Auditorium Hotel, in Chicago; that a large proportion of the defendants visited the model show and listened to lectures by MacKaye, in which he explained the enterprise and the plan for financing the same.
The court further finds that in pursuance of said plan, on May 6, 1892, the Columbian Celebration Company was incorporated, with a capital stock of $2,000,000, divided into 20,000 shares of the par value of $100 each; that said MacKaye subscribed for 19,996 shares of said stock, and defendants Sidney C. White, Jr., Howard O. Edmonds, Powel Crosley and Benjamin Butterworth one share each, and that said five men constituted the first board of directors of said corporation; that thereafter, on May 16, 1892, at the first meeting of said directors a contract was entered into between MacKaye and the said corporation, by which MacKaye, in consideration of the payment to him of 19,996 shares of the capital stock of said company, full paid and non-assessable, and the payment to him of said royalty, as heretofore planned, assigned to said company the right to use his said inventions and the manuscript which he would prepare, for a term of fifteen years, in certain States; that thereafter, on May 21, 1892, said MacKaye assigned to said Spectatoria Company, in consideration of the 998 shares of said stock issued to him, his right to said ten per cent royalty and all rights in his patents and inventions heretofore mentioned, subject only to the use of the same by the Columbian Celebration Company, as hereinbefore mentioned; that on the same day the said Columbian Celebration Company issued its entire capital stock in five stock certificates, all marked “full paid and non-assessable,” as follows: Certificate No. I to Steele MacKaye for 19,996 shares, and certificates numbered 2, 3, 4 and 5, for one share each, to Butterworth, White, Jr., Edmonds and Crosley; that on the same day or the day following, MacKaye returned certificate No. I to said corporation, with his endorsement thereon, directing the transfer of 1574 shares of said stock, each, to Butterworth and Crosley and the re-issue to himself of 7349 shares of said stock, and at the same time MacKaye permitted his clerk to endorse on said certificate a direction to re-issue 9499 shares of said stock to be held by said company "for promotion;" that at the time of the issuance of such stock no applications had been made by said MacKaye for letters patent, and that the sole assets of the company consisted of claimed devices and inventions not yet devel